by Editor
by Atul Hatwal
Uncut can exclusively disclose explosive revelations in Alastair Darling’s upcoming memoir. The former chancellor lays bare the tensions at the top of government and the bank of England in the months leading up to and following the financial crash.
Darling details the total breakdown in trust between the prime minister and chancellor. He singles out Ed Balls and Shriti Vadhera as key Brown lieutenants running what amounted to a shadow treasury operation within government.
Brown’s demeanour was increasingly “brutal and volcanic”, mistrusting Darling to the extent that he repeatedly tried to place his own aides in the treasury ministerial team to report back on what the chancellor was doing.
Darling point-blank refused to have the newly-enobled Shriti Vadhera in his team, describing her as “only happy if there was blood on the floor – preferably that of her colleagues”.
He accepted Yvette Cooper as chief secretary to the treasury in January 2008, but was equally clear that the main reason Brown had placed her there was to “keep an eye” on him.
And, for the first time, Darling confirms his widely rumoured confrontation with the prime minister in 2009 when Brown tried to sack him as chancellor and offer him another role in cabinet.
Darling refused, making clear he would rather walk out of government than do any other job.
Gordon Brown’s capitulation in the face of this ultimatum was vindication for Darling, who had calculated that the prime minister was too weak to lose his chancellor.
But Darling doesn’t just reserve his fire for Gordon Brown.
He is similarly scathing about the governor of the bank of England, Mervyn King, who is lambasted as “amazingly stubborn and exasperating”.
The former chancellor confirms how close the government came to not renewing King for a second term in 2008 – the first time a governor would have been sacked after just one term in nearly fifty years – before they ultimately opted for renewal when they couldn’t find a suitable alternative.
And in a move that echoes Conservative criticisms of the regulatory structure put in place by Gordon Brown in 1997, Darling zeroes in on the “prickly and strained” relations between King and Adair Turner, chair of the financial services authority, as a reason that regulators failed to prevent the crash.
Although Darling is clear that no one could have predicted the scale of what happened, his account will be deeply uncomfortable reading for a former prime minister trying to rehabilitate himself politically and a governor of the bank of England attempting to claw back some credibility.
Atul Hatwal is associate editor of Labour Uncut.
by Editor
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by Atul Hatwal
As the coalition splits on banking reform, Uncut can exclusively reveal Alistair Darling’s merciless verdict on the bankers who caused the crash. In his forthcoming account of life at the treasury, Back from the brink: 1000 days at No 11, he says
“My worry was that they (the bankers) were so arrogant and stupid that they might bring us all down”.
Andy Hornby, former chief executive of HBOS, is accused by the former chancellor of “looking like he was about to explode” when confronted with the magnitude of what had happened on his watch.
Fred Goodwin, former chief executive of RBS, comes across as every inch his public stereotype. His nonchalant attitude to the catastrophe seemed to Darling more in keeping with someone “off to play a game of golf”.
The former chancellor goes so far as to say “Goodwin deserved to be a pariah” when he later refused to slash his pension after being fired by the RBS board.
Darling says that the bankers uniformly displayed an arrogance and a lack of gratitude for the massive, multi-billion pound taxpayer bailout that was as shocking as it was stupid.
In identifying those culpable for the banking crisis, Alistair Darling runs through a comprehensive list of guilty parties.
The obstinate governor of the Bank of England, the dysfunctional FSA, the venal bankers and the vipers nest in number ten are all excoriated.
But in this thorough appraisal one name seems to be missing: his own.
While Darling’s insights are undeniable, and it’s a very rare memoir that doesn’t have a strong theme of, “needless to say, I was right all along”, running through it, he was still the chancellor who presided over the biggest banking crash in nearly a century.
And as such, Alistair Darling escapes very lightly from any blame.
Whether this verdict will be echoed by his contemporaries in the furnace of those days and nights around the crash is another matter.
Coincidentally, Mervyn King’s final term as governor of the bank of England finishes in eighteen months.
Atul Hatwal is associate editor of Labour Uncut.