UK Politics

Labour's spat with Bank of England governor Mark Carney

Mark Carney Image copyright PA
Image caption Mark Carney did not think much of plan to limit market share

It's a week in which a former Goldman Sachs banker from Canada has found himself right at the heart of political debate.

He is a man who was described by Chancellor George Osborne, when he was appointed, as the "best person in the world to do this job".

His name is Mark Carney, the (relatively new) Governor of the Bank of England.

On Wednesday, shortly the BBC's Political Editor Nick Robinson had broken the story of Labour's plans to impose a limit on the market share of individual banks, Mr Carney happened to be appearing in front of the cross-party Commons Treasury Select Committee.

Leaked details

Given Nick's exclusive about the banks and a row about bonuses were the political stories of the day, it was perhaps inevitable Mr Carney would be asked for his views.

"Just breaking up an institution doesn't necessarily create or enable a more intensive competitive structure," the Bank of England governor said.

A cap on banks' market share, he said, would "not result in substantial improvement to competition."

And, to boot, he didn't think a cap on bankers' bonuses - an idea also endorsed by Labour - was such a good idea either.

Labour were clearly less than gruntled by these remarks.

Remarks, after all, about the leaked contents of a speech that, at the time, had yet to be actually delivered.

Conversely, the Conservatives were delighted and keen to emphasise what he had had to say, and the importance of his remarks, in their conversations with us.

Fast forward to the build up to Ed Miliband's speech on Friday morning.

'Unhappy relationship'

Asked about Mark Carney's remarks by the BBC, the Shadow Business Secretary Chuka Umunna was icy in his observation.

Image copyright PA
Image caption Chuka Umunna was less than impressed by Mr Carney's intervention

"I actually had an exchange in July 2010 with Mark Carney's predecessor, then Sir Mervyn King. He made it very clear to me that it is not a good thing for governors of the Bank of England to be involved in political matters."


Later, the Shadow Chancellor Ed Balls sounded like he was trying to publicly patch things up on Radio 4's The World At One.

"I have known Mark Carney for a decade and there is no prospect of an unhappy relationship," he said.

Asked if he had told Mr Carney to "shut up", Mr Balls replied: "absolutely not, of course not. On the issue which he raised on Wednesday of bank bonuses and our view that pay and bonuses where the bonuses are more than 100% higher than salary, he disagreed with that. On that one, I'm going to disagree with the governor of the Bank of England."

So that's bonuses dealt with.

And on banks' market share: "Where he said imposing a cap - and he hadn't seen our speeches at that time - imposing a cap would not in and of itself solve the problem, well, of course he is right about that. That is why this is part of a package of reforms and why we are not simply imposing a cap."

Ed Miliband similarly sought to play down any difference with Mr Carney.

After all, Mr Miliband could be prime minister by the summer after next and have to work alongside him.

So, any word from the governor himself today?

Unsurprisingly, no.

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