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
    +1

    Comment number 124.

    Closed for comments. Hic

  • rate this
    +1

    Comment number 123.

    116. Paul Jones
    "Hopefully he will look at encouraging some appreciation of Sterling."
    ~
    You're living in a dream-world, he'll do what Goldman want him to do, more transfer of wealth to the bankers via 'printing'. You haven't a clue.

  • rate this
    -1

    Comment number 122.

    If he gets results that improve the awful fiscal mess our country is in after the La La Labour fiasco years, it will be money well spent.
    He is very well regarded world wide as one, if not the best person to govern the bank of any nation.
    I really hope he lives up to his reputation. If he does we have a bargain.
    Trots, this is the real world, get back to studying, one day you will be a grown up

  • rate this
    +1

    Comment number 121.

    Remuneration package modesty needed, so we give a whopping rise to the man responsible for regulating the City and then expect him to preach moderation.

    Average families strive hard to meet mortgage payments of £500-1000 a month, never mind nearly £5,000 a week.

    Hard to believe that HMTreasury Select C'ttee & BoE NEDs have not taken tougher stance on this. Governance as crisis cause?

  • rate this
    +2

    Comment number 120.

    #118.Publisher
    "Hey, why didn't you apply?"

    I would, but I don't think Osborne can afford me. I'd have demanded an even bigger package than Carney got.

  • rate this
    +3

    Comment number 119.

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

    But according to Boris London is the centre of the universe so how will his lifestyle be worse?. Still don't forget we are all in this together.

    Lets hope he is not as useless as Mervyn King.

  • rate this
    -1

    Comment number 118.

    Hey, why didn't you apply? Seriously why not if it is that easy and anyone can do it? It can't be any more difficult that writing your opinion on a BBC website surely?

  • rate this
    +3

    Comment number 117.

    Less concerned about his salary, far more concerned about a Goldmann Sachs bankers running the economy of yet another major European power. Fresh from conquering Italy without firing a shot, and from raping Greece, now they have one of their men running the UK too.

  • rate this
    0

    Comment number 116.

    Hopefully he will look at encouraging some appreciation of Sterling. This has not had the rebalancing that the BoE thought. Some appreciation will help keep a lid on UK inflation and encourage real growth in consumer consumption. even a little will help. UK industry has shown that it can compete on quality.
    A 'new broom' may help lift the gloom the present BoE'.

  • rate this
    -5

    Comment number 115.

    #105.davidbrent
    "Another example of the 1% lording it over the 99%"

    Well, I thought Obama's demagoguery had snake-charmed only the US. But the politics of envy are alive and well in the old country. And, Robert, you've done a good job stirring it up.

    Why not give the job to a, ahem, "pleb" & pay peanuts. He'll touch his (baseball) cap; say, "yessir!"; & you'll save a small fortune.

  • Comment number 114.

    All this user's posts have been removed.Why?

  • rate this
    -5

    Comment number 113.

    It would be wonderful to be a fly on the wall when he opens the books and See's the mess that labour and the coalition have left this country in. Do you think his first utterance might be 'ring for the mounties ? '

  • rate this
    -1

    Comment number 112.

    Either he wants the job or he doesn't. If he does, then he will appreciate that London is not Ottawa - and not just in terms of property prices.

    How about if we dock the cost of a transatlantic plane ticket from his pay every time he goes to the opera in London? That at least has a kind of symmetry about it.

  • rate this
    +2

    Comment number 111.

    Complete waste of money, all he is going to do is talk cac and chair a meeting once a month. We don't have an economy, we are about to enter a triple dip and no politicians have a brain to get us out o this mess. Can someone please explain how he will earn 3x the prime ministers salary???

  • rate this
    +14

    Comment number 110.

    #27 Family Guy
    "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."
    Don't feel so bad; he took his Msc and doctorate in Economics at Oxford after his undergrad at Harvard. Canadian brain - US-UK higher education. Oh, plus 13 years with Goldman Sachs. The Vampire Squid extends its tentacles yet again!

  • rate this
    0

    Comment number 109.

    WhyMe44

    'Not fit for purpose' is a permanent state existing only in contemporary politics, economics and finance, in the real world it either explodes, falls down or rots.

  • rate this
    +1

    Comment number 108.

    Has George O told him that child benefit is being axed for high earners? Maybe he'll just get another £250 a month (grossed up) to make up for it.

  • rate this
    +4

    Comment number 107.

    #97. WhyMe44

    My issue is that if I apply my analytical mind to the financial world all I can see are contradictions. And cans being kicked down the road.

    Apparently these circumstances are simply normal.

    If I see such circumstances occurring at work they are usually the harbinger of something nasty and expensive. With consequences.

    Bit like finance I fear...

  • rate this
    +2

    Comment number 106.

    Taxpayers' money again. Just like the other story of local councillors paying into a government pension scheme. How dare they. Will it be possible to make him redundant after 45 days? Or is that not the case because he is an immigrant in a British job.

  • rate this
    0

    Comment number 105.

    But is he bringing his family with him? If so, why can't he rent out or sell his Canadian home like any of us plebs would have to do? Anyway, I thought the Tories were bringing in a cap on housing benefit, or does that only apply to "scroungers" and not to the elites on £600K pa? Another example of the 1% lording it over the 99%.

 

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