20 December 2012

By Roger Jeary

New Bank of England Governor Mark Carney will be one of the few public servants granted a massive wage and generous benefits, while almost all other public sector workers are on a pay freeze at best, or being made redundant. But we're all in this together, right?

It's not all bad news for public servants.

That is not if you are employed as the governor of the Bank of England. Mark Carney the Canadian banker hired to replace current Governor Mervyn King next year is to receive an extra £250,000 housing allowance on top of his promised salary bringing the total remuneration package to £874,000. The basic salary of £480,000 is enhanced by an additional £144,000 in lieu of a pension, but even this was not considered adequate for him to be able to obtain suitable housing for his stay in London. So he demanded, and got courtesy of the Treasury, the additional annual allowance of a quarter of a million which, after tax, will provide him with £2,6000 a week to meet his housing costs for himself , his wife and 4 daughters.

Poor Mervyn King! He has to manage on a basic salary of £305,000 and pay for his housing out of that! Of course if you are a lower paid public servant you will not have benefited from a pay rise of 57%, in fact the remainder of the Bank of England staff like other public servants have suffered a 3-year pay freeze. And as for those receiving housing benefit and living in London, they will be expected to manage on a maximum weekly housing benefit capped at £400 for a 4 bedroomed house.

Given the overall benefit cap applied to citizens in England of £500 per week it is difficult to see how the income that the new governor will apparently receive from letting out his not-unsubstantial property in Canada for 5 years, is not taken into account in determining his housing allowance here in London.

No doubt the new Governor when in place in the middle of next year will provide advice on government monetary and fiscal policy to the Prime Minister and the Chancellor. We know already the planned further cuts in public expenditure. Yesterday, local authorities were told that budgets would once again be cut next year and by the end of this parliament local authorities budgets will have been reduced by a third. Tens of thousands of local government jobs will have been lost, replaced at best with low paid, part-time insecure jobs in the private sector. No doubt Mr Carney is well-qualified for the job he has been offered but I do question the political sense of making such demands on the public purse for his own benefit when in a role which will clearly limit access to public spending for everyone else. Another classic example of “we are all in this together”. Not!

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