When he succeeded Gordon Brown as Chancellor of the Exchequer in 2007, Alistair Darling was expecting a relatively quiet time at the Treasury. In the event, he was plunged into the most severe financial crisis since the First World War. Yet Mr Darling came out of the nightmare with his reputation enhanced.
His 2008 prediction that the recession would be the worst in 60 years – which was initially rubbished – proved closer to the mark than those of other forecasters. The recapitalisation of the banks – in which Mr Darling had a major hand – stemmed the financial panic in Britain and was followed shortly after by other governments around world. His decision to cut the rate of VAT in order to support the economy was judged by the Institute for Fiscal Studies to have been an effective stimulus. But Mr Darling understood the need for medium-term budgetary discipline too. He fought a battle with Downing Street over the 2009 pre-Budget report, arguing that the former Government needed to do more to outline future spending cuts.
All that means Mr Darling's thoughts now on the economy and the banking system, which we report today, deserve a wide audience. Mr Darling knows the Treasury from the inside. So his view that officials there will be working on a "Plan B", to be used in the event that the economy crashes because of the Chancellor's ambitious deficit reduction strategy, is significant. It raises an important question: will Mr Osborne quash Treasury suggestions of an alternative fiscal course for his own political reasons?
Mr Darling's argument that the banking sector has not fully learned the lessons from the financial crisis – and that banks are still over-reliant on wholesale funding – is also accurate. This is intimately connected to the question of the sustainability of the national finances because it is doubtful whether the state could afford another banking crisis.
The Coalition will doubtless dismiss Mr Darling's intervention as the usual partisan Labour critique of its economic policy. But that would be a mistake. Mr Darling has been proven right too many times in the past for his warnings to be safely disregarded now.