ALISTAIR Darling is buzzing. It is Thursday evening and he has just got back to his House of Commons office having spent the last hour answering MPs' questions about the G20 summit.
Fifty minutes before that, he had been at the ExCeL Centre in London's Docklands, where some last-minute brokering by US President Barack Obama over the outing of tax havens ensured a deal had been signed. Two days earlier he had met Obama off Air Fo
rce One after being asked by Gordon Brown to do the honours at Stansted airport. Battle-hardened ministers such as the Chancellor would never for a moment admit openly that they were enjoying the drama that the financial crisis has brought into their lives. They don't need to; the buzz says it all.
Of his meeting with Obama, Darling is effusive. "He is a charming man," he declares, but adds: "I don't envy him. He has got a tremendous burden on his shoulders."
Darling knows of what he speaks. For more than a year now, he has been on a war footing. Pilloried last summer for talking down the country after warning that the world faced the worst global crisis in 60 years, his forecast has since been borne out. The iconic image of the last major financial crisis in the mid-1990s was that of Darling's predecessor Norman Lamont, pushing a lock of hair from his eyes, blinking and panicking in the TV lights. It is to Darling's credit that he has so far avoided any such catastrophe. Now, in the G20, he claims a new corner has been turned.
"The prospects are better (having reached a deal] because the prospects of world growth are better. It does make a difference," he insists. "I perfectly understand that if you are walking down the Lanark Road tonight and you've just seen this on the telly, you're thinking, 'What difference does it make?' It does make a difference."
There are three reasons, he argues: the pledge to keep supporting the G20 economies; the commitment to clean up the banking sector; and the cash promised to the IMF to stabilise developing nations. The latter will hit home, he argues, because we increasingly rely on doing business with the developing world. "If you are making something in Glasgow or are providing insurance services in Edinburgh, that makes a difference. If these (developing] countries can't trade, then it costs jobs back home."
It wouldn't become this particular Chancellor to get carried away, however. As you would expect from an Edinburgh MP, there's both salt and sauce. "I'm still cautious," he says, when asked whether the green shoots of recovery are visible. With a thin self-deprecating smile, he adds: "It's a long time since anyone accused me of being exuberant." Isn't it the job of a Chancellor to start talking things up though? Confidence can be self-fulfilling after all. "It is also the job of a Chancellor to be realistic," he ripostes. "People… can see what is happening. They don't want false promises any more than they want someone to say everything is terrible. What we want is realism."
Perhaps for this reason Darling has now decided to ditch the wildly optimistic projections for recovery which he made last autumn. He claimed then that the UK economy would begin to recover in the second part of this year. Now he believes it will be "the turn of the year" before the green shoots return. In three weeks' time, at the next Budget, Darling will reveal whether this means he has to turn the spending tap off entirely. All Chancellors use Delphic language during this period, refusing to give away the details of the red box. But between the lines, it is clear that Darling is tightening his belt.
"I have to reach a judgment about what we need to do to support our economy and I have also got to reach a judgment about making sure that when we come through this we have got to live within our means," he says. "We have to show that, yes, we are keen to provide help now, but we have also got to show that we do realise we have got to live within our means."
Darling is proud of the fact that he is the only Finance Minister in the G20 who has publicly set out medium to long-term plans on how he intends to rein in his growing deficits.
Some might argue he has to, in order to reassure fretful markets, as public debt rockets past £1 trillion. He agrees with the Bank of England governor Mervyn King that he has to be "cautious" about extra spending. But leaving the door slightly ajar, he also points out that King had also declared some spending – for example on boosting jobs – might be justified. In other words, the cheque-book might not be locked away just yet.
So if the 'fightback' against recession has begun, has the Labour pre-election fightback begun as well?
He says: "My view is, whenever the election is, people will form a judgment on, yes, what we've done, but also essentially the choice, which will be the same as it has been for years, a Labour government or a Tory government.
"When you're in a position like this you will do things, and sometimes they don't work out and sometimes you need to do them better. But I think people will give Gordon a huge amount of credit and we need a single-minded determination to concentrate on getting through this and that is what will make a difference."
That, I think, was a 'yes'. A cautious 'yes' certainly, but – after last week – a wary optimism shows through.
