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 Article written by Robert Peston Robert Peston Economics editor

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  • rate this

    Comment number 104.

    Geoff Berry, Prudeboy & other engineers:

    To the optimist, the glass is half full.
    To the pessimist, the glass is half empty.
    To the engineer, the glass is twice as big as it needs to be.

  • rate this

    Comment number 103.

    That your chances of getting a mortgage and the value of your pension etc, depend so heavily on one bloke says an awful lot about the system. If it's not nonsense then it's a nightmare. No engineer would build a system so rigid that a collapse in one part brings the lot down. Fix the system, replacing the figurehead won't help.

  • rate this

    Comment number 102.

    Mr Carney will be the first governor of the Bank of England .

    Can't George find his way to the printing press.

  • rate this

    Comment number 101.

    WhyMe44 & prudeboy

    Me too, I'm a dirty one !

  • rate this

    Comment number 100.

    Despite being one of those annoying people who believe the majority of people are either paid well above or under their worth (before taking into account my other belief that one a human life is as precious as the next), I fail to see the problem.

    He is paid peanuts and has the potential (and the track record) to keep millions out of poverty.

    Money well spend - and I'm a thrifty one!

  • rate this

    Comment number 99.

    I would be quite happy to take up this post without the huge incentives and subsidies being paid. So why pay out more, just because it's alleged he's the best man for the job? Why not appoint me? I have so far predicted virtually all the economic outcomes - to the day - in several instances and that's well known among those around me. Thus proving I could do a better job than most so far doing it.

  • rate this

    Comment number 98.

    Just part of the Global gravy train for those at the top. What was wrong with the standard London allowance?
    As to the question of will he make a difference. I am sure his puppet master will think so. (Goldman Sachs).

  • rate this

    Comment number 97.

    prudeboy @ 95:


    And true.

    And grossly underrated
    And grossly underpaid.

    But rewarding!

  • rate this

    Comment number 96.

    Oh dear, Robert, you too seem to be playing the politics of envy.

    A housing allowance for one of the world's leading economic posts is not unreasonable. Not very different from top IMF and World Bank officials. Even BBC expatriate staff are given good living allowances.

    If this man can drag the sagging UK economy out of the gutter, he deserves all this and more.

  • rate this

    Comment number 95.

    #83. WhyMe44

    Careful now. Didn't you know that "engineer" is a dirty word?

    I try not to use it since folk simply have no idea what it means.

  • rate this

    Comment number 94.

    Can he fix it.?
    I doubt it,.. this contagion, started in the 80s has spread globally.
    The fear is that this person will initiate inflation in the UK, which will sacrifice the savings and pensions, for the benefit of the few in the square mile, continuing where his predecessor started.
    Encouraging debt and gambling whilst sacrificing savings is exactly where this crisis came from.

  • rate this

    Comment number 93.

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

    I thought it was the govt's intention to CAP housing benefit?

    Depends I suppose on WHOSE getting it?

  • rate this

    Comment number 92.

    Don't care what we pay him, or for what, so long as he shuts down those banks which profit through skulduggery, gambling, or downright criminality. Presumably, though, he will be paying tax in the UK on his salary and perks? And if not, why not? He has to be seen to be open and honest in his dealings with the Inland Revenue, or how can he hold others to account?

  • rate this

    Comment number 91.

    To put it bluntly, he needs to earn more than those he is regulating.

    With the UK population running at 62 million he can have my two pence per month.

    That would give him a salary close to £15m pa to regulate the craftiest bankers in the world - a bargain!

  • rate this

    Comment number 90.

    Canadian and club come to mind,

  • rate this

    Comment number 89.

    Would he not have come without it?

    "Mr Carney's package protects him from the kind of gyrations in the economy that it will be his role to temper."

    His pay does not seem to have any performance related element anyway.

  • rate this

    Comment number 88.

    If he turns out to be able to live up to the challenges that he will face, then the amount is really petty cash.

    By heck - he'll face some challenges.

    At this stage, it's hard to work out really if he is a genuine outsider / new broom or, actually just another old pal of the traditional vested interests.

  • rate this

    Comment number 87.

    A key appointment at a critical period in UK history, increase his sphere influence, I hope he is a winner and he will deserve every penny.

    Here is his 'hit list' for his first 60 days;-

    1,Quantify all UK banks potential toxic debts.

    2,Feasibilty of Prices and Incomes Policy.

    3, Absorb only the perfroming FSA scope, the rest scrap.

    4, Proposal for reform of UK banks.

  • rate this

    Comment number 86.

    Oh dear.
    We sent an ex MP off to an ex colony. Chick lit writer Bagshawe/Mench.

    And then an ex colony sends us this chap.

    What is this world coming to?

    In years to come folk will look back and say amazing that Berlesconi got elected again.

    It's the power of the media. 4th estate.

  • rate this

    Comment number 85.

    Robert Preston makes a very good point. Pity those of us who are on a fixed pension if Mr. Carney allows inflation to rise as has been muted in the press.


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