Financial crash could have been far worse for UK were it not for Alistair Darling
Even before Northern Rock collapsed and the financial crisis exploded, Alistair Darling was already wrangling with an unenviable inheritance as chancellor of the exchequer.
Not only was he having to follow in the footsteps of the longest-serving chancellor of modern times – a man who presided over an almost unprecedentedly long period of stability and growing prosperity – he was doing so under the shadow of that same man.
After years of waiting, in June 2007 Gordon Brown had finally taken over as prime minister, and he had little intention of allowing anyone else to meddle with the economic plans he had laid out in his time at the Treasury.
Most officials would have crumpled in the face of this task, but Darling was a consummate politician – a smooth, unshowy operator who rarely ruffled feathers, despite having led some of the most challenging departments in Whitehall.
He had been work and pensions secretary, transport secretary and trade secretary too.
Competent and capable, he was also, crucially, less cursed with ego than most of his counterparts.
And when he got the job it seemed quite likely that he would spend most of his time being overshadowed by the prime minister, but then, a couple of months in, Britain’s mortgage securitisation market froze.
Within a few weeks, Northern Rock was in big trouble.
By September, the high street lender was effectively finished, seeking emergency support from the Bank of England and triggering the first bank run since Victorian times.
Darling’s time in office would be defined by the financial crisis, by the collapse not just of Northern Rock but of other British banking icons, by the nationalisation of RBS and, more importantly still, the deep recession that followed.
This was a global financial crisis, but Britain, with its global banking system and strong dependence on the sector, was worse hit than most countries.
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Former chancellor Alistair Darling dies
The slump was deep and so too was the impact on Britain’s public finances.
Moreover, having managed and steered this system for more than a decade up until recently, there was no mistaking which politician was most responsible for Britain’s part in the malaise: the new PM.
Yet for most of his time in office Darling maintained his composure and attempted to clean up the mess without briefing about his predecessor’s part in it.
A scarred relationship with Gordon Brown
Tellingly, the moment that most scarred his relationship with Gordon Brown came when Darling warned that Britain was facing “the worst downturn in 60 years”.
While Darling suggested that crisis would be “more profound and long-lasting than people thought”, Brown believed (or wanted to believe) that it would all be over in six months.
There were furious briefings from “Gordon’s attack dogs”, as Darling later put it, suggesting that the chancellor had lost the plot. It was, Darling said, like the “forces of hell” had been deployed against him.
“I won’t deny,” he wrote in his memoirs some years later, “that this episode was deeply hurtful and that it shaped a difficult relationship for the rest of our term in office”.
The gentlemanly path
It was a telling moment in other respects. For it underlined what mattered most to Darling.
While Brown was desperate to avoid having to internalise or publicise the bad news facing the country, Darling was compelled to be honest.
While Brown would routinely use his press officials to brief against his opponents, Darling preferred to take the gentlemanly path.
But the rift that grew between No 10 and No 11 would in other respects prove a blessing to Alistair Darling. In the following years he grew in stature and independence.
No-one suggested in the months that ensued, as he implemented the tax cuts and then rises in the face of recession, that he wasn’t his own man.
And while it is hard to take much that is positive from this period in British history, it would arguably have been very different (and potentially far worse) had it not been for Alistair Darling.
Perhaps the most significant moment came when he resisted the pressure (including aggressive phone calls from the US Treasury Secretary Hank Paulson) for Barclays to take over Lehman Brothers as the American investment bank careered towards collapse.
How different Britain’s fate would have been had it absorbed Lehman’s toxic waste and instruments onto its balance sheet.
An elder statesman
After leaving office, Darling did much as he had while in office.
He tried to be the statesman. He led the Better Together campaign during the Scottish independence referendum.
He sat in the House of Lords until 2020. He did not shout from the side lines but very quickly became an elder statesman, respected and admired across political divides.
Perhaps his greatest legacy is something else, something quite intangible.
It is hard to think of many politicians who will be remembered with such affection – as a good man, a kind man.
His loss, so much earlier than expected, leaves British politics a sadder, somewhat less dignified place.
Some of the biggest US technology companies have pledged billions of pounds of investment to turbocharge Britain’s artificial intelligence (AI) industry, as the two countries announce a landmark technology deal.
Nvidia, Microsoft, Open AI and Google made a flurry of announcements to coincide with President Trump‘s state visit to the UK.
They include plans to build data centres and invest in AI research and engineering.
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Sir Keir Starmer described the agreement, which both leaders will sign over the coming days, as “a generational step change” in Britain’s relationship with the US.
The deal will see both countries cooperate on AI, quantum computing and nuclear energy, with investment in modular reactors revealed earlier this week.
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The prime minister said it was “shaping the futures of millions of people on both sides of the Atlantic, and delivering growth, security and opportunity up and down the country”.
The government said the deal would deliver thousands of jobs, with a new AI Growth Zone in the North East of England earmarked for 5,000 jobs.
The region will host a new data centre developed in partnership with ChatGPT developer OpenAI, the US chip giant Nvidia and the British data centre company Nscale. The UK government will supply energy for the project, which will be based in Blyth.
Jensen Huang, chief executive of Nvidia, who has previously drawn attention to Britain’s inadequate levels of digital infrastructure, said: “Today marks a historic chapter in US-United Kingdom technology collaboration.
“We are at the Big Bang of the AI era – and the United Kingdom stands in a Goldilocks position, where world-class talent, research and industry converge.”
Nvidia chief executive Jensen Huang. Pic: Reuters
The Blyth data centre is part of Stargate, Open AI’s infrastructure project to build large data centres across the US.
The company has also developed sites in Norway and the UAE. Nvidia, which provides the graphic processing chips (GPUs), expects to generate $20bn (£14.6bn) by the end of this year from “sovereign” deals with national governments over the coming years.
Sam Altman, OpenAI’s chief executive, said: “The UK has been a longstanding pioneer of AI, and is now home to world-class researchers, millions of ChatGPT users and a government that quickly recognised the potential of this technology.
“Stargate UK builds on this foundation to help accelerate scientific breakthroughs, improve productivity, and drive economic growth.”
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Microsoft also pledged £22bn, its largest ever investment in the UK, to expand data centres and construct the country’s largest AI supercomputer.
Meanwhile, Google owner Alphabet pledged £5bn to expand its data centres in Hertfordshire and fund its London-based subsidiary DeepMind, which uses AI to power cutting edge scientific research. The company was founded in Britain and acquired by Google in 2014.
Other investments include £1.5bn from AI cloud computing company CoreWeave and £1.4bn from Salesforce.
There are “no discussions around taxpayers’ money” to prop up Jaguar Land Rover’s (JLR) suppliers, according to the prime minister’s official spokesman, as the carmaker grapples a lengthening production shutdown following last month’s cyber attack.
JLR factories fell silent more than two weeks ago. While it is damaging for the company, it represents a perilous loss of business for the supply chain which has also been forced to send workers home.
Some have already lost their jobs.
Unions and the business and trade committee of MPs were among those to request the possibility of aid to prevent job losses and employers going bust as the disruption drags on.
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What happened?
It was revealed on 1 September that global production at JLR had been stopped following a cyber attack.
IT systems were taken offline by the company under efforts to limit penetration and damage.
The company appeared confident initially that manufacturing could resume but restart dates have been consistently put back.
What damage was done?
Jaguar Land Rover has said very little about the extent of the attack.
But it admitted last week that some data had been accessed. It gave no further details.
Who is to blame?
A criminal investigation is continuing.
A group of English-speaking hackers claimed responsibility for the JLR attack via a Telegram platform called Scattered Lapsus$ Hunters, an amalgamation of the names of hacking groups Scattered Spider, Lapsus$ and ShinyHunters.
Scattered Spider, a loose group of relatively young hackers, were behind the Co-Op, Harrods and M&S attacks earlier in the year.
It is widely believed that M&S paid a sum to regain control of its systems after it was targeted with ransomware though it has refused to confirm if this was the case.
How is this affecting JLR as a business?
The business was highly profitable last year but 2025 has seen new trade war challenges in addition to the cyber attack: File pic: Reuters
JLR typically produces about 1,000 vehicles a day.
Production staff are being paid but kept away from plants at Halewood on Merseyside, Solihull in the West Midlands, and its engine factory in Wolverhampton. It is the same story for workers at sites in Slovakia, China and India.
JLR revealed on Tuesday that production lines would now remain shut until at least 24 September.
David Bailey, professor of business economics at the Birmingham Business School, told the PA news agency: “The value of cars usually made at the sites means that around £1.7bn worth of vehicles will not have been produced, and I’d estimate that would have an initial impact of around £120m on profits.”
JLR achieved a pre-tax profit of £2.5bn for the financial year ending 31 March 2025, so should be able to absorb such a hit.
Sales and service operations continue as normal at its retail partners but the longer the disruption goes on, so do the risks to its inventories and bottom line.
Why does its supply chain need help?
JLR’s supply chain includes everything from components to paint. Pic: Reuters
This is the part of the operation that was always bound to suffer most in the event of a global JLR production shutdown.
No manufacturing means no need for parts.
The company usually depends on a ‘just in time’ supply chain to feed its factories and keep production lines running smoothly.
The Unite union has appealed for a COVID-style furlough scheme to prevent job losses and the risk of affected companies, often small or medium-sized firms, being forced out of business.
JLR’s operations are understood to directly support more than 100,000 jobs in the UK though that sum doubles through indirect roles.
The loss of any major supplier would risk further production delays once JLR’s IT systems are back online.
It is currently understood that the vast majority of directly affected workers remain in their jobs but have either been sent home or are on restricted tasks.
JLR suppliers Evtec, WHS Plastics, SurTec and OPmobility have had to temporarily lay off roughly 6,000 staff while a growing number of other firms are cutting workers, with temporary or contracted workers most likely to be affected.
What has the government said?
In addition to the remarks by the PM’s official spokesman, minister for industry Chris McDonald told Sky News: “We know this is a worrying time for those affected by this incident and our cyber experts are supporting JLR to help them resolve this issue as quickly as possible.
“I met the company today to discuss their plans to resolve this issue and get production started again, and we continue to discuss the impact on the supply chain.”
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