Douglas Carswell's Blog

Next Governor of the Bank of England? King's successor needs a Commons vote

Labour MP, John McDonnell, has just had a very good idea. 

He is planning on introducing a Private Members Bill to ensure that the next Governor of the Bank of England only gets the job after they have been approved by Parliament. 

Under the current system, the next Governor is handed the role on the say-so of the Chancellor. The McDonnell Bill would mean a Commons confirmation hearing first.

Why is this vital? 

The Governor is an immensely powerful official, taking economic decisions that affect the lives of millions. There ought to be some democratic oversight over who gets the job.

It is not as if the incumbent Governor, Mervyn King, has done a brilliant job, is it? He presided over a gargantuan credit boom, followed by bust. Despite today’s welcome fall in inflation, it is many years since the Bank of England met its inflation target. And far from solving the financial crisis, the Bank’s policy of print-money-and-pray economics is storing up more trouble for the future.

We know, too, that the Chancellor helped in the appointment of Christine Lagarde to head up the IMF. How did that work out?  

A bit like putting the debtor in charge of the bank, some might say.   All the more reason to insist on a Commons vote before the Chancellor's preferred candidate gets the job.

Here are some suggested questions for any would-be successor to Mervyn King: 

      1.       If credit easing works, where’s the credit?

      2.       If monetary stimulus makes the economy grow, where’s the economic growth?

      3.       Back in the late 1990s, were you in favour of Britain joining the Euro? If so, how can we trust your economic judgement about anything?

      4.       Do you agree with the Chancellor that we should keep on trying to bailout the Eurozone?

      5.       How does printing more money and giving it to banks solve a crisis caused by debt?

      6.       Inflation targets; if you fail to meet them, can we fire you?

      7.       In your view, does an economy grows because demand increases, or does demand increase because an economy grows?

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