WHEN all politicians around him are losing their heads, Alistair Darling is intent on keeping his. Having seen off an attempt to replace him with Gordon Brown’s favourite apparatchik Ed Balls – who wanted to use Labour’s final Budget to make vote-winning spending promises – the famously low-key chancellor says the new enemies of prudence are the Tories.
Referring to Conservative plans to scrap a planned rise in National Insurance and to give married couples a tax break, he says: “You have to be careful that you don’t start making promises you can’t deliver, because that leads to instability.” It’s a line that sounds well-rehearsed, which isn’t surprising – he’s probably said the same thing to the Prime Minister several times before.
Darling speaks to City A.M. as we hurtle towards a campaign stop in Milton Keynes in a crowded, standard-class rail carriage – proof Labour really is slumming it in this election campaign. As the transport secretary responsible for upgrading the West Coast Main Line, he is keen to take credit for the speed of the relatively short 30-minute trip. It is, he says, proof that the market can’t do it all. “Who was it that spent £7bn doing up this line – it was the public sector.”
Although he dismisses the long line of business leaders queuing up to back Tory policies – “I can live with it” – he is adamant that he is still on the side of private enterprise. Having already introduced a 50p rate of income tax on the highest-earners, Labour is fighting this election with a programme that pledges to hike National Insurance and make it harder for foreign companies to take over British ones.
Isn’t this the party’s most socialist manifesto since Neil Kinnock was defeated in 1992? “Not a bit of it,” he growls, abandoning his trade-mark monotone for the first and only time in the interview. “This is as New Labour as it’s ever been.”
Defending plans to overhaul the takeover code so that foreign bids require the support of two thirds of shareholders, he insists he has nothing against overseas cash. “Look at our energy companies, most of them are non-UK. Look at our airports, many of which are owned by a Spanish company. Point me to another country in the world that has quite such an open economy.
“But there was a lot of concern over the Kraft takeover of Cadbury. A lot of people acquired shares after that process was announced, and you had to ask what their long term commitment to Cadbury was.”
He also defends the government’s growing penchant for interventionism, its confidence in picking winners and losers and giving them state cash or tax breaks. “We’re not talking about going back to 1970s-style state intervention,” he insists. “But Nissan came to the North East to build an electric car on the back of a small but significant amount of public investment. So I think government does have a role, but it’s not about turning the clock back and saying Whitehall knows best – it doesn’t.”
Darling says he rediscovered his faith in the state during the banking crisis, when he “had to step in to stop the acute failure” of four British banks. “The scale of the crisis was unprecedented in modern times,” he says. “It demonstrated that government can and should make a difference.”
The real danger facing business is the profligacy of the Tories, Darling says, whose manifesto “is very long on vague promises, but very short on how they’ll pay for them”. He is particularly scathing of the Conservative’s tax break for married couples, which “discriminates against children whose parents have split up or died”.
He also thinks the method of funding the policy – a £1bn levy on banks – could damage the City, because the Tories are willing to go it alone if other countries fail to agree on a global banking tax. “London is the world’s major financial centre, and I don’t want to do anything that would make people think about going somewhere else. There is a substantial risk that if you do something unilaterally, they have that option. You have to always be careful about doing something that makes someone pause and think, ‘hold on, do I want to be here?’”.
A Labour victory is looking increasingly unlikely, and Darling admits voters are asking “more searching questions” than they did in the 2005 election. He says Labour is approaching polling day as the “underdog”, although he hopes the electorate will eventually wake up and smell the “whiff of wild optimism” he says characterises Tory plans.
You get the impression the chancellor thinks history will judge him kindly, even if Labour doesn’t win an historic fourth term. “I think that the evidence is that what we’ve done in stimulating the economy and rescuing the banks has had an effect. Who’d have thought last week the OECD was saying that, although modest, our growth would be stronger than most other developed countries.”
He is also proud of being the first member of the government to admit the world was heading for its worst downturn for 60 years, a fact that “was obvious to me” but earned him months of poisonous briefings at the hands of Brown’s former special adviser Damian McBride.
Does he admit that members of his own party tried to discredit him at the time? “There were one or two,” he says. [1. Gordon Brown, 2. Ed Balls, although of course he doesn’t say so himself] “But that doesn’t worry me. It doesn’t keep me awake.”
For now, it seems as though the Prime Minister and the chancellor have buried the hatchet, and Darling saves his ire for the Tories: “George Osborne might want to go and re-examine everything he’s said [since the banking crisis] and think long and hard about whether or not he didn’t get quite a lot wrong.”
While Osborne is soul-searching, Darling is working hard to secure re-election, with stops in Harlow and the West Country later in the day, hopeful that people will take a “long hard look at the Tories and say, ‘I’m not sure. I’ve got my doubts’”.
If Labour does end up back in government, does Darling think he’ll end up back in Number 11. “That’s what Gordon says,” he offers. Does he believe him? “Yes.” At least someone does.
CV | ALISTAIR DARLING
Marital Status: Married to Margaret Vaughan, a former journalist, and has two children.
Education: Studied law at Aberdeen University. Called to the Scottish Bar and admitted to the Faculty of Advocates in 1984.
July 1996, shadow chief secretary to the Treasury; May 1997, chief secretary to the Treasury; July 1998, secretary of state for social security; June 2001, secretary of state for the Department of Work and Pensions; May 2002, secretary of state for Transport and secretary of state for Scotland; May 2006, secretary of state for the Department of Trade and Industry; appointed as Chancellor of the Exchequer on 28 June 2007.