In his latest masterclass on How Not to Run the Treasury, Alistair Darling seems to have decided that it was a good idea to heighten fears about our economic problems. In a Guardian interview this weekend, the Chancellor warned that Britain is facing ‘arguably the worst’ downturn in 60 years, admitted that he’d underestimated the problem, and accepted that voters were ‘pi$sed off’ with the Government.
Surprise surprise: Darling’s gloomy prediction has had a dramatic effect on the UK pound this morning. Traders had already been selling off the currency in recent weeks, in expectation of interest rate cuts, but today the pound slumped to a two-year low against the dollar, and an all-time low against the euro – at one stage the euro was trading at £0.8139, its highest level since its launch in 1999. Stock markets were also down.
We’re all for honesty in political life – but there are times when politicians need to be the voice of calm and reason, not harbingers of doom. And that’s particularly true if you happen to be the Chancellor of Exchequer – when your public pronouncements can have a profound effect on public confidence, surely there’s a good argument for trying to accentuate the positives? 'It's an extraordinary situation that we've got a Chancellor of the Exchequer effectively talking the economy right down,’ Tory leader David Cameron told the BBC this morning (not unreasonably).
Worst of all, nobody seems to think the prediction is even accurate. There's no way he can know that things are going to get that bad - at least not yet, anyway. Back in 1948, there were about 3m people out of work – about twice the current total – rationing was in force, and inflation was running at about 25%. Unless the Chancellor knows something we don’t, we’re a long way off that. (Even the picture that accompanied the Guardian piece showed him sitting on a boat trapped against the rocks, while wearing a lifejacket. Does this man not have any advisers?)
And we can’t imagine the interview went down terribly well at Number Ten either. Darling got the job because he was seen as a safe pair of hands (so much for that) and a close ally of Gordon Brown. This interview is so at odds with the Prime Minister’s recent statements – and the party line that Darling himself has been spouting for the last six months – that it’s bound to lead to speculation of a big fall-out between the pair. Reports suggests there have been disagreements about the new package of revival measures due out this week – perhaps this was Darling getting his own back…?
Of course it may turn out that the beleaguered Chancellor is right about the extent of our current predicament. But either way, we can’t understand what good it’s done anyone for him to mention it now...