Lord George: Governor who oversaw the Bank of England's move to independence
Tuesday 21 April 2009
In his 10 years as Governor of the Bank of England Lord George, known to all as Eddie, exercised sound judgement and enjoyed good luck, presiding as he did over a period of stability and growth.
Many men with his first name attract the nickname "Steady Eddie," as he did, but in his case it seemed particularly appropriate, given his reputation for keeping a calm hand on the tiller.
He served under both Conservative and Labour governments, though he established more of a personal rapport with the Tory Chancellor, Kenneth Clarke, than with Gordon Brown, whom he described as complicated and reserved. He spent more than 40 years at the Bank of England, undoubtedly increasing its domestic and international standing during his decade at the top before his retirement in 2003.
His career left two major unanswered questions: whether he could have foreseen the present huge financial crisis, and whether, once the storm broke, he could have more skilfully guided Britain's response to it. Eddie George is generally credited with dealing deftly with the various crises that arrived during his term, such as the collapse of Barings Bank. But of course he never encountered anything on the scale of today's crunch. He told a conference: "I used to be Bank of England Governor and I'm rather glad that I'm not today."
His nickname, his chain-smoking and a certain reputation for informality set him apart from the breed of double-barrelled bankers. He was occasionally thought distant – unsurprisingly, after four decades in the rarified atmosphere of Threadneedle Street – but never accused of haughtiness.
Edward Alan John George was however educated at the top end of the market. The son of a Post Office clerk, he attended Dulwich College before taking a second-class degree in economics at Emmanuel College, Cambridge. He went straight from Cambridge to the Bank: it was said he had impressed one of its staff with his prowess at bridge.
His career in the institution took him to the Soviet Union, Switzerland and the United States as he made his way up through the ranks. John Major liked the look of him, and he was appointed Governor in 1993. As The Independent put it at the time: "Out goes the Tory grandee, Robin Leigh-Pemberton, the man who looks and sounds like a film director's idea of someone who is big in the City but who actually does not carry any real power. In comes another of the new meritocrats who under John Major really do run the country, and who know it is their intelligence and persuasiveness that give them their authority, not the fact that they make speeches at City dinners."
His key governmental relationship was with Chancellor Ken Clarke, the minutes of their good-natured jousts being published and becoming known as "The Ken and Eddie Show". Their differences tended to be over details rather than fundamentals. Clarke said of him yesterday: "I got to know him quite well privately. He was a delightful man – it's very unlikely he had an enemy. He was a very wise head with a very calm temperament."
Giving his opinions of Clarke and his successor, Gordon Brown, George said: "Ken Clarke, he was a very open person. We could disagree but then go and have a drink. Gordon Brown was a much more complicated character, he's quite reserved until you get to know him. But we had a very good relationship develop."
There was much talk that Brown would have preferred to see someone else at the helm of the Bank of England, but in the event George was re-appointed for a second term. He was delighted when one of the first acts of the new Blair administration was to hand over control of interest rates to the Bank, giving it a measure of independence that was described as historic. He was dismayed, however, when Brown's Treasury subsequently removed much of his institution's supervisory role over the banking system. George is said to have contemplated resignation, but decided against it. Though he did not generally trumpet his opinions in the public domain, George was known for his emphasis on keeping inflation down, and was regarded as a euro-sceptic in terms of staying away from the euro.
With hindsight, given the financial calamities of the last year, he presided over what now looks like a golden era in the UK's economy, with almost constant growth and, in appearance at least, great stability. But perhaps, it has been said, he could have deployed some of his legendary calmness to calm the consumer boom.
Although he was never a man to lose his cool in public, one who worked with him within the Bank reported that he had "a short fuse," particularly when he believed the integrity of the institution was under attack.
He also possessed, according to the same person, "a remarkable generosity of spirit and a willingness to make an effort for people without any expectation of a return, other than the satisfaction of doing the right, or rather the kind, thing."
Once, under questioning, he admitted he did not know the price of a pint of milk. Perhaps slightly endearingly, he confessed that like many others involved in high finance, ministers and officials alike, the economic workings of his own household were beyond him. "I'm hopeless," he said. One of his favourite jokes, which went down well at conferences, was to proclaim solemnly: "There are three types of economist: those who can count and those who can't."
After his retirement he moved to Cornwall, playing a part in the local community while taking directorships in a number of major concerns in banking, business and property.
Summing him up, Will Hutton of the Work Foundation said: "He was a breath of fresh air. He was a complete professional, very approachable, a very good man. His particular pride was that he was the governor who navigated the bank to independence."
Edward Alan John George, banker: born 11 September 1938; joined Bank of England, 1962; Deputy Chief Cashier, 1977-80; Assistant Director (Gilt Edged Division), 1980-82; Executive Director, 1982-90; Deputy Governor, 1990-93; Governor, 1993-2003; GBE 2000; created Baron George of St Tudy in the County of Cornwall, 2004; married 1962 Clarice Williams (one son, two daughters); died 18 April 2009.
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