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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  • Comment number 324.

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

  • rate this
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    Comment number 323.

    298. Up2snuff
    "His biggest problem will be oversight of the banking industry ... It's one of our biggest earners"

    That's funny. To earn something implies wealth creation through useful labour, skill, ingenuity. What would the banking sector receive if it weren't for the £130 billion annual implicit subsidy from the UK taxpayer (Ref: BoE Financial Abstracts)?

  • rate this
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    Comment number 322.

    315.JustKBO

    I don't think it (National Maximum Income) would reduce tax receipts - that is the lie that is put about by paid lobbyists of the bankers etc.

    If you are against it you are saying that one man is worth more than 20 others - which is plainly ridiculous on so many levels.

    The present differentials are absurd.

    As to soccer: perhaps we would get some good native English players again!

  • rate this
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    Comment number 321.

    317. Up2snuff

    Your earlier question was how do we cap incomes - I told you one way (in 312) - via the Tax system - it is just another computation of all income over £250K is payable to the tax man.

    If you evade or avoid you lose your right of abode and all UK property rights - it has to have draconian sanctions as these are the group who will make huge efforts to evade paying.

  • rate this
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    Comment number 320.

    "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?"

    No, it depends on WHO'S getting it.

  • Comment number 319.

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

  • rate this
    0

    Comment number 318.

    @285.FauxGeordie

    "If he delivers he'll be worth every penny. Silence, begrudgers"
    And if he doesn't, he'll be fantastically rich.
    ---
    "Irrelevant. He already is"
    ----

    Thats a revealing comment


    He has to incentivised with vast sums of money because its the going rate - but it won't make any difference because he's already fabulously wealthy.

    They're just carving it up among themselves.....

  • rate this
    0

    Comment number 317.

    @301 prudeboy
    So you know a lot about banking and what it does and its place in the UK economy, then?

    @312 J_f_H
    And the rest of it ... ???? People fill in tax returns already!

  • rate this
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    Comment number 316.

    Why the concern over his salary & benefits when public money is squandered on the likes of Gary Lineker. A reported £2 million a year, but he does present match of the day..

  • rate this
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    Comment number 315.

    So John from Hendon an absolute maximum of 20 times average wage. Of course one immediate consequence of that is that it would immediately and significantly reduce the average wage. Maybe median would be better.

    And not only would that drive out all overseas footballers from the Premiership it might also drive out most professional English footballers. And vastly reduce the govts tax receipts.

  • rate this
    +1

    Comment number 314.

    Political_incorrect, if you really lived in Canada you would know that their banks were better regulated than those elsewhere and survived the GFC relatively unscathed. Carney deserves some credit for that.

    But we're still left with your boastful claim that you know lots of people better qualified than Carney.Who are they all?

  • rate this
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    Comment number 313.

    @JustKBO
    "The main thing that qualifies Carney is that he has done the same job successfully before"

    Clearly you haven't lived in Canada as I have. Take a look at household debt and the direction the economy is heading in there. Best engage our brain before opening your mouth in future.

  • rate this
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    Comment number 312.

    228. National Maximum Income - includes all income earned, unearned foreign and home for all British Citizens. (don't want to pay - lose your citizenship, all UK property rights and need a visa to visit costing £1M each day).!

    225 Policing - TAX RETURN.

    Generously, I have always proposed it at 20x National Minimum Wage (as did David Cameron).

    Is a banker worth more than 20 nurses?

  • rate this
    0

    Comment number 311.

    well welcome to the 'public sector' - the NHS top dogs are getting 15% plus rises, the resigning director of the Beeb gets over half a million for a 54 day debacle, under Labour a NHS boss whose trust killed people got a payoff - you vote Lib-Lab-Con you'll get more of the same.

  • rate this
    +1

    Comment number 310.

    The BoE exists to do what the government tells it to do and protect the Chancellor from any flak or criticism for weak regulation, failing to hit inflation targets etc The Chancellor says Carney can have housing allowance and it's done (non-execs like their jobs), Osbourne rings King and tells him Diamond has to go and it's done. What anybody else thinks is irrelevant

  • rate this
    -2

    Comment number 309.

    The housing allowance will only be a controversy if the likes of Peston and others in the press stir the pot with negativity. Makes for good headlines!

    This is a fresh set of (non UK old boys club)brains to tackle a very complex role and help get UK plc out of the crapper.

    "Attitude" people, the glass is half full......!

  • rate this
    -1

    Comment number 308.

    @285.FauxGeordie

    "If he delivers he'll be worth every penny. Silence, begrudgers"

    And if he doesn't, he'll be fantastically rich.

    ---
    Irrelevant.

    He already is.

  • rate this
    0

    Comment number 307.

    Political_incorrect, you say 'Plenty of people I know have similar or better qualifications to Carney, except for the bit about working for Goldman Sachs'. Unless you happen to mix with people who have experience of running central banks in major western economies I suspect your comment is pure nonsense.

    The main thing that qualifies Carney is that he has done the same job successfully before.

  • rate this
    -1

    Comment number 306.

    Why do they not apply the same rules to him as they are applying to benefit claimants and use the the same housing benefit cap on him

  • rate this
    0

    Comment number 305.

    Will Carney fit in?

    He has been credited with such a good prior performance that his new peers will be wondering what sort of superman is about to join them

    The canny ones amongst them, I trust there are some, will be thinking "OK let's see." before they jump to any conclusion.

    I am not among them but am canny enough to realise he has got a tall order.
    He will carry the can.
    But can he wriggle?

 

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