Back from the Brink

by Alistair Darling

  This was hardly the ideal background to the upcoming European election campaign. The public now had good reason to hold politicians in contempt. This added to the general uncertainty, and any lack of sure-footedness on our part in dealing with either the expenses problem or the other big issues of the day would spell disaster at the polls.

  I spent the spring recess in Edinburgh, doing the odd bit of campaigning for the European elections. Every day now was dominated by fresh disclosures about expenses claimed by MPs. The Telegraph had moved on to a more forensic examination of claims, including mine. The paper questioned my reclaiming the cost of accountancy fees for preparing my tax returns in respect of my office costs. Secondly, they correctly spotted a mistake I had made when we moved from our flat in Kennington into Downing Street. I should have seen that some payments made for the flat went beyond the time when we moved out. As Chancellor, I could not afford damaging allegations of impropriety. I decided to do an interview with all the major news channels and deal with anything they wanted to put to me. It was unpleasant but necessary. As I did so, I knew it would add fuel to the fires being lit beneath me for other reasons.

  Gordon, correctly expecting terrible election results, had decided to reshuffle his Cabinet, probably the day after the results were announced, on Sunday, 7 June. By now our relationship had broken down. Gordon wanted Ed Balls as Chancellor, and I had to be moved.

  To understand what happened in the five days before the Cabinet reshuffle, which Gordon had to bring forward as events moved out of his control, it is necessary to look back at our relationship over the previous twenty years. Although we both come from Scotland, we were never close in the early days. Our political outlook is very similar, but Gordon is a bit older than I am, and certainly of a different generation in the Labour Party. He was already engaged on the national scene long before I even thought of becoming an MP. But he, like Tony Blair, took a keen interest in what I and other newly elected MPs were doing when we came into the Commons in 1987. Gordon was always destined for a career in politics. I wasn’t. I was elected almost by accident. Robin Cook had been the MP for the Edinburgh Central seat from 1974 until a slight boundary change handed it to the Tories in 1983. Robin decamped to nearby Livingston New Town, where he remained as MP until his tragically early death in 2005.

  I had been elected to what was then Lothian Regional Council, which covered Edinburgh and the Lothians, in 1982. I was beginning to make a name, principally because of my campaign against a plan to extend an urban motorway from the outskirts of the city right into its historic heart. This ridiculous plan, proposed ironically by Edinburgh’s first and last Conservative–Liberal Democrat coalition, ran into huge local opposition. We eventually tore up the contract to build it when we won back control of the council in 1986.

  With the next general election on the horizon, I was asked by my friends and colleagues if I would stand in the Edinburgh Central seat, which, although Tory, looked increasingly winnable. The tide of change was sweeping through Scotland ten years before it would do so in England. My father, Sandy Darling, was an elder in the Church of Scotland, and he and my mother, Anna, voted Conservative. When Margaret Thatcher gave what came notoriously to be called her ‘Sermon on the Mound’, at the Kirk’s annual general assembly in Edinburgh, my father came home horrified. She didn’t quite say ‘there is no such thing as society’, but that’s what is remembered. They never voted Tory again.

  I was genuinely in two minds about whether to stand. The Sunday newspaper Margaret was working for had folded in 1982. We invested her redundancy money in the cost of my training as an Advocate – a Scottish barrister – and I was called to the Scottish bar in 1984, having started life as an Edinburgh solicitor in the late 1970s. My career was in its infancy, but I was beginning to enjoy it.

  In the late summer of 1985, Margaret, who was now working for the Glasgow Herald, and I flew to Liguria in northern Italy for a holiday. There we made two momentous decisions. The first was that I would stand for Parliament. The second, made the day after, was that we would get married. These decisions were almost certainly made the wrong way round. Sitting on the balcony of an apartment in Tellaro, fighting off the mosquitoes and listening to the nightly call of the neighbour summoning her cat, we talked about the approaches that had been made to me to stand for Westminster. The prospects, although better than they were in 1983, were not ideal. Mrs Thatcher still held sway and Edinburgh was a very conservative city. I had joined the Labour Party in 1977. It held values that I shared: a belief in social justice, that life chances should not be stunted by accident of birth, that opportunity should be available to all, and that fairness meant just reward for hard work. We talked on in the dusk, weighing up the arguments. A mosquito was attacking my ear. It was time to go out to eat. Margaret said: ‘If you don’t stand, you will probably regret it for the rest of your life.’ So the decision was made. We went down to the restaurant in the town square, along a route called Via Gramsci.

  The decision to get married was altogether easier. Visiting the Cinque Terre, five villages hewn from a hillside, we shared a bottle of wine in the sunshine and thought we would formalize our life together.

  When the general election campaign was called, my clerk had booked me into a six-week trial starting in Inverness on the Monday after the election, such was my confidence of winning the seat. In fact, the Tories were on a slope that would eventually lead to a wipe-out of their representation in Scotland in 1997, something they have never recovered from – unless you count one MP as a recovery.

  I was elected in 1987, along with a number of my contemporaries, like Brian Wilson, a radical journalist, and Sam Galbraith, a renowned neurosurgeon, winning what would be called ‘middle Scotland’ seats. We proved that we could win seats that were hitherto seen as Tory if we based our appeal on the centre ground and the common sense of the electorate. The Conservatives, who had effectively run Edinburgh for nearly eight hundred years, saw their representation drop to one seat. Even Edinburgh South, until then a very safe Tory seat, which had been held by my great-uncle in the Tory cause in the 1945 election, was won by Labour.

  The grim reality to which we woke up the morning after the campaign celebration was that, while we had won in Scotland, we had done badly in England. I vividly remember entering the chamber of the House of Commons for the first time. Very few people who have done so can have failed to feel the awe, the sense of occasion, on first taking a seat on the green benches. My maiden speech, written on the plane down to London, was no more than adequate. As was customary, I spoke about my constituency and the dreadful effects that unemployment was still having four years after the last recession ended. I was surprised and naturally delighted to receive letters of congratulation next morning from three people who were not in the chamber at the time but who claimed to have read Hansard, the official report of parliamentary proceedings, the following morning. One was the Speaker, the late Bernard Weatherill, who was always kind and solicitous; the other two were Tony Blair and Gordon Brown.

  A year after I was elected, Roy Hattersley, then Labour’s deputy leader, whom I didn’t know at all, asked me to join his shadow home affairs team. Thus began my twenty-two years on the front bench. I remember saying to Roy how grateful I was for his appointing me. He replied: ‘You’d better remember that in politics there is no such thing as gratitude.’ It was a good lesson to learn.

  I enjoyed working with Roy. He is good company, convivial and thoughtful. He allowed me to cover areas I had no expertise in, including immigration, but also broadcasting, sitting on the committee that recast the ITV network in 1990. I was also able to do some work on the constitution, particularly House of Lords reform. We proposed replacing it with a senate representing the regions and nations of the UK. For what seemed like an eternity, I sat on a Labour Party commission, chaired by Lord Raymond Plant, a distinguished academic, that was to advise on whether to support electoral reform. I spent so much time looking at it that I reso
lved never to touch the subject again. Constitutional reform was, understandably, thought to be of secondary importance to the electors, who were more interested in whether we had a sensible economic policy. Unfortunately they concluded that we did not.

  It was good experience, although I doubt if my contribution made any impact on the body politic. After the general election of 1992, John Smith became leader. When John died in 1994, the sense of shock was extraordinary. It was as though MPs had lost a family member. I’d seen him speak at a fund-raising dinner the night before and had been struck by how tired he looked and how falteringly he spoke. When I left at 10 p.m., he was settling down, glass in hand. In the morning, I heard that he’d had a heart attack. He was a good man but he lived hard.

  I was lucky enough to be offered three jobs following the Shadow Cabinet elections under John’s brief tenure as leader. First, Tony asked me to join him in the home affairs team. I said I would love to help him but I had worked on home affairs for four years and, with broadcasting now under a different department, a lot of what he was going to do was peculiarly English, since most of the Home Office writ does not run north of the border. He sounded disappointed and two years later, when he became leader, I wondered if I had made a mistake in turning him down.

  Next was John Smith himself, who asked me if I would shadow universities. Worthy though this was, I couldn’t see it going anywhere. In politics you are judged by how you perform in the chamber and in the media, and there’s not much chance to make a splash in the Commons on a subject that, at that time, did not feature on the floor of the House. Finally, Gordon offered me the job I really wanted, to look at City affairs in the Treasury team. I told John that was the job I wanted and, as he could see that it had been agreed by Gordon, who was his new Shadow Chancellor, that was it.

  For the next five years I worked closely with Gordon. He allowed me a great deal of latitude and in particular let me develop our plans to end the system whereby financial institutions in Britain were largely self-regulated. This had led to scandals like the mis-selling of insurance schemes, with which we were able to attack the Conservatives very effectively.

  It was also a logical development for me as an MP representing much of Edinburgh’s financial centre, which remains the fourth largest in Europe. I was genuinely interested in the subject. Most of my constituents who work in the private sector depend on the financial services industry in one way or another. Throughout my five years on the City job, I must have met with most of the big financial institutions. It was difficult because in the early years they did not want to know us. They did not believe they would ever have to deal with us as a government.

  In the year before the general election of 1997, I became Shadow Chief Secretary to the Treasury. The call came as Margaret and I and the children were setting off for a fortnight’s holiday in France. We were driving and had stayed overnight with our friends, Catherine MacLeod and George Mackie, on their farm in Essex. I took the call from Tony and suddenly didn’t much want to go to France any more. I was now in the Shadow Cabinet, an exciting prospect. Margaret pretended not to notice my sudden wish to stay and we set off from the farm the next morning. It was to the farm we were to return the night we left Downing Street for the last time, at the sad end of the Labour government. It was a pleasing, if unintentional, piece of political symmetry.

  I hugely enjoyed my spell as Chief Secretary, both in opposition and for the first year in government. Because so much of government involves spending, I got to know everything about every policy. In the run-up to what was to be a momentous general election, it was a fantastic job, and Gordon, back then, trusted my judgement completely. I was delighted to accept his invitation to join him in the Treasury when we got into government. It was also a measure of his generosity. Following John Smith’s death, he might well have assumed that I would support him for the leadership. It never came to a contest, because Gordon did not stand. But although he never asked me outright, he knew from our discussions that I thought Tony was the right man for the job at the time.

  Like many of my generation, and certainly given my background, both personal and political, I very much supported the New Labour approach: broad-based, firmly anchored in the centre ground of politics, recognizing that government can make a real difference to people’s life chances and opportunities. This is where I felt we should be. Tony Blair’s style and manner had got through to the British public. They felt at ease with him. His ability to communicate is formidable. He could appear on people’s television sets and appeal to them. We would have won in 1997 but nothing like as well as we did had Tony not been leader. As Tony said in his memoir, for ‘most normal people’, politics is ‘a distant, occasionally irritating fog’. As a result, in the absence of strong and readily understood policies, personality is the thing that will cut through the fog. He caught the mood of the time. Equally, however, New Labour could not have been brought into being without Gordon’s drive and intellect, which is something Tony acknowledges. It was Gordon who changed our policies on tax and spend, and welfare to work. Those changes were made in the face of internal Labour Party opposition, but they chimed with the electorate, a necessary requirement for winning a general election.

  It is true that Gordon found yielding to Tony after John Smith’s death difficult. And that was something that never went away. He recognized that a fight to the death would have ruined the project that both he and Tony had spent the previous two years building. He also knew that he did not have enough support to win the leadership contest, certainly among MPs. Unfortunately, the conflict was to fester for years, until by 2005 it had come to dominate much of the day-to-day life of government. It was debilitating and the deep animus drove divisions right across the party. The deteriorating relationship and the stridency of their disagreements destabilized our government and did our reputation great harm. It also created a career path for the disaffected. An act of overt hostility to the ‘other side’ was seen as a badge of loyalty.

  After I left the Treasury to take over as Secretary of State at social security, a job that Gordon was keen I should take (as was Tony), I continued to work closely with him. Both of us wanted to integrate the tax and benefit system, of which the tax credit system is part. We were both keen to introduce the 10p tax rate, as it helped so many people living on low incomes. We did not see so much of each other when I was Transport Secretary. Transport was not Gordon’s thing; nor was it Tony’s. I took over the department at a time of political crisis, following the resignation of Stephen Byers. The night before Byers went, I was asked to visit No. 10, via the back rather than the front entrance. This was puzzling – it is usually the path of the condemned man. I wondered whether this was the end, but Tony explained that Byers was going to resign and asked whether I’d take over at Transport. I responded enthusiastically and said yes, certainly. He looked startled. ‘Really? Why on earth do you want to do it?’

  Again, my good relations with Gordon helped in the job. The Treasury’s instinct is to oppose any large transport project, as one senior official explained to me at his retirement party. With Gordon’s help, however, I was able to get £8 billion out of the Treasury to do up the west coast mainline between London and Glasgow. The Treasury wanted to pull down the spectacular St Pancras Station, now the Eurostar terminal; I thought it important to preserve some of our railway heritage. And the Treasury would almost certainly have blocked the high-speed rail link to the Channel Tunnel when it ran out of money in 1998, had it not been for the persistence of John Prescott and Gordon’s and my influence at the Treasury.

  When people asked me subsequently why I never joined in the plots to remove Gordon when he was prime minister, the answer I gave is that I had, and still have, a residual loyalty to him which I found impossible to overcome. At a personal level, we saw a lot of each other over the years, as did our families. We live a few miles apart, separated by the Forth Bridges. We were good colleagues. Our political outlook was similar, but I am not
tribal and did not subscribe to the grievance and grudge view of Tony held by Gordon’s political intimates. I sensed sometimes that socializing with me was, for Gordon, a bit effortful.

  Ironically, if it had not been for the banking crisis and the dramatic downturn in the economy, I might have gone much earlier. Although my becoming Chancellor when Gordon became Prime Minister had been widely trailed in the media, almost throughout our term of government from 1997 Gordon, rightly, had never promised me anything. Nor would I have expected him to. Who knew what might happen during those years?

  We first discussed what I might do under his premiership in April 2007. I was out campaigning in the elections for the Scottish Parliament in central Scotland. It had been raining and was about to start raining again, and the prospect of spending the afternoon dripping on doorsteps was not attractive. Gordon phoned me and asked me to come over to his home in North Queensferry to help him write a speech setting out the reasons behind our reform to pensions in the late 1990s. After we had done about four hours of work, I was slightly surprised when he raised the subject. He asked me what job I would like, making it clear he meant one of the top jobs: the Treasury, the Home Office or the Foreign Office. I said that the Home Office was largely English and I thought that would be a problem. I did not have much of a track record on foreign affairs; in fact, I didn’t think I had once been to a Foreign Office question time. As he knew, I would like the Treasury, but only, I said, if I had his confidence. I asked the obvious question: why not Ed Balls, who had worked with him so closely for so many years as a special adviser? He had obviously pondered that himself, but he thought that it would be better for Ed to do something else first, as he was still a relatively new MP, elected in 2005.