Alistair Darling spoke recently at the Linlithgow Book Festival about ‘Back from the Brink’ (Atlantic Books, £19.99), his account of the banking crisis and its consequences.
He is an intelligent, thoughtful politician. He thinks before he speaks. He avoids name-calling games. He acknowledges the strengths of those with whom he disagrees. I have known him for over 35 years. In the 1970s we were both members of North Edinburgh Constituency Labour which was perceived as firmly on the left and was also (I think we’d both regret it today) the only Scottish CLP to campaign for a ‘No’ vote in the 1979 devolution referendum.
We were both Labour local councillors: Alistair from 1982 to 1987 on Lothian Regional where he was a leading member of the administration in its defiance of the Thatcher government; I from 1980 to 1987 on Edinburgh District Council. We were both Labour parliamentary candidates: Alistair, successfully, in 1987 in Central Edinburgh; I, unsuccessfully, in 1979 in Dumfriesshire and in 1984 in West Edinburgh. As the years passed, our paths diverged.
He became an MP, a cabinet minister, holder of one of the great British offices of state and now leads the pro-union referendum campaign. As chancellor of the exchequer from 2007 to 2010, he was at the epicentre of events which shook the most powerful institutions in British society and were part of a world-wide financial crisis.
I left the Labour Party, became a convert to independence but remained somewhere on the political left, I hope less dogmatically than in my younger days. Although I remained politically committed, I immersed myself in my professional career. Active politics took a back seat to the more practical contributions I hope I made to the cause of social justice through my work in education. Alistair and I remained on warm terms. I was headteacher of a school in his constituency which he supported enthusiastically.
His book presents an accessible picture of the banking crisis. Its traditional narrative voice helps order the chronology and clarifies issues and personalities. It leaves several profound impressions. (Whether these were the intended messages is another matter.)
Gordon Brown’s government appears a directionless combination of warring cabals, beset by personal jealousies and without any consensus on the moral purpose of a Labour administration.
The banking crisis, perhaps surprisingly, certainly its earlier manifestations, seemed to shock so many. In a government teeming with intellect, in a Treasury famed for the cerebral calibre of its leading officials, it beggars belief that no-one foresaw the crisis inherent in massive property speculation by the world’s greatest banks.
Indeed there had been warning voices. Jeff Kronthal, who argued against heavy sub-prime investment at Merril Lynch, was fired as a reward for his perspicacity. A New York financial consultant, Nouriel Roubini, defined the crisis a year before it occurred. Sir Andrew Large, deputy governor of the Bank of England, warned of the unsustainability of the investment process in 2004, continued to warn of impending disaster until 2006, and then retired. Journalist Fred Harrison had also been warning of the effects of land and property prices since the 1990s. These warnings did not permeate a closed system, in banking itself, government and academia and are unmentioned in the book. One wonders why.
The book presents bank crises as always possible and banks as inevitably fallible and with only a limited capacity to foresee disasters. The job of politicians is simply to manage the system as calmly and rationally as possible. The bankers appear, with a few, individual honourable exceptions, as short-sighted, self-centred and self-serving. Their expectation of government was a one-way deal. ‘When times are good, get off our backs; when they are bad, you have to help us.’ Labour duly did as the bankers expected.
Few today would advocate state ownership as an ideological imperative. Yet surely, given the systemic failure of the privately-owned banking system, a Labour government might have seen maintaining a significant stake in such banks as a mechanism to avoid the much wider economic catastrophe which a banking crash would have brought and which remains possible. Nationalisation, not to create a socialist utopia but to ensure that a key part of the economic system kept running, would have made practical sense. (The North Edinburgh Alistair would have expected no less.)
As I read ‘Back from the Brink’ and as I listened at the book festival to my old friend’s calm and urbane explanation of Labour’s position, his assertion that Labour manages the system better than the Tories and that Alistair Darling’s approach to managing the crisis was better than Gordon Brown’s, what remained was a sense of loss.
Many, myself included, have moved far from the certainties of the politics of the 1970s and 80s but still seek to discern some moral purpose in the political arena. It appears sadly obvious that if all politicians occupy the middle ground, and his book lauds that tactical priority, it will become an over-crowded place occupied by essentially indistinguishable politicians and electoral cynicism will grow even further.
If the political system is never open to fundamental challenge, if ideology disappears, then politics devolves, as ‘Back from the Brink’ implies, to a mere competition in managerial competence. These are essentially conservative politics, offering, at best, a more effective maintenance of the financial and economic status quo than the brash and divisive conservatism of David Cameron.
Alistair Darling now leads the Better Together coalition of centre-ground politicians. He might ponder that perhaps one of the reasons for the SNP’s present dominance in Scotland is that it is perceived as occupying the very political ground now vacated by Labour.
More profoundly, he might consider that whatever level of support for independence may materialise, that option is perceived as at least distinct and different from the status quo and offering some possibility of change. That desire for radical change as means of achieving a more just and equal society is, I think, where he and I both started our political lives.

The above article was first published in Scottish Review on 15 November 2012: http://www.scottishreview.net/AlexWood34.shtml

2 Comments

  • EllaS says:

    I think you’ll find in this interview between Gordon Brown and Paxman that frm late nineties Gordon, my MP did in fact try and warn the countries like US about what could happen if there wasn’t a central monitoring system put in place to monitor all banks. Its around 3.40 onwards where he speaks about it
    http://www.youtube.com/watch?v=6vSrMxYCxhI

    • alex says:

      No he doesn’t. He states simply that he argued fopr a global system of regulation and he claims that had that been in existence governments and others would have been better forewarned. That is entirely different from saying that he foresaw what was about to happen.
      There is an even more interesting little faux pas however at the very beginning of the interview. Brown says, “Jeremy, when I came into power in 1997….”
      Now like it or not (and I don’t) it was Blair who came into power in 1997! The hubris of the man!

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