What exactly did the Bank of England governor tell Nick Clegg during the coalition talks?
Did the establishment ensure a Tory-led government?
By James Macintyre Published 28 July 2010 12:03
Back in May, I speculated in a piece about the breakdown of Labour-Lib Dem coalition talks, on whether "establishment figures" -- such as, say, the governor of the Bank of England, Mervyn King -- may have leaned on Nick Clegg, the Lib Dem leader, with a view to ensuring a Conservative-led government.
My punt came at a time when some rather odd incidents were occurring, such as a Facebook page with hundreds of supporters urging Clegg not to get into bed with the Tories mysteriously disappearing from the site. But I had no way of knowing for sure that King had spoken to Clegg.
This morning, at the Commons Treasury select committee hearing from where I send this, King has just admitted he did indeed speak to Clegg -- by phone -- but claims he told him nothing about the economy that was not in the public domain. King was being questioned by the Labour MP Chuka Umunna.
Clegg, meanwhile, maintains he found out things about the scale of problems in the economy that helped cause him to change his position on cuts to tackle the deficit.
What Clegg was told, and by whom, remain crucial pieces of information for anyone interested in not just how we ended up with the coalition we now have, but also in who runs Britain.
Latest tweets
More from New Statesman
- Tools and services:
- Polls
- Predictions
- Jobs
- Archive
- Magazine
- PDF edition
- RSS feeds
- Subscribe
- Special supplements
- Stockists

















22 comments
Charlieeeee--bbbooyy!!!!!!
What exactly is the Bank of England ? It is not a bank and it is not run by elected members of the government. F Why does it have such power and authority ?
I think we should be told.
http://disparatestraights.blogspot.com/
It was fairly obvious for months before the election that King wanted a change of government: his every public pronouncement was caged in terms that made that clear.
And if he was being so disloyal in public, what was he saying in private?
This Government is a farce. Rich people paying for power and only the rich will not suffer these Tory changes. We should have a change of Leaders for each party and a general election. Each day we hear more corruption amongst the Coalition government. Its a disgrace.
JMc
Many strange things have happened over the past couple of years regarding this particular issue.
One being tha Merv the Swerve still has a job and credibility after his moral hazard lecture met the reality of economic survival.
He was pretty second rate compared to EG when he started and experience has not improved him.
Another interesting issue is Dave the Rave's football allegiance, AV so I am told. Please note that this refers to Aston Villa and not a particular voting system.
When was this support for Aston Villa first announced to a sceptical world? He has previous claiming that he knows nothing and cares even less about the sport, a bit like economics in a way (dog boiler to the core) so when did he acquire a football team to support?
And what link does he have to Aston Villa in grubby, dusty Birmingham? He is going to get no social climbing points for his tilt at the landed gentry with MON's autograph.
Interesting that Merv the Swerve seems to share a love of the same team, would the two events be in any way be connected?
clegg was a Tory from the start, it didn't take King's influence. there was never a lib lab deal likely. so I agree with Sue.
Charles Kennedy - do something!
Presumably, if Clegg had been been presented with shocking new figures that made him change his mind, such figures would have been openly published by now (the Con-Dems would have no incentive not to publish them).
As far as I'm aware, the only things that have come to the fore is that we're borrowing less than was predicted and growth is better than predicted.
Clegg should give us the details of what supposedly changed his mind else people might think they never existed in the first place.
Further to my comment of 7 September 2010, the deprival of the Bank of England of its responsibility for the solvency of the banking system in 1998 was of considerable international significance in that it meant that the American based International Swaps and Derivatives Association could introduce Credit Default Swaps into the British financial system and then soon afterwards into the EEC financial system resulting in the Euro currency. The ISDA acquired supra national authority which nevertheless resulted in the American and European financial crises from 2006 onwards.
Merv has never hidden his dislike of Gordon Brown. I fully believe he influenced the out-come of the coalition talks.
Gordon and Darking should have dumped him when they had the chance in 2009.
James assumes that Nick Clegg was seriously considering the option of a lib-lab coalition, and therefore, might have been dissuaded by Mervin's silver tongue... but I believe that there was never any such wavering for Clegg. He is very much at home politically with the Cameroonians, and I would be very surprised if he has not got the exactly the election outcome that he had planned to have. More fertile ground than investigating the role of persuader to King, would be to ferret out the probable Cameron-Clegg negotiations that happened before the election.
Tony Blair in claiming to originate the idea of an independent Bank of England presumably includes depriving the Bank of England of its responsibility for preserving the solvency of the banking system.
i think i need a cup off coffee after reading EhtchTee rants and outbursts of foul language just make his point.
Clegg is so obviously a dissembler with the facts. I agree with other comments that the rich will be unlikely to suffer from the cuts. It is interesting that the Observer suggests that the Fawcett Society may challenge the austerity budget in the courts.
who does run britian , the libs , camron , clegg or the far right of the cons lead bye david davis?.
where are you james?
"I saw the governor of the Bank of England [Mervyn King] last week when I was in London and he told me whoever wins this election will be out of power for a whole generation because of how tough the fiscal austerity will have to be"
http://www.guardian.co.uk/business/2010/apr/29/mervyn-king-warns-electio... (Thursday 29 April 2010)
Congratulations to Agent Mervyn for successfully encouraging Clegg to team up with Cameron.
Don't you means 'ruins' Britain!
The BofE is responsible for monetary policy alone. If the Governor had been asked would some action to reduce the deficit right away be helpful to him in his task, he would have said, in the short term it would because it might help with debt yields. It is the right answer. It is the intepretation given these comments by leading Lib Dems which are inappropriate and exagerated.
Media discussion on the government of the country is conducted almost exclusively in terms of existing structures and personnel. You can guarantee, for example, that the likes of Mervyn King comes from a privileged background and has received an establishment education, so what then is the point of wondering what he may or may not have said to another of his ilk (Clegg) on the question of the economy? We know what our rulers are about - power and privilege.
Democracy is not rule by privilege. And until we free ourselves of the greed that privilege imparts and encourages in society as a whole, we will remain a divided, unjust and warlike people
im not sure if mervyn king was powerful enough to persuade clegg to go into the coalition, given the way clegg's strutting around like he was born for the job i dont think he needed much persuasion.
however, there are serious issues about the amount of power mervyn king has over monetary policy, and soon financial regulation, we must destroy this monster before it takes over completely...............
Post new comment