I’m not excited about the appointment of a new Governor of the Bank of England. The money power is one too pervasive and too dreadful to be trusted to an individual or a committee: the prospects of tens of millions of people ought not to depend on the talents and character of an individual or a small group. With Richard Cobden, I believe managing the currency and interest rates is an impossible task. That’s a minority view these days but more or less anyone ought to agree that the Governor of the Bank of England has now a vast power over the collective and individual life of the country and that this power will increase under the new regulatory system. That’s why the Treasury Select Committee’s pre-appointment hearing is so important.
Given the undoubted power of the Governor, it is vital that this appointment is subject to democratic scrutiny. If the Treasury Committee does not support the appointment of Mark Carney, then the House must have the opportunity to debate and endorse or reject their decision — and the Chancellor’s.
These select committee debates are usually held in back-bench time, which is precious and which the Government seems to ignore. The role of Governor is too important for that: any debate should be in Government time and any motion should be binding on the Government. A free vote is probably too much to ask, but nevertheless the vote should be free.
The power to set interest rates and to control the exchange value of money is either a power too dreadful to tolerate in a free society or, if it must be tolerated, it is one which can only properly be wielded by someone ultimately under democratic control. Parliamentary scrutiny matters, first through the Treasury Committee, then through the whole House if necessary.