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25 March 2010

Will Darling budge in May?

The Labour Chancellor fought off opponents in the party and earned a reputation during the financial

By James Macintyre

When Alistair Darling sat down to pats on the back from his cabinet colleagues on 24 March, this modest Chancellor could have been forgiven for feeling a sense of what Americans call “closure”. Darling, New Labour’s improbable survivor, had just delivered the party’s last Budget ahead of its hardest electoral fight since the 1990s. Moreover, he may well have completed the last Budget, and perhaps even the last major act, of his political career.

For two years Darling has been defying political gravity, grappling with the toughest econo­mic conditions since 1945 and simultaneously dealing with opponents inside the party.

It was in the summer of 2008 that Darling found himself briefed against by Gordon Brown’s henchmen Damian McBride and Charlie Whelan, after he suggested that economic conditions were “arguably the worst they have been in 60 years”. At the time Brown was insisting that the recession could be turned around “in six months”. Brown was proved wrong and Darling right. Treasury sources whisper that it was the Chancellor, not the Prime Minister, who first thought of the bank bailout plan that was implemented to international acclaim by Brown, who admitted later that he failed to envisage “the possibility of complete market failure”. Asked last year if it was true that much of the state intervention had been his idea, Darling merely smiled and told me: “It was a collective effort.” Nonetheless, his approach has been vindicated.

Despite this, the Prime Minister openly sought to remove Darling from his job last year in order to instal Ed Balls as chancellor. When James Purnell resigned as work and pensions secretary in June 2009, the subsequent reshuffle appeared to give Brown the perfect opportunity to promote Balls. In the event, it nearly brought Brown down. According to one version of events, Purnell’s departure was triggered when he heard whispers that he might be moved to the Department for Schools, Balls’s department. Purnell didn’t need anyone to explain the probable chain of events.
Brown’s plan was scuppered, the New Statesman understands, after a series of urgent messages in praise of Darling was relayed to No 10.

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Missives came from fellow cabinet ministers including Tessa Jowell, but also from Christine Lagarde, the French finance minister. Darling was determined to stay, but it was only after Brown realised that his own premiership was under threat from a cabinet revolt that he backed off.
Some who know Darling best suggest that, with his immediate survival assured and autonomy restored, he may now be preparing to leave front-line politics with his head held high. Naturally, Treasury officials insist that he expects to remain as Chancellor after the general election if Labour retains office. They dismiss recent reports that Vince Cable may take the job as part of a coalition as “wild speculation”. And they point out, as they have done before, that it would be absurd to sack the man who is carefully steering the country out of recession. Indeed, some Brown allies say that the PM may seek to keep Darling on as chancellor in the event of Labour surviving through a hung parliament. It would, they argue, calm market jitters during a volatile period.

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However, others close to Brown say that were Labour to win the election, he would feel sufficiently emboldened to make Balls chancellor. Balls is still pressing Brown for this, and some say more urgently than ever because the Schools Secretary, not the most popular minister in the cabinet, knows his ascent is probably dependent on Brown’s survival or his own victory in a subsequent leadership election.

There is evidence to suggest that, if Balls became chancellor, Darling would not seek another job in cabinet. The New Statesman can reveal that during last year’s attempted re­shuffle, Brown dangled three posts in front of Darling: foreign secretary, home secretary and leader of the House of Commons. Darling rejected them all. This gives a clue to his private thoughts and where he may be heading after the general election.

No huff, no sulk

Darling is a family man who enjoys nothing more than spending time on his croft on Lewis in the Outer Hebrides. A further clue to his mindset comes from the New Statesman archives. In 2000, he told this magazine: “I’m not interested in being here for the sake of it. You can justify it only if you’re doing something worthwhile.” Asked on the BBC on 21 March if he expected to stay on as chancellor after the election, Darling would only say: “Let’s first win the election. I’m focusing on the Budget and winning the election.”

So what would Darling do in opposition should Labour lose? Some friends have urged him to stand in a likely leadership contest. But he is dismissive of this in private and, despite the fierce respect that the majority of Labour MPs have for Darling, it is hard to identify a solid constituency of “Darlingites” that compares with support for, say, the Miliband brothers and, to a lesser extent, Balls. Instead, one friend says that were he to be moved from the job he loves, or were Labour to enter opposition, Darling may surprise us all and just “walk away”. The source adds: “This would not be done in a huff or a sulk, but with dignity.”

The minister once dismissed as a “boring” technocrat better suited to his old job under Tony Blair, at Transport, has earned a reputation inside and outside Westminster as one of the government’s wisest heads and a “safe pair of hands”. As Alastair Campbell, Blair’s former press officer, tells me: “Alistair has built up a lot of respect in the party and I believe with the public . . . It cannot have been easy being Chancellor at the time of the economic crisis, but people do understand the scale of the decisions being taken and, I think, appreciate the calm authority he displayed.”

His party critics – mainly outriders to Balls and Brown – claim that far from being quicker than the Prime Minister to identify the looming economic crises, Darling made mistakes. He should not have emulated the Tories’ inheritance-tax cut announcement in 2007, they say, only to reverse it two years later. They claim he has been too “cautious”, talking up the need for spending cuts and making the bonus tax a one-off measure, “muddying” Labour’s dividing lines against the Tories. And they raise eyebrows at the timing of Darling’s recent admission that No 10 unleashed the “forces of hell” against him after his comments in 2008 – an admission that came at the height of recent allegations about Brown’s “bullying”.

But Darling can look back at a successful career. A former Trotskyist-turned-pragmatist, Darling has become one of New Labour’s most reliable assets, and one whose forthcoming performance in a televised debate against George Osborne is being relished by Labour strategists. Having entered parliament in 1987, with Margaret Thatcher’s third election victory, Darling helped Labour in its long march back to electability. As shadow chief secretary to the Treasury when Labour was coming to power, Darling helped Brown secure the public’s trust on the central area of the economy. He stayed on as chief secretary until 1998, before switching to pensions and social security, and it was in 2002 that he became transport secretary with a £13bn budget.

“Politics isn’t a career”

It is as Chancellor that he has “come into his own”, according to one ally. “As everyone else was flapping around him – including next door [in No 10] – Alistair did not flinch once. It is fair to say we would not have got through this recession in the way that we have if it were not for Alistair’s unending reserves of calm.”

But as Darling told this magazine a decade ago, “Politics isn’t a career, and I don’t see it as a career . . . There are other things you can go and do.” Doubtless, there are many things that Darling could go and do. His many supporters in Labour hope he will stay in politics. If he does not, he can take credit not just for helping save the economy, but also – by achieving continuity at the Treasury during the recession – for helping save Gordon Brown’s premiership from itself.

The last word goes to the Daily Telegraph‘s Benedict Brogan, not an obvious supporter of a Labour chancellor. “What stayed with me,” wrote Brogan on 23 March, “was the calmness, the Zen-like peace of his performance, and his confidence . . . Here’s a minister who has served in a series of difficult portfolios, who has navigated the Treasury through a global crisis, and who has established himself as an effective corner of integrity in a government of mountebanks. That Gordon Brown plans to sack him if he gets back in speaks volumes.”