Alistair Darling

Supplementary material:  (i)  links to contemporary reports ; (ii)  notes on fiscal developments.

Alistair Darling MP.
Photo © Crown copyright 2007, used by permission.

Alistair Darling (born 28th November 1953) was the British finance minister, the Chancellor of the Exchequer, from June 2007 until May 2010, and prior to that served from 1997 in various senior ministerial posts. He is one of five Members of Parliament (MPs) for the city of Edinburgh in Scotland, a seat he has held since 1987.

Ministerial career

Alistair Darling came to government with the election of the Labour Party and Tony Blair in 1997, following his earlier career as a solicitor, service as local councillor, election as MP for Edinburgh South West, and successive roles as Opposition spokesman on various issues. He was first appointed Chief Secretary to the Treasury (May 1997 - July 1998), deputising Gordon Brown as Chancellor - an experience which would make him the obvious choice for the finance portfolio in Brown's first Cabinet (the UK executive branch of government).

Darling was appointed Secretary of State for Social Security in July 1998, a post he held until the election of the second Labour government in June 2001. His next position was Secretary of State for the Department of Work and Pensions, until May 2002. He was then given two positions, as the Secretaries of State for Transport and Scotland, which he occupied until May 2006. His final job in Tony Blair's Cabinet was as Secretary of State for the Department of Trade and Industry.

Chancellor of the Exchequer

The economic developments during Alistair darling's chancellorship are described in the article on the Great Recession, and their effects upon the Government's finances are summarised in the addendum to this article

When Alastair Darling took over as Chancellor of the Exchequer in June 2007, some banks were beginning to suffer the effects of the subprime mortgage crisis, but the economy was continuing to grow at an above-trend rate. Later in that year, however, commodity price increases were beginning to affect growth, and the banking crisis was getting worse. In his November pre-budget report, Alistair Darling warned that a continuation of the banking crisis could reduce the rate of further growth. By the middle of 2008, his fears were realised, and the economy was suffering from the effects of a major international financial crisis which he described in an interview as arguably the worst in 60 years". (That statement was attacked by the Shadow Chancellor as an admission of the Government's failings and a contradiction of reassuring statements by Gordon Brown).

In the October 2008, Alistair Darling and Gordon Brown responded to the intensification of the financial crisis, that had been triggered by the September collapse of the United States Lehman Brothers investment bank, with a rescue package for British banks , and an international campaign to persuade other governments to support their banks. In November, Alistair Darling announced a fiscal stimulus amounting to 1.5 per cent of GDP, including a temporary 2.5 percentage points reduction in value-added tax and a bringing forward of £3 billion of capital investment. His announcement had a mixed reception: it was called deceitful by the Shadow Chancellor and "crass" by the German Finance Minister, but was subsequently described as successful by the International Monetary Fund. There were responses to criticisms of the tax reduction by the Institute for Fiscal Studies and the Centre for Economics and Business Research

The growth of output resumed in the 4th quarter of 2009, and attention turned to the problem of reducing the budget deficit. As Chancellor of the Exchequer, Alistair Darling inherited from Gordon Brown a budget deficit of 2.7 per cent of national income, which was above the OECD average, but lower than the deficit that Gordon Brown had inherited from his predecessor.

Following the 2010 election, Darling remained a senior Labour figure for an interim period as Shadow Chancellor, responsible for scrutinising the government's financial decisions until October 2010, when he retired from the Shadow Cabinet.