Does Mark Carney really deserve his reputation as a super-banker?

The new Bank of England governor shouldn't be given so much credit for Canada's economic success.

Super-banker Mark Carney negotiated an impressive 30 per cent increase in remuneration, in the form of pension contributions, providing him with a total of £624,000 a year for the Bank of England job. This was not agreed by the remuneration committee but was negotiated by the Treasury (George Osborne) and agreed by the bank’s non-executive directors.

If I had a time machine, I’d go back to 1938 in Cleveland, Ohio, and be in the room when Joe Shuster created comic book hero Superman. I don’t have a time machine, but I was in London in November 2012 when super-banker Mark Carney was invented. So since we’re all having to put our hands in our pockets and pay this man his extravagant salary, maybe we should dispel a few myths before going any further. Gushing Osborne describes him as an "outstanding candidate" in the press release. He loves Carney for "avoiding big bail outs and securing growth." So is that what super-banker really did?

Canada has always had a conservative banking industry and its banks were not over-exposed on entering the credit crunch. The country avoided the crisis in every way except for being the neighbour of the USA, which did cause a short term shock. Carney arrived at the Bank of Canada in February 2008, when the world crisis was already in full swing. It would be impossible for him to have implemented policy that retrospectively saved Canada from turmoil. He was simply there when nothing happened and is happy for people to believe he is a genius as a result.

As for Osborne’s comment on "securing growth"? The fact is that countries like Canada and Australia are rich in resources at a time when the expansion of China has created massive demand for them. Carney didn’t arrange for the rise of China, although if someone had attributed it to him, you can bet he’d allow the myth to perpetuate.

For Canada, the last five years have been so benign that Carney could have turned up to work and played ping pong all day. Yet, here we are, pouring praise on him. We know how Alastair Darling and Gordon Brown would respond to a major financial crisis, because they were there, for good or ill. We don’t know how this guy would be in a crisis, because he’s never been in one. Yet he’s a genius, according to George Osborne.

Osborne has returned regulation to the Bank of England, in the bizarre belief that it can do a better job. This obviously ignores BCCI and Barings. Carney is supposedly qualified as a regulator as he has private banking experience at Goldman Sachs. However, it seems that he advised Russian on their 1998 financial crisis while Goldman was simultaneously betting against the country's ability to repay its debt. This bloke doesn’t know what’s happening right under his own nose, yet he’s in charge of London?

The US has much more experience of capitalism than us, and they always, rightly, have a lawyer in charge of regulation. In a recent TV interview Adair Turner, another economist, didn’t know whether Libor cheating would constitute fraud. He was in charge of City regulation at the time. Yet here we have another economist being put in charge of regulation, when the job should go to a lawyer.

For a central banker he does at least have a very smart suit. Maybe that’s why we’re paying him an extra £144,000 of our money each year. Let’s look on the bright side, George Clooney would have wanted even more.

Dan McCurry is a photographer in east London and a Labour activist. He is a former chair of the Bow Labour Party.

The new governor of the Bank of England, Mark Carney, who previously served as the head of the Bank of Canada. Photograph: Getty Images.

Dan McCurry  is a photographer in east London and a Labour activist. He is a former chair of the Bow Labour Party.

Photo: Getty
Show Hide image

PMQs review: Jeremy Corbyn prompts Tory outrage as he blames Grenfell Tower fire on austerity

To Conservative cries of "shame on you!", the Labour leader warned that "we all pay a price in public safety" for spending cuts.

A fortnight after the Grenfell Tower fire erupted, the tragedy continues to cast a shadow over British politics. Rather than probing Theresa May on the DUP deal, Jeremy Corbyn asked a series of forensic questions on the incident, in which at least 79 people are confirmed to have died.

In the first PMQs of the new parliament, May revealed that the number of buildings that had failed fire safety tests had risen to 120 (a 100 per cent failure rate) and that the cladding used on Grenfell Tower was "non-compliant" with building regulations (Corbyn had asked whether it was "legal").

After several factual questions, the Labour leader rose to his political argument. To cries of "shame on you!" from Tory MPs, he warned that local authority cuts of 40 per cent meant "we all pay a price in public safety". Corbyn added: “What the tragedy of Grenfell Tower has exposed is the disastrous effects of austerity. The disregard for working-class communities, the terrible consequences of deregulation and cutting corners." Corbyn noted that 11,000 firefighters had been cut and that the public sector pay cap (which Labour has tabled a Queen's Speech amendment against) was hindering recruitment. "This disaster must be a wake-up call," he concluded.

But May, who fared better than many expected, had a ready retort. "The cladding of tower blocks did not start under this government, it did not start under the previous coalition governments, the cladding of tower blocks began under the Blair government," she said. “In 2005 it was a Labour government that introduced the regulatory reform fire safety order which changed the requirements to inspect a building on fire safety from the local fire authority to a 'responsible person'." In this regard, however, Corbyn's lack of frontbench experience is a virtue – no action by the last Labour government can be pinned on him. 

Whether or not the Conservatives accept the link between Grenfell and austerity, their reluctance to defend continued cuts shows an awareness of how politically vulnerable they have become (No10 has announced that the public sector pay cap is under review).

Though Tory MP Philip Davies accused May of having an "aversion" to policies "that might be popular with the public" (he demanded the abolition of the 0.7 per cent foreign aid target), there was little dissent from the backbenches – reflecting the new consensus that the Prime Minister is safe (in the absence of an attractive alternative).

And May, whose jokes sometimes fall painfully flat, was able to accuse Corbyn of saying "one thing to the many and another thing to the few" in reference to his alleged Trident comments to Glastonbury festival founder Michael Eavis. But the Labour leader, no longer looking fearfully over his shoulder, displayed his increased authority today. Though the Conservatives may jeer him, the lingering fear in Tory minds is that they and the country are on divergent paths. 

George Eaton is political editor of the New Statesman.

0800 7318496