The economy is key to both defending the union and defeating the coalition, Alistair Darling tells Robert Philpot and Adam Harrison

Darling’s are, therefore, unsurprising hands in which to place the leadership of the pro-union Better Together campaign in the run-up to what he terms ‘the biggest decision that Scotland has taken for 300 years’. The campaign to persuade people to vote ‘no’ to independence in 2014 was launched at the end of last month. It will bring Labour together with the Conservatives and Liberal Democrats, the two other principal unionist parties in Scotland, in a campaign which will last two-and-a-half years. ‘It will make an American presidential election look like a very speedy affair,’ remarks Darling.

It is, however, one that he is ‘pretty confident’ the pro-union forces can win. He cites polling commissioned by the campaign which indicates that ‘opinion in Scotland on this question has not really changed, not just in the last five years but the last 30’. Moreover, the poll suggests that less than one in three of those who voted for the Scottish National party in the 2011 parliamentary elections will vote for independence. The campaign will, like everything else, Darling believes, turn on the question of the economy: ‘People are quite hard-headed. They’ll ask themselves: what are we better off doing?’

Vowing that ‘clout in Europe’ will be an issue in the campaign, Darling warns those entertaining backing Scottish first minister Alex Salmond to beware the fate of Ireland. ‘Europe is run by big countries – you can see that now. It’s not run by small countries. Spain got a better deal than Ireland. Why’s that? Because Spain is bigger.’ Indeed, he also draws a contrast between the way in which he handled the near-collapse of the Royal Bank of Scotland – ‘I could write a cheque to stop it … because the UK is big enough to do that but Scotland would have found it very difficult’ – and Ireland’s difficulties in saving its banks. ‘Ireland had run a fairly tight ship in terms of it being a surplus country, but it had to take over three banks which crippled it and it now has to go to the IMF [and] the European Union,’ argues Darling.

The former chancellor is, however, wary of suggesting that Scotland is not a viable independent state: ‘I don’t think anyone would argue that Scotland couldn’t “go it alone”. Most countries could.’ However, he warns that an independent Scotland would be ‘heavily dependent on revenues from North Sea oil which, on any view, is a diminishing asset. You are terribly exposed to one particular sector, which I think would worry people.’

Whatever Darling’s confidence that the union can be saved, he does not underestimate the skills of his principal opponent. ‘Salmond is a very capable politician but he is not without his weaknesses,’ he suggests. Indeed, Darling is in no doubt that revelations about the first minister’s relationship with Rupert Murdoch were ‘very damaging’ in the Scottish local elections, when the SNP failed in its avowed intention to seize control of Glasgow city council. Darling also believes that Salmond ‘is eminently beatable. He has been very fortunate that for a long time people didn’t ask questions of him and he was able to just assert things and hope nobody asks the second question like “why?” or “how?”.’ Labour’s leader in Scotland, Johann Lamont, believes Darling, has begun to put Salmond under real pressure at first minister’s questions, leaving him ‘floundering’.

Darling himself does not completely rule out a return to Labour’s frontbench after the referendum: ‘I am spending the next two years on the referendum campaign in Scotland which really precludes me from doing anything else because it a pretty full-time commitment. So that’s me up until 2014, if Alex Salmond has his way.’

But while Darling believes that Salmond is not invincible, what does he reckon of the chances of Ed Miliband and Ed Balls besting David Cameron and George Osborne in the central battle of this parliament: who can be trusted to run the economy? The former chancellor accepts that it was ‘inevitable’ that when Labour lost the election in 2010 the ‘benefit of the doubt’ would go to the new government. However, he believes, Labour ‘didn’t need to lose the argument, but we did, and it takes time to recover from that’. Indeed, Darling detects things already beginning to shift: he is ‘pretty sure’ that, while he may not describe it as such, the chancellor will abandon his stringent austerity plans and introduce a growth-focused ‘Plan B’ either at the autumn statement or next spring’s budget.

Despite the jostling between them when Labour was in government, Darling praises the shadow chancellor: ‘Ed Balls is getting a hearing now that he didn’t get 12 months ago.’ Darling also strongly endorses Balls’ and Miliband’s attempts in January to restore Labour’s economic credibility by refusing to guarantee that they would reverse all the Tory spending cuts. ‘You’ve got to stand on a credible economic platform that resonates with what the public think and I don’t think there are many [people] that believe that we’re in a world in which you can’t have spending cuts of any sort,’ he argues. What of the attacks on the Labour leader and shadow chancellor led by the union Unite following the speeches? Darling is sanguine: ‘I accept that if you’re a trade union … you don’t have to make any compromise because it’s all a negotiation.’

Darling believes that the coalition’s difficulties stem less from the fact that it is cutting spending and more from the way it is doing it: ‘It is impossible to cut public expenditure without there being some pain somewhere so what you have to try and do is try and make that as fair as possible.’ He thus attacks Osborne’s decision to cut the 50p rate of income tax: ‘I said it was temporary but I certainly would not have contemplated taking it down in this year’s budget.’ He adds with a note of derision: ‘What signal does it send when your first port of call is to deal with people who, by and large, can struggle by?’ Indeed, Darling suggests, the reason Osborne’s ‘most ill-advised of phrases – “we’re all in this together” – has stuck … is because people don’t think that.’

Nonetheless, he thinks there are important lessons from the last general election that need to be learned: ‘At the last election all three political parties got through the general election without actually saying what they were going to do with the economy. I think it would be bad for the body politic if an attempt was made to do that this time round.’

Politically, Darling suggests, Labour would have benefitted from greater clarity before the 2010 election about its intentions: ‘If we had been more explicit saying “these are the things we are going to do” it would have been far easier to then say “the Tories are going to do more”. If you take VAT, for example, my argument was that if we say we’re going to increase VAT by one per cent this year, next year, the year after and then say to the Tories “right, what are you going to do?” they would have been in difficulty, I know that. Their dread was that we would actually specify some things.’

That said, Darling believes that Labour should be ‘more confident’ in defending its time in office: ‘There was a time in 2010 where there were too many people running around saying it was all terrible and we’d done nothing useful. David Cameron himself said when he went into the door of No 10 that Britain was a better and more compassionate place than it had been 13 years earlier. I think why on earth do we not at least take that as our starting point?’ Like all governments, he suggests, Labour ‘got some things right and got some things wrong’. But he urges the party not to ‘spend much time feeling guilty when we’ve no reason to’.

And, from the safest pair of hands in Westminster, comes a word of advice. While carefully noting that Miliband is ‘quite right’ that Labour should recognise ‘and put right’ what it got wrong, Darling issues a warning to those who fail to defend its time in office: ‘If a party isn’t confident about itself, then how can it expect the voters to be confident?’

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Photo: Downing Street