Alistair Darling feared the bank chiefs at the heart of the financial crisis were "so arrogant and stupid that they might bring us all down".
In his memoirs, the former Chancellor delivers a damning verdict on the leadership skills of the most senior figures in the High Street banks that had to be bailed out at the cost to the taxpayer of £50 billion.
According to a leak from his forthcoming book published by the Labour Uncut website yesterday, he is withering about the attitude displayed by Sir Fred Goodwin, former chief executive of the Royal Bank of Scotland, to the emergency. Mr Darling complains that Sir Fred behaved as if he was "off to play a game of golf" rather than confronting the threat of a collapse in the banking sector. He even says that "Goodwin deserved to be a pariah" when he later refused to reduce his pension payments after being forced to resign.
Mr Darling accuses Andy Hornby, the former chief executive of HBOS, of "looking like he was about to explode" when confronted with the gravity of the crisis that had developed under his leadership. Mr Darling writes: "My worry was that they [the bankers] were so arrogant and stupid that they might bring us all down."
He also protests that bank chiefs uniformly showed a shocking ingratitude for the massive rescue package that kept their businesses afloat.
Mr Darling blames Sir Mervyn King, the Governor of the Bank of England, and Adair Turner, the head of the Financial Services Authority, for their part in failing to avert the crisis. Earlier this year Mr Darling disclosed that people were only two hours away from being unable to withdraw money from British banks during the crisis in October 2008.
He said the near-collapse of RBS would have spread quickly to other banks if the government had not rushed out an emergency rescue package. "We were at the stage where in a very short period of time, one of the world's biggest banks would have to shut the door and switch off the electricity," he told The Independent. His portrayal of Gordon Brown's premiership in his book, Back from the Brink: 1000 days at No 11, which is published next week, has caused a headache for the current Labour leadership.
According to Labour Uncut, he claims that Mr Brown's closest lieutenant, Ed Balls, ran a parallel Treasury operation within Whitehall while Mr Darling was Chancellor.
Yesterday attempts by Ed Miliband, the Labour leader, to focus on the state of the economy were disrupted by Mr Darling's claims. Asked about the alleged activities of Mr Balls, now the shadow Chancellor, during the last Labour government, Mr Miliband replied: "I certainly didn't see that." He told Sky News: "Alistair's got a perfect right to write his memoirs and talk about his reflections on his time in office, and I'm sure they will be interesting for people. But the important thing for me to do, which I'm going to do, is talk about the needs of the economy going forward."
Mr Balls said he had opposed Mr Brown's plan – confirmed by the memoirs – to sack Mr Darling as Chancellor and put him in the job. "I thought that was the wrong plan. I thought changing the Chancellor in 2009 was the wrong decision. I wanted to stay in the department as Secretary of State for children, schools and families – but that is history," Mr Balls said.
So, who leaked Darling's book?
A question intriguing Westminster yesterday is who leaked the Alistair Darling memoirs, and why? The culprit certainly did not do it for money, or they would have leaked to a wealthier outlet than the Labour Uncut website.
There are substantial sums involved. The publishers, Atlantic Books, agreed to pay Mr Darling an advance of £75,000, obviously expecting they would get their money back by selling rights to The Sunday Times, which was due to begin serialisation this weekend. But the mighty Murdoch empire has been scooped by a penniless website.
The Sunday Times must be considering whether to cancel its contract with Atlantic Books, or beat the price down. This has happened to other deals when a confidentiality agreement has been breached. Either the newspaper or the publisher and author, or all three, are worse off because of a leak.
The conspiracy theory is that the mystery leaker is one of Darling's enemies, who wanted to blunt the impact of his memoirs. But how could someone ill-disposed towards the ex-Chancellor have got hold of a copy of his memoirs? What seems more likely is that someone involved was careless, or could not resist the temptation to share the secret.
Andy McSmithReuse content