Government under attack for lack of trade unionist on Bank's board

THE GOVERNMENT was facing strong protests yesterday from Labour after failing to appoint a trade union director of the Bank of England for the first time since 1946. Gavin Laird, the engineers' leader, stepped down after eight years but was not replaced with another trade unionist.

City sources said it was almost certain that there were trade unionists on the list of nominations submitted by Eddie George, the Governor of the Bank, to the Government. But they were turned down by Downing Street.

Mr George suggests names and can express preferences, but the decision is for the Government. The decision to remove all union representation from the court of the Bank - the name for its board - was interpreted by Labour and trade unionists as a snub. But a Downing Street spokeswoman said: 'Members of the court are chosen on their merits, not necessarily by the organisation they represent.'

Mr Laird is understood to have wanted to step down after two four-year terms, although there are precedents for staying. Sir Adrian Cadbury, who also retired from the court, has been a director for 24 years and Sir David Scholey was appointed for a fourth four- year term.

Mr Laird, who was highly regarded in the Bank, and Sir Adrian, the expert on corporate governance, are to be replaced by Sir David Cooksey, chairman of the Audit Commission, and Sheila Masters, a partner at KPMG Peat Marwick.

Alistair Darling, Labour's City spokesman, demanded that the Government explain why it has departed from long-standing practice. He said: 'We believe that the governing body should represent all relevant industrial interests, as well as having representation throughout the whole country. Given its importance in policy formulation, the governing body should not be partisan or one-sided.'

Bifu, the banking union, said the decision was political and blamed the Prime Minister for the 'latest in a long line of moves by Conservative administrations to freeze trade unionists out of what have been traditionally tripartite bodies.'