Business Outlook: Brown fails to shake the Bank's foundations

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The Independent Online
HAVE you heard the one about the Scotsman, the Irishman and the Welshman? Well, they've all just been appointed to the court of the Bank of England in an attempt by Gordon Brown, the Chancellor, to make Britain's newly independent monetary authority more representative of the regions. There's also a trade unionist - Bill Morris of the Transport and General Workers' Union - and, heaven forbid, a woman - Sheila McKechnie, director of the Consumers' Association.

In other respects, however, Mr Brown's long-heralded shake-up in the higher echelons of the Bank is far from radical. Eddie George is left in situ as Governor, though those darlings at the Treasury kept him sweating as long as they could, and the Chancellor has even reappointed two of the court members he could have replaced. My, it must be difficult to get the right people these days.

By some accounts, all this happened more by default than out of choice. Despite a long search, the Chancellor was unable to find an acceptable replacement for Mr George. Nor, amazingly, was it easy to find suitable candidates for the court, which ends up not so very different in its composition from the one New Labour inherited from the Tories. But then, we're all New Labour now, aren't we?

That said, Mr Brown seems to have got the judgement more or less right. This was probably not the right time to change the Governor, with delicate negotiations still to take place in Europe over Britain's relationship with the single currency. There will be plenty of opportunity for that later, since Mr George is widely expected to bow out gracefully before his second term is up.

Moreover, the choice of new appointments to the court is hard to challenge. In Bill Morris, the Bank gets one of the most accomplished new thinking unionists, while it would be impossible to find a chief executive of more upright quality and high moral values than Jim Stretton of Standard Life. Possibly more out of luck than design, the Chancellor has got his choices spot on.