Protecting the new governor's lifestyle

 
Mark Carney Mark Carney will take up his new post in July.

The Treasury offered Mark Carney a £250,000 annual accommodation allowance, on top of his £624,000 salary and cash in lieu of pension, because it did not see why his lifestyle should suffer from a move to London.

Currently governor of the Bank of Canada, Mr Carney, his English wife and four children live in a large family house a short distance from his office in Ottawa.

Apparently an equivalent home in London would cost around £2600 per week, which is the value of his new allowance after tax and national insurance.

Even so, even in the private sector, it is unusual to receive a housing subsidy on that scale.

And what may stir controversy is that Mr Carney's package protects him from the kind of gyrations in the economy that it will be his role to temper.

What is more, Mr Carney will be the first governor of the Bank of England not only to have the power to set interest rates but also to directly influence the supply of credit through the newly created Financial Policy Committee.

How would it play with people and media if he announces significant restrictions on the availability of mortgages in a housing boom, for example, when he would be wholly insulated from such tough policy announcements?

Little wonder that the non-executives on the court of the Bank of England have taken a couple of weeks to ratify the chunky housing payment which was offered to Mr Carney by the Treasury.

 
Robert Peston, economics editor Article written by Robert Peston Robert Peston Economics editor

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  • rate this
    +1

    Comment number 44.

    Mark Carney will get housing allowance @ $400,000 next year to help him cope with London's high living costs. Housing funds designed to let Carney have same standard of housing as he currently has in Ottawa, will be on top of Carney's already reported regular salary of $770,400 (£480,000) & cash in lieu of pension of $231,120 (£144,000) = just over $1 million altogether.
    Worth it? We'll see!

  • rate this
    +1

    Comment number 43.

    Mark Carney for the BoE and the UK remains better value for money than what Barclays is receiving by paying Hector Sants £3m, who failed as MD of the FSA, which is about to be relegated to the history books as an ineffective and incompetent Regulator! Sants cannot assure and guarantee Compliance anymore than an average staff member at Barclays could!!! Time to have a laugh!!!

  • rate this
    +1

    Comment number 42.

    I do not understand why UK would employ a competitor foreigner to head the BofE, especially for national security. Would China/Russia/USA employ a UK banker to head their central banks.

    He might have the power to improve UK economy, but he also has power to disadvantage it & advance others instead

    Around 60 million UK population & not one competant enough to head our central bank

  • rate this
    0

    Comment number 41.

    brookone @ 36...i dont think you have quite come to terms with the new truth since the GFc..that a porpoise or a dolphin would do as good a job..he is not the best talent..it doesn't matter what he does, he is just another squid.

  • rate this
    +1

    Comment number 40.

    For once I don't mind. Its peanuts and I think he may be just worth it.
    Its about a days operating cost of one jet fighter and a few bombs.

  • rate this
    0

    Comment number 39.

    Yes Carney has got himself a nice little earner. Hope he has protected his income by getting paid in Can $ so that he will not be affected by exchange controls and collapse of the GBP.

    No civil servant should earn more than 4 times the average wage!.
    More equal societies fare better!

  • rate this
    +1

    Comment number 38.

    I'm passed caring,it doesn't matter where he comes from,it doesn't really matter what his pay is.What matters is that he & the others on the short list are only interested in rebooting the system.A system that allows private banks to use national currencies to extened their own psuedo money(bank credit)
    Get some software engineers to create a national cashless payment system & cut the banks loose

  • rate this
    +2

    Comment number 37.

    I thought Housing Benefit was to be capped at 25k per year?

  • rate this
    0

    Comment number 36.

    It's amusing that so many object to executive remuneration packages, when I assume they want the best people to do the job, yet most are happy for footballers to be paid far higher packages for "kicking a ball about".

  • rate this
    -2

    Comment number 35.

    Am I to understand that Carney will decide interest rates on his own.

  • rate this
    0

    Comment number 34.

    At least he is a legal migrant.

  • rate this
    +1

    Comment number 33.

    Given his access to soft loans (BoE standard) he could afford to buy a property worth about £1.5M on a 15 year repayment mortgage on his £2.6K/wk.. Chances are signficant capital appreciation by the end when he could sell for say £2-3M. After finishing at BoE he simply rents it out. This way he then has 2 expensive properties courtesy of UK tax payers. Yes, I can see we're all in this together!

  • rate this
    0

    Comment number 32.

    19.1250

    "It isn't a very high package for a senior person"

    and perhaps there in a nutshell is why we are in such dire straits.

  • rate this
    +1

    Comment number 31.

    So, this means if Merv hadn't left the post, he would have received a pay increase from 300,000 to 480,000 plus a pension increase plus a living allowance of 250,000 less tax. this is an insult. I will do the job of not controlling inflation, printing funny money and looking like Herman Munster for only 100,000 a year. Moving to London is a step up.who even knows where Ottawa is?

  • rate this
    +16

    Comment number 30.

    Why does not he pay his own rent like we do? This way he can understand the impact of rent inflation on our income and UK growth.

  • rate this
    0

    Comment number 29.

    Some housing benefit that. Shirker should get proper job

  • rate this
    +3

    Comment number 28.

    "Because it did not see why his lifestyle should suffer from a move to London" - interesting example to set the nation, telling people that their lifestyle shouldn't suffer if their financial circumstances change due to an increased cost of living. Of course I'm sure the gentry deserve it, bless 'em *tugs forelock*

  • rate this
    +1

    Comment number 27.

    What a dreadful admission that with the supposedly finest universities in the world we could not produce a single British brain to do this job.

  • rate this
    +1

    Comment number 26.

    why the need to be extravigant with life styles if he is unhappy there is always a flight to canada, realy all this smells of hypocracy and unwarrented expence, next mp's will be asking the same and joe public foots the bill. over valued and over paid the whole system needs a reality check.

  • rate this
    +5

    Comment number 25.

    Perhaps the 'shock horror' should be directed at the fact that private rents and house prices have spiralled in London to the degree that £2600pm is pretty much par for the course for any decent house.

 

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