Jeremy Warner: MPC hawk out, Brown crony in

Outlook No one will ever admit it publicly, but the Government top brass has not been impressed by the Bank of England's handling of the economic crisis. Ministers believe the Monetary Policy Committee was too slow to act on interest rates and liquidity, and it is plain that even the Bank's plan of action on quantitative easing has created tension with the Treasury. It seems to have taken for ever to agree the terms of a policy that was announced in principle ages ago.

It is hard not to sense these frictions in the latest comings and goings on the MPC. Out goes the MPC's resident hawk, Tim Besley, who tellingly has decided not to seek reappointment when his term expires and who attracts the following barbed tribute from the Chancellor: "It is extremely important that the committee contains a range of experts that energetically put forward challenging analysis and views to help shape the debate." Talk about damning with faint praise.

As already announced, the only member of the MPC unarguably to have got it right about the seriousness of the encroaching economic storm, David Blanchflower, is also on his bike. He's to be replaced by one of Gordon Brown's cronies, the economist David Miles, whose only notable previous claim to fame is to have penned a now wholly irrelevant review for Mr Brown of the UK mortgage market.

It's always unfair to quote people's work back at them in the light of rad-ically changed circumstances, but that's not going to put me off. This is what Professor Miles had to say to the Chancellor in March 2003. "In many ways the UK mortgage market works well. It is a dynamic and innovative market. Competition is intense for new business; new products emerge at regular intervals... I believe the recommendations I make in this report have the potential to change the UK mortgage market and make it work better. This will be to the benefit of borrowers, lenders, other financial intermediaries and the savers whose funds are intermediated through the market". I could go on, but perhaps shouldn't intrude on private grief.