Alistair Darling has been diverted away from Labour as he heads the cross-party Better Together campaign
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The short walk to Alistair Darling’s Edinburgh front door is a path associated with impending doom. It was here that Fred Goodwin, the boss of Royal Bank of Scotland, came calling with his head bowed in the autumn of 2007, seeking an audience with the then Labour chancellor.

“Fred never talked to anyone very much, so when he said he wanted to see me in Edinburgh, alarm bells rang,” Mr Darling recalls in the front room of his home in Morningside. “I was taken aback by just how nervous he was.” Mr Goodwin said the markets believed RBS was about to run out of money: they were right.

Today, RBS is still ubiquitous in Edinburgh: the bank’s logo is plastered all over the city’s airport, it adorns the blue shirts of Scotland’s rugby team. But that is only because Mr Darling, with the aid of £45bn of British taxpayers’ money, bailed out the Edinburgh-based bank a year after Mr Goodwin’s visit.

“Had it been the size it was then, and Scotland was independent, it would have bankrupted Scotland,” Mr Darling says, adding it would have been the 21st century equivalent of Scotland’s disastrous colonial Darien adventure, which drove the Scots into a union with England.

Mr Darling is now on another rescue mission: to preserve the United Kingdom when Scots vote in an independence referendum in September. “In some ways it’s bigger: it’s about the country in which I live.

“You can fix the banks, albeit at some considerable cost, but if you vote for independence: that’s it. You can’t turn back. The nationalists only have to win once by one vote and that’s it.”

Mr Darling’s credentials as a former chancellor – albeit someone who was at the helm when Britain’s economy suffered its biggest ever crash – made him an obvious choice to head a pro-union Better Together campaign which has put economic issues at the heart of its pitch.

That has not stopped anonymous Conservatives saying Mr Darling is running a “comatose” campaign.

“It doesn’t worry me in the slightest,” Mr Darling says, noting that Mr Cameron’s party has only one MP in Scotland. “Their manual on winning landslide election victories in Scotland is rather dusty.”

He argues that Scots are wearying of an apparently endless campaign and that it is “a marathon not a sprint”. Mr Darling also points out to his detractors that the polls suggest the pro-union side’s lead has barely moved in recent months.

The former chancellor says – in the downbeat manner that used to infuriate his old boss Gordon Brown – he is “enjoying” the epic campaign, before adding the rider: “It has its ups and downs.” Mr Darling has previously complained about online abuse from so-called “cyber nats” aimed at pro-union campaigners but says now that the exchanges with his opponents are generally no more than “robust”.

The former chancellor says the economy is the pro-union side’s most potent weapon and the question of the currency in particular. But he accepts that up to 1m of 4m voters have yet to make up their mind: “There’s a lot to play for.”

Alex Salmond, Scotland’s first minister, wants Scotland to form a currency union with the rest of the UK with the Bank of England as the lender of last resort standing behind Scotland’s financial services sector, employing 90,000 people and comprising 9 per cent of its gross national product.

But Mr Darling argues that a currency union would require the rest of the UK to underwrite banks such as RBS and agree to a fiscal pact where Scots would have a say in the setting of budgets at Westminster. “It’s more likely they would say: we won’t do it,” he says. “That would be ruinous for Scotland’s financial services sector.”

But Mr Salmond is surely right that, in the end, the rest of the UK and an independent Scotland would hammer out a deal? Mr Darling’s mission is to sow seeds of doubt: he says it would be a “massive step” for Westminster to share fiscal sovereignty with a separate country.

“I don’t accept you can assume that 55m people who don’t live in Scotland will fall into line with something nobody has asked them about,” he says. “In any event, the big question in the referendum campaign is: what is the Plan B? ”

Mr Darling recognises the danger of appearing to strike a negative tone, with the risk that Mr Salmond’s relentless optimism about the future for an independent Scotland could sway voters but he says he will not be deterred from pointing out the economic risks.

The same applies to Europe: he says there would be a period of uncertainty, at the very least, while Scotland waited in line to rejoin the EU and that Edinburgh would be required to accept standard membership terms, including the use of the euro and the Schengen passport-free travel area. Mr Salmond says this is baseless scaremongering.

Mr Darling says if Scotland votes to stay in the union, it can expect more powers to be devolved, even if the main political parties cannot agree exactly what they should be. “I think it’s a process that will continue,” he says.

As for his own future, Mr Darling refuses to be drawn on Westminster speculation that he may return as Labour’s shadow chancellor, replacing Ed Balls, before the 2015 general election. Mr Darling says he has not even decided yet whether to stand again as an MP next time. “The day after the referendum I will sit down and decide what I will do,” he says. A lot could happen in the next seven months.

Alistair Darling’s pro-union arguments

Darling says: If Scotland had been independent in 2008, it would have been “bankrupted” by the collapse of RBS.

FT verdict: One only has to look at Ireland or Iceland to see the dangers of a big banking sector residing in a relatively small economy. Depends entirely on whether the rest of the UK would swallow Alex Salmond’s proposed currency and banking union.

Currency union
Darling says: The rest of the UK is likely to reject Mr Salmond’s proposal for a shared pound, underwritten by the Bank of England.

FT verdict: The pound is the biggest weapon in Darling’s armoury. Mr Salmond insists that it would be in the interests of the rest of the UK to carry on sharing the currency but his lack of a Plan B may scare some voters.

Darling says: “Free movement of people is fundamental. Why should you have to show your passport in Berwick or Carlisle?”

FT verdict: Darling is right that the rest of the UK might decide to impose border checks if an independent Scotland pursued totally different immigration policies. More likely, Scotland would co-ordinate immigration policies with London – just as Ireland does. There are no passport checks between Ireland and Northern Ireland.

Settling the independence issue
Darling says: “We need to win sufficiently well to put this to bed for a generation.” How big a margin? “I will know it when I see it.”

FT verdict: Quebec had two referendums on secession from Canada in 1980 and 1995, the so-called “neverendum”. A crushing no vote might settle things for now but a future Scottish National party government at Holyrood would surely seize any good opportunity to put the question again.

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