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In defence of Alistair Darling

Evan Davis | 11:54 UK time, Wednesday, 3 September 2008

I don't want to support or oppose the Chancellor in the substantive claims he made in his now notorious weekend Guardian interview. It's no longer my job to have a view on such matters as whether current economic times "are arguably the worst in 60 years".

But surely Mr Darling deserves defending from the various accusations laid at his door, of everything from talking us into recession and causing the pound to plunge.

Has he really dropped a clanger as The Times asserts? And has his loose talk failed "to provide consumers and investors with necessary reassurance" as the paper's leading article argued yesterday?

darling203.jpg

Of course not.

Did consumers and investors take much comfort last week from the government's out-of-date (and now absurd) 2.5% growth forecast for next year, which has not been subject to anything like the same level of mockery?

Anyway, since when has it been the government's job to encourage investors to invest, or to entice consumers back into the shops? I would rather ministers gave us unbiased guidance on these matters, rather than advice it thinks is wrong on the grounds there is some bigger social purpose from so-doing.

And why do free market newspapers now find that an important government role is to talk up the pound? (The currency probably needs to drop to soften the downturn, as the falling dollar has done in the US. Who knows what the "right" level of the pound is at the moment?)

Arguably...

Put aside the fact that the chancellor diluted his own comment by using the word "arguably", a nuance which journalists have mostly dropped in the retelling of his words. Put aside that he was not apparently saying the country is poorer than in 1948, nor that this is likely to be the deepest recession since then either, claims which it has been all too easily to ridicule.

Put aside too, the fact that many people have made economic comparisons between today and the 1930s without being mocked.

Even putting those points aside, all the Chancellor did was simply to align the government's own narrative on the economy with that which the rest of us had already been believing for several months.

In the face of all the evidence to the contrary, I think it would have been a mistake for Mr Darling to have stuck to his previous line that we are uniquely well-placed to weather the storm. It seems unlikely he had special powers to move us all with his words of encouragement and positive thinking .. if only he hadn't blown it.

If political spin could move the economy so far, let's improve the quality of our schools by demanding that education ministers tell us inner city schools are better than suburban ones. And maybe the foreign secretary could get Russia out of Georgia by telling us they are not there at all.

No, if we could make the economy strong by lying about it, I would be out there for lying all the time. But it didn't work in the Soviet Union, and it won't work in a country with a free press either. Better that Mr Darling tells us what he thinks, than he tells us what we'd like to hear.

And as for Mr Darling exacerbating a crisis, I for one would like to meet the currency traders who judge the appropriate level of the pound by earnestly listening to the forlorn optimism of government ministers exhorting us to believe things are not as bad as we think they are.

I can't understand why the criticism has been applied to the Chancellor's unusual departure from the normal rules of political rhetoric, when surely it is the normal rules that demand reform.

Comments

  • Comment number 1.

    An excellent argument, Evan, and I support your contention that truth is better than dissimulation.

    In my view Alastair Darling was being quite candid in his Guardian interview and I, despite being a sharp opponent of Labours' economic policy to date, found myself agreeing with his perceptions.

    The issues now are not whether we are going to have a recession or not, whether or not there is a run on sterling, whether or not there is inflation but what are we going to do about the recession, the inflation and the value of the pound.

    The blame game the political class and their media acolytes like to indulge in as bankrupt as a sub-prime mortage fund.

    We are where we are and we need to set about getting somewhere better. This is the issue, this is where the politics needs to be.

    In the last twelve months both the state and the markets have let us all down very badly. Our perceptions need to change as quite simply we cannot go on as before.

  • Comment number 2.

    Excellent article.

  • Comment number 3.

    Where does realism end and damaging depression begin. Much of economic activity is sentiment. An army with poor morale is prone to defeat. A country with poor morale is likely to slide. Can't the Chancellor be realistic and encouraging at the same time?

  • Comment number 4.

    Evan,

    I have long read your blogs and watched to your broadcasts with keen interest. You have always provided a factual unbiased view, regardless of subject matter and you are sadly missed on the BBC News network. However, this post baffles me!

    The position of Chancellor of the Exchequer is of great importance and people look to the incumbent for advice and reassurance. Whilst a reality check is sometimes needed, Alistair's interview at the weekend was reckless and irresponsible. How can he say, arguably or not, that we're facing similar economic conditions to post-war, bombed out, food rationing, bankrupt Britain??

  • Comment number 5.

    It seems some of the above commentors didn't actually read the article, which was really quite tame.

    If people have read more into Darling's words than was actually there, then it is surely their fault, not the Chancellor's? It seems to me more likely that if the Chancellor's words really had an impact it was because the traders were looking for an excuse to trade the way they did - or maybe they would have traded that way anyway, and the Chancellor's words are now being blamed for political ends? Probably, both of these are true to an extent.

    Looking for one variable factor for an economic trend is, anyway, obviously nonsense!

  • Comment number 6.

    1947 was the bottom of the post-war recession, but 60 years ago in 1948 the USA began pumping cash back in to the economies of Europe via the Marshall Plan, and the foundations were laid for the 'you've never had it so good' years that followed.

    So we should read Alistair's interview with confidence and bounding hearts for better times ahead.

  • Comment number 7.

    There's alot of people outside of the UK who are not very excited at seeing the value of pensions and assets going south. So it's the pounds turn what next the Euro perhaps, that is mighty over valued too. I suppose when the pound gets to 1 for 1 on the Euro it'll be time to think about a currency change in the UK.

  • Comment number 8.

    Bravo - have been thinking much the same for the past few days. How much do we complain about politicians being dishonest? It's refreshing to have a straightforward opinion from one, even if there were subtler machinations behind the decision to give it (see - I'm a product of the times and simply can't trust a word any of them say...).

  • Comment number 9.

    Mr Darling also interrupted his holiday to give an interview to the local Stornoway Gazette, in which he stuck to the expected script:

    "I think the economy will keep on growing. We have the fastest growing economy of the developed world. I don't agree that there is going to be a recession but the next 12 months is going to be difficult and we hope that oil prices will start to come down."

    I suppose it all depends on what he counts as "the developed world."

    (Students of spin should read the article, especially Mr Darling's telling of his story about falling off Stornoway Pier, in the context of the two big local issues - fishing and petrol prices).

    Personally, I tend to agree with Mr Darling's Guardian assessment. Some aspects of the UK's outlook - especially our weakening ability to compete for other countries' energy exports - are absolutely dire.

    Perhaps the Chancellor's willingness to take a risk with telling the truth was founded on the belief that, if the worst came to the worst for his job, he, at least, has a thick-walled home and a supply of peat fuel to fall back on in a few years' time: more than most people in the country will be able to look forward to unless the Government pulls its head out of the sand very soon.

  • Comment number 10.

    Well said that man!

  • Comment number 11.

    I'm so glad someone has finally brought some sense to this.

    I appreciated the chancellor's honesty...

    But politics correspondents (not "political" - the last thing I want is a "political" correspondent) have such a skewed sense of the way they should cover politics, they could only see the story from the individual actors' perspectives...

    In what universe is it proper that we *expect* that, by being open and honest, a politician has actually "gaffed"? In the universe of the political correspondent, which is so miserably lined with the claustrophobia of "perceptions" and "briefings" that said correspondents can usually only report political doings with an emphasis on machinations, who's up, who's down and who's for the chop.

    I'm just an ordinary voter (and journalist), but it seems to me that our politics correspondents do our country a disservice by engendering in the electorate an unhealthy mistrust of politicians' actions. We appear to have reached a point where we cannot judge an occurrence merely on face value - in the game of politics journalism (and I have little doubt that it is just a macho game for many such correspondents), there must always be something *more*.

    Well I think they've got it wrong this time. And I request an end to the kind of politics reporting that automatically expects the worst of an honestly-motivated political statements. I call for all those politics reporters who are *too close* to politics itself, all those who have ambitions to cross over in to politics PR, all those neglecting the real issues in favour of the tawdry internal character assessments... to be banished henceforth.

  • Comment number 12.

    I hope I'm not misreading you, but you seem to be attacking a straw man. People who have criticised Darling for his apocalyptic assessment are not thereby arguing that he stick to his previous line. Lying does not improve the economy, but self-reinforcing panics can be set in motion by comments like this, and if we can have bubbles, we can have... what's the opposite of a bubble?

    I do believe that the chancellor was being candid in making his comment, but that revealed something more frightening than his prediction. It revealed a chancellor in a state of panic, and a lack of knowledge of economics in recent history.

  • Comment number 13.

    Sorry, but I cannot agree. In the piece he even admits that he didn't realise the effect his words on Stamp Duty would have on the housing market. That is plain sloppy. All the rest of us keen to buy or sell knew immediately that he had just killed the market stone dead. Look on any property comment web site at the time, the reacton to his careless words was immediate. He should have immediatley quashed the idea not let it fester and ruin some poor souls agreed sale.

    His job, as even he recognises in the piece, is a delicate one. He can and does move markets.

    I wish BBC journalists were not so quick to give Labour the benefit of the doubt but I suppose they think they have to be nice to keep the invites comng and the doors open. That's what's wrong with journalism today, too many are too pally with the government.

    As for his honesty - yeah, right. And as for the hidden agenda in the comments - don't sack me Gordon, I've been your pal for years....

    And as for his competence - Northern Rock says it all. He had no clue about the storm and yet the markets were well aware that there trouble was building and certain Banks and B Socs were in trouble. Isn't it his job to keep informed? And then the dithering was painful to watch.

    Okay, so we all know it's all Brown's fault but Darling can at least stand up against him more openly and run the Treasury first hand.

  • Comment number 14.

    "All to easily to ridicule?"
    Gordon Bennett, and this is not O level txt English?

  • Comment number 15.

    I actually feel rather sorry for Darling, because he has inherited the mess that Brown made. Look at the 10p tax fiasco, that was down to Brown, as was the non-dom and the CGT mess. Northern Rock is another example - Brown set up the FSA against the best of advice - it didn't even begin to understand the problems at Northern Rock. Let's not forget that Brown was constantly going on about he would not let house prices affect the economy - until it suited him.

    Now of course Darling will take the blame over the failure to stick by Brown's meaningless "golden" rules - actually fools gold. Brown used PFI to incur £100 billion pounds of debt and then keep it off the books. This is a classic example of Enron-style accounting, which Brown was so fond of criticising.

    Unfortunately Darling is too weak to stand up to Brown and he'll be gone in 12 months

  • Comment number 16.

    Dear Evan,

    I enjoyed your piece,but,like some other
    readers, found it too exculpatory of the
    Chancellor.You mentioned his now absurd
    growth forecasts for 09 (and indeed for08)
    for the UK that he made last autumn.I was
    annoyed at the time when he made these
    as they were quite clearly political rather
    than 'truthful'.He was
    thereby attempting to 1)argue that the
    New Labour economic 'miracle' was on track
    and 2) disguise the level of the UK's fiscal
    deficit.Politics and the truth are not (maybe
    have never been) comfortable bedfellows.

  • Comment number 17.

    THE DAILY TWIT



    Gordon Brown sold off the golden eggs[well didnt he do] and Alistair has to make sure whats left of the golden goose gets eaten[before it goes rotten ] by the consumeriat to create a feel good factor before the next election.

    Apart from legalised [big]brothels made from ex mps declining london residences its hard to imageine where the next speculative bubble might be

    Governments will be forced to take an equity stake in things going down[everything except the deficit]] and equity sounds soo much better than debt ,it would make a great
    name for a credit card as would joker and jam tomorrow

    As an optimist i would say things can only get barter, parliament can be turned into a pawn[pawn] shop with their balls clearly visible from outer space to attract the passing interplanetary jolly roger trade

  • Comment number 18.

    I agree with all of Evan's comments here, although there is a somewhat sinister aspect to Darling's comments that has hitherto been ignored.

    The only people who think that current conditions are the worst in 60 years are the banks. These comments imply that the Chancellor's main focus is on the Square Mile.

    How can the people be expected to trust a Chancellor who is more concerned with the troubles of large corporations than individuals?

  • Comment number 19.

    The Daily Twitagraph

    EDDY TORYILL
    Post18, Of course Alistair is focused on the square mile, thats where the government finances its deaficits ,creates the illusion of growth ,aquires corporation tax and not least it delivers the ecycles on time [despite the track being torn up and sold to smelters in Shanghigh]

    At the moment the Buzt Chancellor [lightyears ahead of his time ] is maxed out on his credit card and needs an increase on his credit limit [to infinity and beyond ],however ,the banks want more collatteral or failing that cash [22]

    Providing the Bank of England gives them more money ,then they will extend the chancellars credit to infirmity and beyond as they did for homeoweners

    Since the pound is down 10% those foreigners wishing to purchase govt debt from the square smile can get 10% extra free ,who knows next year it may be buy one get one free .

  • Comment number 20.

    What has the Chancellor got to say about pensions?

    It is Govt policy that we should all save more for our pensions although there is no guarantee that this will prove a worthwhile objective except for the very rich.

    Last weekend the Telegraph reported that personal pension funds had fallen in value 20% in the past year. So tell me, what EXACTLY is the point of saving for a very uncertain private pension?

    During the last year anyone putting their savings on deposit could have got at least 5% net. This means that the differential return between leaving savings on deposit and saving in a private pension was a whopping 25% last year. And in the meantime the saver would have far more ready access to and control of his savings, which could be useful in these uncertain times.

  • Comment number 21.

    Dear Evan

    Over the years I have read and listened to Alistair Darling and have the utmost respect for him as a politician.
    There has been a 'spin' put on his comments because the Labour party and their opposition are consumed in themselves. I believe that Mr Darling is a reflective person who brings integrity to his work.

    Thanks Evan as always for your interpretation of the complex and making it digestible.

  • Comment number 22.

    What you're ignoring is that consumer confidence is an integral part of the economic landscape. Reduce it, you potentially increase the scale of a downturn. Improve it, you may achieve the opposite effect. Feelings of economic well-being are based on a mix of reality and sentiment - there is absolutely no justification for the Chancellor to do his utmost to increase negative sentiment at the same time as reality is impacting so heavily on consumer spending patterns. Like you, I don't support lying politicians, but it would have been no more deceitful had Darling pronounced that the fundamentals of the economy were far better than at the start of any economic downturn in the past 60 years.

  • Comment number 23.

    Evan,

    I 100% agree with the sentiments of this piece. I have felt strongly for some time that the bouncing of lies between politicans and press serves no purpose and in fact is extremely dangerous for society.
    The press have been crying wolf about the house price crash since the last one - simply so all those journalists can feel smug and prove to themselves how much cleverer they are than politicans.
    In turn the Government has increasingly turned to lying (or spin as they call it) to counteract this position. The result is the audience (the public) now no longer believe either party, which is very dangerous when you need public faith to repair the markets - as you know, markets are all about sentiment.
    The sad fact is that it seems to be headline news that "Government Minsiter Tells Truth!" which means there is a very long way to go before the public start believing again. The Government is facing a prisoners dilemna but as we all know, if the game is played without trust, the results are usually bad for both parties.

    I sincerely hope this is now a turning point in the world of politics - a much overdue one.
    Remember, the truth shall set you free.

  • Comment number 24.

    " It seems unlikely he had special powers to move us all with his words of encouragement and positive thinking"

    "And in the economy, because so many different variables are upheld largely by confidence or sentiment,"

    Both comments by yourself Evan. What is it do sentiment and confidence and therefore the words of a Chancellor have an effect on economics or is it controlled entirely by mathematical formulae?

  • Comment number 25.

    Not bad, Evan, although you're not the first to take this stand. This is what the FT said a few days ago.

    Here's the address

    http://blogs.ft.com/westminster/2008/09/and-you-wonder-why-politicians-lie/

  • Comment number 26.

    Isn't this just more political expediency since Alistair Darling will soon have to revise his forecasts down sharply, explain that the public finances are in tatters and will need to borrow even more to counter the economic malaise. He is just preparing the ground for a rise in threshold in public borrowing and maybe some more taxes. Now he wants to become bearish on the economy so he can justify Labour's economic (mis)management.

  • Comment number 27.

    Since when does being truthful on one occasion merit praise? Even a stopped clock tells the right time once or twice a day. Does anyone seriously suppose that Darling's Guardian article heralds a new dawn? The real question -- for those not just interested in putting the boot into the Times -- is "Why did Darling decide to abandon for once the grotesque misrepresentation of our economic state he and Brown have been peddling for so long?"

  • Comment number 28.

    Mr Darling’s comments concerning the gravity of the economic crisis the UK finds itself in should be considered in the context of the role he occupies as the principal steward of the financial health of millions of Britons. Throwing your hands up helplessly as a tidal wave threatens to engulf you is not leadership. And if millions are depending on you to act with guts and resolution the gravity of the crime is hugely compounded. As has been pointed out no-one has any idea how serious the current economic problems will become. Facile, doom laden predictions from the comfort of an armchair by our Chancellor serve absolutely no useful purpose and have the potential to significantly deepen the gravity of the situation. This should not be a debate about whether Mr Darling’s statements are accurate or not, it is a debate about the quality of leadership, skill and determination exhibited by the man who runs the UK economy. Mr Darling’s latest self serving, defeatist, irresponsible musings only highlight the fact that this is man who should be spending his time doing something which does not impact the financial futures of millions of Britons.

  • Comment number 29.

    I am a Licensed Insolvency Practitioner, so probably see things slightly differently to some people.

    For far too long people have been coming to me for advice and when I have told them that I could have helped them 3/6/12 months ago, but it is now too late. The usual response has been that they heard so much about how the economy was getting better that they thought they could ride out the wave. Instead they have lost their homes, their businesses or both.

    In my view the 'boom/bust' economy was like throwing pebbles in a pond - there are small ripples with a little effect, but generally not too much. This government removed the pebbles, so the pond was far smoother. At the time this seemed a 'good thing'. Unfortunately the pebbles were then all thrown in together at the same time and instead of a lot of small ripples caused the tidal wave that led to the collapse of Northern Rock, and subsequent problems for us all. The ripples would have warned us (the equivalent of water going up our noses), instead a lot of us were taken by surprise and drowned.

    Was it political suicide to say your predecessor, now your boss made a pig's ear of the economy? We will probably know within months.

    Will his frank talking perhaps get some people to start swimming or get out of the pond, and do something before it is too late? Hopefully - again we will know within months.

  • Comment number 30.

    A topic for a truthful answer,

    Why do MP's always take a (much) higher pay rise each year than all other Public Sector Workers ?

    Why do they feel the need to increase the difference between their pay and the rest of the Public service ?

    People should be told !

  • Comment number 31.

    As afr as local authorities deposits with Icelandic banks are concerned - It is worth noting that most Local Authorities have highly paid finacial directors, some of which get paid more than the PM, they can not cliam the same protection as an individual. If they have taken professional advice then they should claim against the professional who advised them and sack their finacial director/chief exec for being so stupid.

 

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