The always self-depracating Alistair Darling* remembers today how he arrived in the Treasury without any inkling of the global crisis about to hit financial markets. I like the quote, not only because he is kind about the FT but also because it’s an insight into just how much of a shock the credit crunch was to many policy-makers.
When I was appointed Chancellor in the summer of 2007, I gave my first interview to the Financial Times – a paper for which I have the highest respect.
The very first point put to me was what a relief it must be, having worked at various crisis hit government departments in the past “to arrive somewhere that’s actually not a mess.”
Just to make clear that I was not then the Mystic Meg I was about to become, I replied: “It’s in good nick. Both the department and the economy.” Famous first words!
I didn’t have to wait long to find out that I couldn’t have been more wrong. The first signs of the crisis started to emerge a few weeks later. We were on holiday in Majorca. I went to get the morning rolls and as you do when you are Chancellor, a copy of the FT.
There was a report that the European Central Bank had injected nearly £100bn into the money markets. Not good for your appetite or a relaxing holiday.
The former chancellor meanwhile has a stark warning for his own party, saying that Labour lost economic credibility by refusing to “talk openly about the deficit“.
* Darling was always seen as New Labour’s “fire blanket”, who could be put into the most tricky departments – such as post-Railtrack transport – and turn chaos into calm with his methodical, wry approach.
My hunch for the current coalition is that Philip Hammond, another undemonstrative but wily character, could play a similar role, surviving in cabinet as others fall by the wayside.