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The unelected King

So much for the governor of the independent Bank of England not straying into party politics.

Perhaps I owe Nick Clegg an apology. I was one of those commentators who mocked the Deputy Prime Minister when he insisted in June that his Damascene conversion to the need for deeper and faster cuts in public expenditure had been prompted in part by a post-election conversation with the governor of the Bank of England, Mervyn King. "He couldn't have been more emphatic," Clegg told the Observer. "He said, 'If you don't do this, then because of the deterioration of market conditions it will be even more painful to do it later.'"

The Bank of England governor, however, played down the significance of his phone call to the Lib Dem leader at a Treasury select committee hearing in July. "There was nothing I said in that conversation that was different from what I had said in public," he stated. "When I am needed to give advice, I try to make sure the advice I give is full square in private and in public."

Private talk

Case closed, then. Or maybe not. The treasure trove of US diplomatic cables released by the whistle-blowing website WikiLeaks has revealed that, in private, King had been pushing the Tories to formulate a much tougher deficit- reduction programme in the run-up to the general election. "In recent meetings with [Cameron and Osborne], he has pressed for details about how they plan to tackle the debt," the US ambassador to the UK, Louis Susman, noted in a classified cable to the US secretary of state, Hillary Clinton, after a meeting with the governor in February. According to King, wrote the ambassador, cutting the deficit would be the "greatest challenge" facing whichever party won the general election.

So much for the governor of the independent Bank of England not straying into party politics, staying out of macroeconomic policy-making and ensuring his advice is "full square in private and in public". I suppose we should not be too surprised. He may have been one of the 364 Keynesian economists who signed a letter to the Times in 1981, condemning Geoffrey Howe's "austerity" budget, but King has since become a deficit hawk and senior Labour figures have long suspected that he leans towards the Conservatives. In April 2009, on the eve of the G20 summit in London, he enraged Gordon Brown by warning against "significant fiscal expansion"; in June 2009, he attacked Alistair Darling over the "extraordinary" size of the deficit, telling MPs that the Budget should be returned to balance faster than the Treasury had planned.

Last month, a member of the Bank of England's Monetary Policy Committee (MPC) claimed that King's post-election support for the coalition government's programme of austerity had been "excessively political". Speaking in front of the Treasury select committee, Adam Posen said: "There was a difference of opinion at the MPC, in particular in the main meeting, over a particular paragraph in the [May inflation] report that was talking about the need for a particular speed with which to deal with the fiscal deficit." Kate Barker, another MPC member at the time, said she was also "extremely unhappy" at the level of support expressed by the Bank for the coalition's policy of "significant fiscal consolidation".

Hasn't King's position as governor of the Bank of England, on a £300,000 salary funded by the taxpayer, become untenable? In my view, his credibility as an economist and forecaster had already been undermined in 2007 and 2008 when he failed to recognise the scale of the financial crisis and allowed, in Northern Rock, the first run on a British bank since 1866. Now he has been exposed as an "excessively political" and interfering figure - both by Wiki­Leaks and by his own colleagues on the MPC. How can he continue as head of the nation's central bank, a role that demands political independence and impartiality?

It isn't just the Bank of England governor who seems to have overstepped the constitutional mark. A BBC documentary in June revealed that the cabinet secretary, Gus O'Donnell - nicknamed "God" by his civil service colleagues - advised Conservative and Liberal Democrat negotiators in their first meeting at the Cabinet Office to go for a "more com­prehensive agreement" than a Tory minority government, in order to introduce "tough measures" that would reassure the financial markets "on the Monday morning". (In fact, the FTSE was up on the morning of Monday 10 May, despite the ongoing and unfinished negotiations between the two parties.)

No mandate

It seems the conservative British establishment - so memorably identified and critiqued by the late Anthony Sampson in his 1962 book, Anatomy of Britain - is very much alive and well, in the form of overmighty and politicised civil servants such as the cabinet secretary and the governor of the Bank of England, despite 13 years of Labour rule. But I don't remember the British public voting for Mervyn King or Gus O'Donnell.

Nor, for that matter, do I remember the public voting for the biggest cuts to government spending since the Second World War. There is simply no democratic mandate for the coalition's austerity measures. On 6 May, voters were offered a clear choice between the Conservatives' pledge to eliminate the deficit over the course of the parliament, and the Labour and Lib Dem strategy to delay cuts in spending until the recovery was secure, with Labour pledging to cut the deficit in half by 2014. The Tories won 36 per cent of the vote; the more moderate Labour and Lib Dem position on deficit reduction had the backing of 52 per cent of voters. Little has changed in recent months: a Populus poll in September showed that just one in five voters (22 per cent) supported the coalition's plan to deal with the deficit by the next election, in just five years' time.

During the last election campaign, in April, Nick Clegg warned of "Greek-style unrest" on the streets of Britain if the Tories tried to "slash and burn" public services without a proper mandate. In recent weeks, his words have proved prophetic - and I suspect the student protests over tuition fees are just the beginning. There will be protests, strikes and sit-ins galore come 2011 and 2012. Perhaps the Deputy Prime Minister should have taken his own advice, rather than that of the unelected Mervyn King.

Mehdi Hasan is senior editor (politics) of the New Statesman.

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

This article first appeared in the 06 December 2010 issue of the New Statesman, Vietnam: the last battle

The Prime Minister still has questions to answer about his plans for Syria

Cameron needs a better plan for Syria than mere party-politicking, says Ian Lucas.

I was unfortunate enough to hear our Prime Minister discussing the vexed issue of military action in Syria on the Today programme yesterday. It was a shocking experience - David Cameron simply cannot resist trying to take party political advantage of an extremely serious crisis. It is quite clear that there are massive humanitarian, military and political issues at stake in Syria. A number of international and national powers including the United States and Russia are taking military action within Syria and David Cameron said in the broadest terms that he thought that the UK should do so too.

The questions then arise - what should we do, and why should we do it?

Let me make it clear that I do believe there are circumstances in which we should take military action - to assist in issues which either affect this country's national interest and defence, or which are so serious as to justify immediate action on humanitarian grounds. It is for the Prime Minister, if he believes that such circumstances are in place, to make the case.

The Prime Minister was severely shaken by the vote of the House of Commons to reject military action against President Assad in 2013. This was a military course which was decided upon in a very short time scale, in discussion with allies including France and the United States.

As we all know, Parliament, led by Ed Miliband’s Labour Opposition and supported by a significant number of Conservative MPs, voted against the Government’s proposals. David Cameron's reaction to that vote was one of immediate petulance. He ruled out military action, actually going beyond the position of most of his opponents. The proposed action against Assad action was stressed at the time by President Obama to be very limited in scope and directed specifically against the use of chemical weapons. It was not intended to lead to the political end of President Assad and no argument was made by the governments either in the United States or in the UK that this was an aim. What was proposed was short, sharp military action to deal specifically with the threat of chemical weapons. Following the vote in the House of Commons, there was an immediate reaction from both United States and France. I was an Opposition spokesman at the time, and at the beginning of the week, when the vote was taken, France was very strident in its support for military action. The House of Commons vote changed the position immediately and the language that was used by President Obama, by John Kerry and others .

The chemical weapons threat was the focus of negotiation and agreement, involving Russian foreign minister Sergei Lavrov and his connections with Syria.  The result was that Assad agreed to dispense with chemical weapons on a consensual basis and no military action took place.

David Cameron felt humiliated by this outcome and loses no opportunity to suggest that the decision was wrong.  He is determined that he should revisit the issue of bombing in Syria, though now action there has elided to action against Islamic State. He has delegated Michael Fallon to prepare the ground for a vote on military action in Parliament. Fallon is the most political of Defence Secretaries - before he became a minister he was regularly presented by the Conservative party as its attack dog against Labour. He gives me the impression of putting the Conservative Party’s interest, at all times, above the national interest. Nothing in his tenure at Defence has changed my view of him.

I was therefore very sceptical what when, in September, Fallon suggested that there should be briefings of members of Parliament to inform us of the latest position on Syria. It turns out that I was right - at the Conservative party conference, Mr Fallon has been referring to these briefings as part of the process that is changing minds in the House of Commons towards taking military action in Syria. He is doubtless taking his orders from the Prime Minister, who is determined to have a vote on taking part in military action in Syria, this time against Islamic State.  

If the Prime Minister wishes to have the support of the House of Commons for military action he needs to answer the following questions: 

What is the nature of the action that he proposes?

What additional impact would action by the UK have, above and beyond that undertaken by the United States and France?

What is the difference in principle between military action in Syria by the UK and military action in Syria by Russia?

What would be the humanitarian impact of such action?

What political steps would follow action and what political strategy does the government have to resolve the Syrian crisis?

The reality is that the United States, UK, France and other western powers have been hamstrung on Syria by their insistence Assad should go. This situation has continued for four years now and there is no end in sight.

The Prime Minister and his Defence Secretary have yet to convince me that additional military action in Syria, this time by the United Kingdom, would help to end Syria's agony and stem the human tragedy that is the refugee crisis engulfing the region and beyond. If the Prime Minister wishes to have support from across the House of Commons, he should start behaving like the Prime Minister of a nation with responsibilities on the United Nations Security Council and stop behaving like a party politician who seeks to extract political advantage from the most serious of international situations.

Ian Lucas is the Labour MP for Wrexham.