Coffee House

Sir Mervyn King to Mark Carney: You’re Worth It!

25 June 2013

Sir Mervyn King held an emotional farewell with the Treasury Select Committee this morning ahead of his move from the Bank of England to the House of Lords. Committee chair Andrew Tyrie was as keen to recruit him as a supporter of banking reforms going through Parliament in the future as he was to grill the outgoing Governor: in fact, all the of the MPs on this often incisive committee were reasonably gentle with the man known as Merv the Swerv. As part of his farewell, he gave some advice to his successor which sounded a little bit like a L’Oréal advert:

‘Well, I have no intention of giving public advice, but if you really insist, really insist… it’s very simple: he should be himself. Governors change, it’s very important that each governor is true to themselves and that means acting and behaving in a different way than their predecessors. Everyone is different, and trying to fit into a mould doesn’t work. He must and I’m sure he will be be himself.’

But like all good L’Oréal adverts, the Governor couldn’t resist suggesting that his successor could carry on indulging in a few cheeky treats, like Quantitative Easing. He said:

‘The scale of asset purchases will have to be unwound and we have to return to normal conditions at some point. When that point is, I don’t know.’


He told David Ruffley that the recovery was ‘not sufficiently rapid to reduce my concern that we need more stimulus’.

He was even less cheery when talking about the power that the governor holds, saying that ‘even’ Mark Carney wouldn’t hold that much sway given he only has one vote. ‘I don’t believe that the governor as an individual is too powerful,’ he said:

‘I don’t think powers are vested in an individual. The idea that I can determine monetary policy myself is false. Even Carney will only be one individual. Members of these committees take their responsibilities very seriously.’

Does that mean that Mark Carney isn’t worth all the hype about the revolution in monetary policy, instant recovery and constant sunshine for the next five year that he’s been billed as bringing to the Bank? It will be difficult for the new Governor to live up to the expectations placed on him ahead of him starting his new job on Monday. But Tyrie finished the session by telling King that he left the Bank ‘a much stronger institution than you found it’. To the MPs today, at least, Merv really was worth it.

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  • Colin Forbes

    The idea that any of these people are ‘worth it’ is just laughable. Don’t forget that the Canadian Carney is coming in at a salary and benefits package well in excess (and i use the word advisedly) of the outgoing Governor. Osborne – and it is essentially his appointment – has gone very much over the top which makes a mockery of his much-trumpeted ‘austerity’ programme. Either he doesn’t know what it means and the Treasury can’t run to a copy of the Concise Oxford, or he is stupid. I wonder which? For a Chancellor of the Exchequer not to understand that he is not cutting public spending nor is he reducing the deficit when he persists in saying that he is is truly incomprehensible and shows that even an Eton education doesn’t make a posh boy good.
    The outgoing Governor has wilfully colluded with charlatans of all three parties and overseen a truly woeful time in the City. ‘Merv the Swerv’ might reflect on that while enjoying his taxpayer-funded, gold-plated, totally unjustified, pension.

    • Makroon

      This verbose old codger has had more “farewells” than Frank Sinatra.
      Central Bank governors should be obliged to swear a vow of silence – just look at the mayhem caused every time Bernanke decides to have one of his “to be, or not to be” moments.
      Attention seekers and wannabe celebs, the lot of them !

      • Daniel Maris

        Yep! Not impressed.

        I laughed the other day when some pundit was lauding King for have seen through the independence of the Bank of England…which became a model around the world – er yes…that all worked out fine didn’t it? No problems there… LOL

    • paulus

      Osbourne didn’t attend Eton.

      • Colin Forbes

        My mistake – it was St. Pauls. I’m glad someone is awake at the back! It doesn’t alter the point …. He did go to Oxford though (Magdalen College), so how about ‘ … even an Oxford education doesn’t make a posh boy good.’ (And, at the risk of being thought a pedant, it’s Osborne, nor Osbourne.)

  • telemachus

    He told David Ruffley that the recovery was ‘not sufficiently rapid to reduce my concern that we need more stimulus’.

    Of course it is not
    Osborne choked off what growth Brown had kindled when he began bungling the economy
    I look forward to Carney having some forthright imput into the Treasury to stimulate growth

    • HookesLaw

      The economy has not been bungled – its been saved.

      There are more people in employment than ever working more hours and this is despite a necessary cut in the bloated numbers of public sector workers employed by Brown in the name of his bogus growth.
      Browns bogus growth added to the national debt it did not pay it off. Britain’s problems are down to Brown’s bloated spending.

      • Colin Forbes

        Simple question – how many of those ’employed’ are in productive jobs? You know – actually making something, providing a service – in other words, adding value. You can take everyone in the public sector out of the equation – not one of them adds value to the economy. Then – tell me how many are left and whether there are more ‘than ever’ as you blithely assert.

        • Daniel Maris

          “You can take everyone in the public sector out of the equation – not one of them adds value to the economy.”

          What a silly comment. So motorway repair men don’t add value to the economy? The Royal Mail adds no value to the economy? Tourist attractions like Hampton Court add no value? Doctors fixing up workers and getting them back to work add no value?

          • Colin Forbes

            It’s actually not a silly comment at all. They’re all paid out of taxpayers’ money – so they’re a cost to the economy, not adding value back into it. Whereas a shop worker, selling things, is creating value – wealth, if you like – where it didn’t exist before.
            No one would argue that public sector workers aren’t necessary – well, some of them are: an increasing number are being shown to be completely unnecessary, such as the entire workforce of DfID and DCMS – – but no one with a decent grasp of economics would say that they ‘add value’. The examples you quote all get paid no matter what – whether there are potholes to fill, letters to deliver (increasingly not so), visitors to serve or patients needing ‘fixing up ‘ (not heard that one before!). And any attempt to reduce the workforce adducted to the public teat meets with howls of protest and derision.
            It’s a certain fact that, for the health of the nation, the public sector needs to be as small as possible. I’d advocate giving 40% of the civil service its marching orders (minus their gold plated pensions or redundancy payments). My bet is that the economy wouldn’t suffer at all.

            • Daniel Maris

              You might equally say that Marks and Spencer’s are completely dependent on the government – they can only trade successfully because we provide police to stop rioters stealing all their goods, we provide trading standards officers to stop people trading as M&S when they aren’t, we provide basic food hygiene standards that benefit M&S as a responsible trade etc etc.

              In terms of economics, “value” can really only refer to labour productivity. If you heal a sick worker and get him back to work you have improved labour productivity.

              Incidentally I hadn’t even begun to list the ways in which the public sector add to labour productivity. Teaching is another obvious area. You only have to look at poor countries around the world who don’t have free state education to see that they can’t add much value to labour productivity.

              You have provided no evidence that countries that spend per capita 40% less than we do on the public sector are wealthier than us. Do you have any such evidence?

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