Alistair Darling, Labour’s former chancellor, will expose in his forthcoming memoirs the dysfunctional relations, animosity and suspicion at the top of Britain’s economic elite, as officials battled to contain the fallout of the biggest financial crisis since the 1930s.
The mild-mannered Mr Darling appears to have stored up his irritation towards some of his former colleagues for his memoirs, published next week, in which he reportedly calls Sir Mervyn King, Bank of England governor, “amazingly stubborn and exasperating”.
Mr Darling confirms how close the Labour government came to sacking the Bank governor after his first term in 2008, but then relented, apparently after failing to find a suitable replacement.
Mr Darling was frustrated by Sir Mervyn’s reluctance to rescue Northern Rock and to inject liquidity into the market – citing the risk of “moral hazard”. The chancellor became convinced that confidences entrusted in the Bank governor would inevitably be passed on to the Conservative opposition.
According to leaked extracts, Mr Darling also records the “prickly and strained” relations between Sir Mervyn and Lord Turner, head of the Financial Services Authority, as the tripartite regulatory system buckled under the strain of the banking crisis.
Extracts of “Back from the Brink: 1000 days at Number 11” were published on Wednesday by the Labour Uncut blog, an independent Labour website. The publishers, Atlantic Books, refused to confirm or deny the accuracy of the extracts and Mr Darling declined to return calls.
The former chancellor also directs predictable scorn towards Gordon Brown, the former prime minister, whom he believes undermined him from the moment he entered the Treasury in 2007. He confirms that Mr Brown tried and failed to replace him as chancellor in 2009 with Ed Balls.
The memoirs allege that Mr Balls and Shriti Vadera, a loyal Brownite minister, ran what amounted to a shadow treasury operation. Allies of Mr Balls, now shadow chancellor, deny the suggestion.
Mr Darling refused to have Lady Vadera in his team, and is said to describe her in his book as “only happy if there was blood on the floor – preferably that of her colleagues”. He says that Yvette Cooper, another Brownite, was sent to the Treasury as chief secretary in 2008 to “keep an eye” on him.
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