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Labour must learn from their history or be doomed to repeat it | Andrew Rawnsley

Ed Miliband wants us to dismiss Alistair Darling’s memoirs as irrelevant to today’s debates. He’s wrong

When it comes to taking revenge, Alistair Darling is a politician who likes to serve the dish chilled. Whereas Tony Blair and Peter Mandelson rushed out their books within weeks of Labour’s ejection from power, the former chancellor has allowed 16 months to elapse before publishing his version of events. In the era of the instant memoir, that counts as a decent interval.

A drip of pre-publication leaks have identified the targets of his scorn. Sir Mervyn King is an “amazingly stubborn and exasperating” governor of the Bank of England whose reluctance to rescue Northern Rock exacerbates the first bank run and one that foreshadows the great crash. Mr Darling confirms that the Labour government came close to sacking the governor when his first term was up. More alarming in its way is the explanation for why they changed their minds and kept Sir Mervyn on: apparently, there was no-one else who could do the job. Sir Fred Goodwin, that complete and utter banker, responded to the financial meltdown in the autumn of 2008 by behaving “as if he was off to play a round of golf”.

This is actually politer than some of Mr Darling’s withering observations about his former colleagues in government. It is these that will have most resonance at Westminster both by re-exposing painful divisions which still torment Labour and by handing some useful ammunition to the Tories. Ed Balls, then the education secretary, is charged with running a secret “shadow Treasury” at the behest of Gordon Brown.

The central political relationship of the book is bound to be that between the author and the “volcanic and brooding” former prime minister. This is not the first time that Mr Brown has been compared to a sulking volcano with anger-management issues. Nor is it the first time that he has been depicted as a brutish, paranoid, volatile and treacherous boss. But there is extra sting in the portrayal when it comes from Alistair Darling because the two men were once very close. This is payback for the way in which Mr Brown relentlessly undermined his chancellor because he spoke too candidly about the severity of the recession and the scale of the fiscal crisis.

I know Alistair Darling to be a thoughtful and civilised man, so I expect there is more to his account of his 1,000 days at Number 11 than the retelling of some of the vicious internal battles and ugly personality disorders that racked the dying days of the last government. But if he wants to settle some scores – well, that’s the way of these memoirs and everything suggested by the leaks has the ring of truth. It is correct that the governor of the Bank of England’s first response to the financial crisis was intellectually rigid and dangerously so. Few people outside their immediate families would quarrel with Mr Darling’s verdict that the bank chiefs were “arrogant and stupid”.

Ed Balls has baldly denied that he was ever interested in grasping Mr Darling’s job – not even a teeny, weeny bit, Ed? These disavowals sound as unconvincing as his earlier, risible denials that he ever had anything to do with plots to topple Tony Blair. Mr Darling reportedly quotes a conversation with Mr Blair in which the latter says: “Dealing with GB (Gordon Brown) is like having dental treatment with no anaesthetic.” From my researches, I already know how abominably Mr Brown treated Mr Darling. On one occasion when they were locked in a row, an enraged prime minister vented at his chancellor by grabbing random objects off a desk and hurling them around the room. Asked by a gobsmacked friend how he had coped with the prime minister’s temper tantrum, Mr Darling stoically replied: “I ducked.”

Now, I know how some will react to another memoir by a former member of a dead government. They will say that this is all history, a lot of which has already been detailed in earlier books. “History” was precisely the word used by Ed Balls when he tried to bat off the accusations levelled at him. A dismissive shrug has also been the response of Ed Miliband, saying: “The important thing for me to do is talk about the needs of the economy going forward.” To reconvert voters to Labour, he needs to soften their attitudes towards its record in office or, better still, persuade them to forget a lot of it altogether. Mr Miliband wants everyone to be concentrated on what is going wrong for and within the coalition in the here and now. Growth is somewhere between puny and non-existent. Financial markets are fragile. The government is split over the scale and pace of banking reform and divided again over the future of the 50p tax rate on top earners. Mr Miliband would like the focus to be on the coalition’s travails, not on the record of the last government.

He will not get his wish – certainly not entirely. Labour’s present is still very much entangled with its past. It will not have a promising future until it comes to terms with that. This is partly a matter of personnel. Many of the leading characters of the last government have retired from the front rank, but not all. Ed Balls is still very much around as shadow chancellor. Yvette Cooper – Gordon Brown’s spy at the Treasury in the Darling version – is shadow home secretary. Mr Miliband himself is a protege of the former leader who led Labour to its second-worst election defeat since 1918.

There is a further, more important reason why the Darling memoir matters. It re-illuminates the fundamental divide on economic policy which split the last government and still confronts Labour today. Why did the two Scots at Numbers 10 and 11 find themselves at war? Before Mr Brown became prime minister and Mr Darling became chancellor, they had been friends for 20 years. They broadly agreed on the bank rescues and the need to take emergency measures to resuscitate the economy. They fell out – bitterly so – over the deficit. The chancellor believed that they had to lay out a robust plan to reduce the deficit, including specified cuts, in order to look credible to the financial markets and the electorate. The prime minister hated that idea and preferred to go on making spending promises.

This was an argument both about economics and about how to win elections. It was not resolved then and Labour still wrestles with the question now. Mr Darling believed that being reasonably honest with the country was the way to win its respect. Mr Brown feared that voters, especially potential Labour voters, could not cope with the truth. Perhaps, too, he could not really cope with the truth himself as he surveyed the ruin of his boast that he had abolished “boom and bust”. So Mr Darling told everyone to brace for a spending squeeze that would be more severe than that imposed by Margaret Thatcher. But Mr Brown vetoed any specification of where the cuts might fall. As a result, Labour ended up in the worst of all worlds: admitting that it would be cutting but not gaining any respect for doing so because it wouldn’t say how.

And that is where Labour still is today. In theory, they remain committed to the targets for deficit reduction laid down before they left office. Though not as severe as the programme pursued by the coalition, that required a very painful £44bn of cuts by 2014-15. Mr Balls never liked the Darling plan. Mr Miliband gives the impression that he is sliding away from it. He did not repeat the commitment in an article for the Financial Times which argued for “a more balanced approach to fiscal policy”. The Labour frontbench as a collective have adopted the Brownian approach of never specifying what spending they would reduce while opposing just about every single cut proposed by the coalition.

This has its obvious advantages as a short-term, oppositional tactic. Voters don’t like the cuts. There are plenty of people, including respectable economists not of the left, who agree with Labour that the coalition is going too far, too fast. Some of the cabinet are highly nervous about the chances of Britain tipping back into another recession.

So why would Labour want to do anything more than shout that the coalition is getting it wrong? Because that is not, over the longer term, the route to restoring the party’s lost credibility on the economy. Attacks on the coalition’s plans, even when the critique is persuasive, are necessary, but they are not sufficient. To win the next election, Labour will have to convince swing voters that it would be a more reliable steward of the nation’s finances and livelihoods.

Alistair Darling has not done his party any favours by publishing a memoir that adds further confirmatory detail about the profound policy disputes and poisonous relationships which consumed the last government. The former chancellor does do his party a service by reminding them why they lost power and indicating what they will have to do to regain it. Labour was thrown out of office principally because it was no longer trusted with money. Labour will not see power again until the party has won back its economic credibility.

The way forward is not to ignore history, but to learn from it. © Guardian News & Media Limited 2011 | Use of this content is subject to our Terms & Conditions | More Feeds