Sir Mervyn King saved the best to last. We had sailed through the minor issues such as the crisis of world capitalism, the indefinite wait for a “sustainable” recovery, and the shady lobbying by government of regulators on behalf of the banks, when he produced his coup de grâce: Jane Austen’s head could soon be on the tenner.
At a stroke the Bank of England Governor lifted the black cloud that had threatened to darken his retirement: the outcry over Winston Churchill’s replacement of Elizabeth Fry on the £5 note. The revelation that the novelist was “waiting in the wings,” likely to take the place of Charles Darwin, meant that women would after all be represented in the nation’s wallets.
Not even a timely interjection from the Tory Andrea Leadsom suggesting that it would also be nice to have a woman on the Bank’s Monetary Policy Committee could undermine this cheerful note on which Sir Mervyn was ending what, with heroic understatement, the Treasury Select Committee chairman, Andrew Tyrie, called the “pretty bumpy” second half of the King decade. At one point in this farewell session, the Liberal Democrat John Thurso told him: “In the words of the famous Rolling Stones song, this is the last time.” It’s “could be the last time” actually; and an apter Stones lyric might be “You can’t always get what you want,” since Sir Mervyn’s call for another £25bn in quantitative easing has been consistently voted down by the MPC majority.
Why, the Tory David Ruffley asked, did he want this stimulus when he had said the recovery was “in sight”? Because the recovery is “too weak to be satisfactory” and would not be “sustainable” until supply side and other reforms were enacted here and elsewhere, he replied. Ah, “in sight” like the stars in the night sky – visible but possibly light years away.
Now that the Bank is the regulator again, it is, the chairman told him, a “much stronger institution” than when King arrived. Which it needs to be, given the lobbying by the banks to make it loosen its supervisory regime.
At first, Sir Mervyn seemed keener to complain about the “tremendous pressure” exerted by bankers on Nos 10 and 11 Downing Street. But had that been passed on? Tyrie repeatedly pressed him, like a prosecution advocate examining an over-cautious witness. Had members of the Bank’s Prudential Regulation Authority been contacted by “politicians or officials at No 10 or No 11 with a view to making points on behalf of the banks? “At least one conversation took place…” Bingo. The gun, if not actually smoking, was strongly smelling of cordite.