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 Images
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Why are boundary changes bad for Labour?

New boundaries, a smaller House of Commons and the shift to individual electoral registration all tilt the electoral battlefield further towards the Conservatives. Why?

The government has confirmed it will push ahead with plans to reduce the House of Commons to 600 seats from 650.  Why is that such bad news for the Labour Party? 

The damage is twofold. The switch to individual electoral registration will hurt Labour more than its rivals. . Constituency boundaries in Britain are drawn on registered electors, not by population - the average seat has around 70,000 voters but a population of 90,000, although there are significant variations within that. On the whole, at present, Labour MPs tend to have seats with fewer voters than their Conservative counterparts. These changes were halted by the Liberal Democrats in the coalition years but are now back on course.

The new, 600-member constituencies will all but eliminate those variations on mainland Britain, although the Isle of Wight, and the Scottish island constituencies will remain special cases. The net effect will be to reduce the number of Labour seats - and to make the remaining seats more marginal. (Of the 50 seats that would have been eradicated had the 2013 review taken place, 35 were held by Labour, including deputy leader Tom Watson's seat of West Bromwich East.)

Why will Labour seats become more marginal? For the most part, as seats expand, they will take on increasing numbers of suburban and rural voters, who tend to vote Conservative. The city of Leicester is a good example: currently the city sends three Labour MPs to Westminster, each with large majorities. Under boundary changes, all three could become more marginal as they take on more wards from the surrounding county. Liz Kendall's Leicester West seat is likely to have a particularly large influx of Tory voters, turning the seat - a Labour stronghold since 1945 - into a marginal. 

The pattern is fairly consistent throughout the United Kingdom - Labour safe seats either vanishing or becoming marginal or even Tory seats. On Merseyside, three seats - Frank Field's Birkenhead, a Labour seat since 1950, and two marginal Labour held seats, Wirral South and Wirral West - will become two: a safe Labour seat, and a safe Conservative seat on the Wirral. Lillian Greenwood, the Shadow Transport Secretary, would see her Nottingham seat take more of the Nottinghamshire countryside, becoming a Conservative-held marginal. 

The traffic - at least in the 2013 review - was not entirely one-way. Jane Ellison, the Tory MP for Battersea, would find herself fighting a seat with a notional Labour majority of just under 3,000, as opposed to her current majority of close to 8,000. 

But the net effect of the boundary review and the shrinking of the size of the House of Commons would be to the advantage of the Conservatives. If the 2015 election had been held using the 2013 boundaries, the Tories would have a majority of 22 – and Labour would have just 216 seats against 232 now.

It may be, however, that Labour dodges a bullet – because while the boundary changes would have given the Conservatives a bigger majority, they would have significantly fewer MPs – down to 311 from 330, a loss of 19 members of Parliament. Although the whips are attempting to steady the nerves of backbenchers about the potential loss of their seats, that the number of Conservative MPs who face involuntary retirement due to boundary changes is bigger than the party’s parliamentary majority may force a U-Turn.

That said, Labour’s relatively weak electoral showing may calm jittery Tory MPs. Two months into Ed Miliband’s leadership, Labour averaged 39 per cent in the polls. They got 31 per cent of the vote in 2015. Two months into Tony Blair’s leadership, Labour were on 53 per cent of the vote. They got 43 per cent of the vote. A month and a half into Jeremy Corbyn’s leadership, Labour is on 31 per cent of the vote.  A Blair-style drop of ten points would see the Tories net 388 seats under the new boundaries, with Labour on 131. A smaller Miliband-style drop would give the Conservatives 364, and leave Labour with 153 MPs.  

On Labour’s current trajectory, Tory MPs who lose out due to boundary changes may feel comfortable in their chances of picking up a seat elsewhere. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.