Protecting the new governor's lifestyle
- 19 December 2012
- From the section Business
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.