History suggests Mark Carney's real test may come with a new government
At the start the new Governor will have Number 10 on side, writes Sean O’Grady
Mark Carney has the advantage of having been chosen by the incumbent administration. He will thus follow some successful predecessors; Eddie George, for example, was picked by the Major government and enjoyed a famously combative but respectful four-year partnership with Chancellor Ken Clarke.
Likewise, Margaret Thatcher favoured the elegant presence of Robin Leigh-Pemberton, formerly of National Westminster: not precisely “one of us” but not the argumentative type either. Before him, the Labour government in the 1960s turned to a Bank lifer, Leslie O’Brien, who, by all accounts, was the most popular of governors with the staff, possibly barring Mr George. As chief cashier, Mr O’Brien had his signature on the pound notes his political masters did so much to devalue. He didn’t seem to mind too much.
Times change though, and the governorship, for all the talk of political independence, is a deeply political (with a small p) role. One day Mr Carney will face the challenge of Ed Balls, a man who may have been part of the group around Gordon Brown which, in 2008, paused before reappointing Mervyn King for a second term (or so the gossip has it).
Mr Carney is unlikely though to be threatened by a prime minister Miliband prepared to “go back to the electorate for a mandate giving me full power to handle the crisis”, as Harold Wilson had to tell Lord Cromer when he as Governor questioned government policy. Wilson believed Cromer was a spy for the leader of the opposition, Ted Heath, and a closet Tory. He sacked Cromer as soon as he could. Five years later Heath, as PM, gave Cromer the plum job of Ambassador to Washington.
One wonders what Mr Carney, from the New World, will make of the Bank’s olde worlde customs; door keepers in pink tailcoats and top hats; the impressive en-suite thunderbox in the Governor’s “parlour”; the deeply hierarchical structure. Starting with the bruised egos at the top, it may not be that easy for him to fit in.
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