The "overbearing tyranny" at the Bank of England

Blanchflower v King, Round Three

Round One, you may remember, in the very public row between Professor David "Danny" Blanchflower, a former independent member of the Bank of England's Monetary Policy Committee and the new weekly economics columnist here at the New Statesman, and Mervyn King, governor of the Bank of England and one-time hawk on interest rates, kicked off on the pages of this magazine last week. In an exclusive article for the Statesman to coincide with the first anniversary of the financial crash, Blanchflower claimed that his old boss on the MPC ruled the Bank of England with an "iron fist", crushed dissenting voices and encouraged the "tyranny of consensus".

Round Two commenced yesterday in front of the Treasury select committee, where the Bank of England governor was forced to defend himself against Blanchflower's attack. "You can decide for yourself whether I do or do not have this iron fist, but look at the voting record," he said. And, as my colleague George Eaton pointed out on his blog yesterday: "King repeated his claim that earlier cuts in interest rates would not have diminished the force of the financial crisis and argued that no one could have foreseen the size of the recession." He also attacked Blanchflower's decision to publish his insider account in the New Statesman as "unwise and not sensible", and said that "Danny's recollection of events does not coincide with mine".

Round Three has now kicked off in earnest, after I asked Professor Blanchflower this morning for his response to the governor's comments. "I guess my main reaction is to say that it is the role of an independent member to speak up in the interests of the British people," he told me. "I disagreed with the overbearing tyranny." He added: "People are too scared to speak up."

On the governor's claim that earlier rate cuts would have been pointless, the professor is scathing. "If, as King argues, cutting rates earlier would have done little, then I guess his view is that we do not need an MPC at all, as it is, according to his view, entirely powerless."

What about his decision to go public with criticisms of his former colleagues at the Bank, including his explosive article in the NS? Was it the right thing to do? "It's what the British people should expect from an independent member [of the MPC]," he said. "I realised the MPC had made a mistake that needed correcting, so I spoke up.

"With hindsight, it turns out I was right to do so."

Over to you, Mervyn . .

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.

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The final shortlist for Labour’s next general secretary is a victory to Corbyn

Drawing up a list of options that consist of your preferred candidate and a smack on the head is a very old Labour trick.

One thing that hasn't changed in the Labour party is that the hand that controls the shortlist controls the world. Labour's power brokers used that power very effectively yesterday in drawing up the shortlist for the party's next general secretary: in the red corner we have Jennie Formby, senior Unite official and the preferred candidate of the leader's office. And in the, uh, other red corner we have Christine Blower, former general secretary of the National Union of Teachers.

Drawing up a list of options that consist of your preferred candidate and a smack on the head is a very old Labour trick (as well as being a very old New Labour trick) and this one is a masterclass of the genre. While no Corbynsceptic will be able to fairly argue that Blower isn't qualified for the role, her long history in movements outwith Labour means that she will be an unpalatable choice for most Corbynsceptics on the party's ruling national executive.

Victory to Jeremy Corbyn, then? Well, it is a sign that the leader of the opposition's office is getting better at managing these internal battles. But it's also a sign that, for the moment, Corbynite hegemony doesn't look any more inclined to be consultative than what came before. (See also: the party's Brexit policy.)

There is a large dash of the old in Corbyn's new politics. And as far as Labour goes, whether you think that's a good thing or a bad thing speaks to the most interesting schism in that party: between those who see the promise of Corbynism largely in what it could do the country, and those who see it as a catalyst for real party change that looks likely to unused.

Stephen Bush is special correspondent at the New Statesman and the PSA's Journalist of the Year. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.