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Alistair Darling was the chancellor who dared to talk honestly about the financial crisis. It’s five years on from the bank bailout, but the veteran Labour politician is still keen to point out painful economic truths. Mike Thatcher reports
Back in August 2008, Alistair Darling caused a stir when he told the Guardian that Britain was facing “arguably the worst” economic downturn in 60 years. It turned out to be true, but the then chancellor of the exchequer still found the “forces of hell” unleashed on him – and much of the opprobrium came from his own side. Gordon Brown, already under huge strain as prime minister, was not keen on his next-door neighbour going off-message. The result was a weekend of fraught conversations between Numbers 10 and 11, and allegations of anti-Darling press briefings – apparently orchestrated by Brown’s spinner-in-chief Damian McBride. Five years on and Darling insists there are no regrets. Speaking to The Actuary in his remarkably uncluttered Westminster office, the veteran Labour politician says he had a responsibility to warn the public of what was coming. “If you are the chancellor, you have a difficult task because with everything you say you are very conscious that you can have a profound effect in terms of spooking the markets. But I was looking at the numbers every day and the situation was getting worse.” Darling says he was just stating the “blindingly obvious”, and was surprised at the reaction. But, in many respects, the fallout from the interview was the start of a tumultuous
period in UK and global economic history. Having already been forced to nationalise Northern Rock (in February 2008) he then faced a series of unprecedented events. On 15 September 2008, Lehman Brothers filed for bankruptcy. The following month, the US Congress approved a $700bn bank bailout, three Icelandic banks collapsed and the UK government was forced to rescue the Royal Bank of Scotland, Lloyds TSB and HBOS. Darling is generally considered to have had a good ‘war’. Despite the financial turmoil, he remained a calm and reassuring presence. Previously mocked for being “dull and grey” in cabinet posts ranging from Work & Pensions to Transport, Scotland and Trade & Industry, he won plaudits at the Treasury for his ability to steer a steady course as global economic winds battered the UK. He was resolute when he needed to be, famously refusing US Treasury Secretary Hank Paulson’s proposal that Barclays should buy Lehman Brothers. And, despite McBride’s best efforts, he managed to fend off Brown’s attempts to oust him as chancellor and install Ed Balls. Subsequently, of course, Labour itself has been ousted from government and Darling has stood down from the shadow cabinet. He spends much of his time now opposing Scottish independence as chairman of the ‘Better Together’ campaign. But he still takes a strong interest in economic matters – at home and abroad – and will be outlining his analysis at the Institute and Faculty of Actuaries’ Life conference in Edinburgh on 10-12 November. So, does the ex-chancellor think that, with the UK economy recovering, Europe retreating to the inside pages
IF TRUTH
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THE ACTUARY • November 2013 www.theactuary.com
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SAM KESTEVEN
25/10/2013 14:00
