Former Chancellor Alistair Darling on the eurozone crisis, consumer confidence and why retailers should get involved in the Scottish independence debate.

What has to happen to bring the eurozone crisis to an end?

The three things are: sort out Greece once and for all in a way that shows there’s light at the end of the tunnel; sort out the banks; and think about the policies which are strangling growth.

Critically, they [European leaders] have not increased the size of the rescue funding. It’s not nearly enough if you take into account Italy and Spain. People need to see there’s enough ammo to deal with this.

But even if they clean up the banks, as long as they pursue policies of austerity they’re locking these countries into a spiral of decline. They’re making the same mistakes as in the 1930s.

Does what’s happening there really matter to the UK?

Until the Eurozone crisis is resolved it will be a dark cloud over our economy too. It’s such a big trading bloc. The failure of the eurozone to get over this – and they still haven’t – is costing us dear indeed.

How do you see things playing out for retailers in tough economic conditions?

If you look at the retail world, what’s holding things back is a lack of confidence.

In 2010 the economy was growing. I understand that an incoming Government has to differentiate itself and introduce its own policies. But confidence is trashed.

There are more cuts to come, and if growth doesn’t resume it will force the Chancellor to do more cutting. If people’s income is squeezed they spend less – it’s self-fulfilling.

To get confidence going again you need signs that the Government is putting the economy in the right direction.

The Barclays controversy won’t help, will it?

Another week, another scandal. We need to sort this out quickly. It’s not in the UK’s interest to have a damaged Barclays.

The key thing is you need a functioning banking system to make businesses work. If we see more quantitative easing it’s got to get out into the high street – it’s no good sitting in a bank’s vaults.

You’re leading the campaign against Scottish independence. Why would it be a bad thing and what are the implications for retailers?

I think we’re better off together. As far as business is concerned we benefit from a single market, one currency, the same financial regulations, health and safety, labelling and food hygiene rules. There’s a common regime.

I understand why people in business say their job is to do the best for shareholders but it’s interesting that polling shows people believe businessmen. I’d encourage them to speak up and not leave it to anybody else.