Concerns have been raised about the Treasury’s “shambolic” handling of the Bank of England appointment process after Mark Carney confirmed yesterday that he would be extending his term as governor.
Mr Carney told MPs on the Treasury select committee that he was “willing to do whatever else I can to promote a smooth Brexit and an effective transition at the Bank of England”.
He added: “The chancellor and I have discussed this and I would expect an announcement in due course.”
His comments effectively put an end to a week of speculation after the Evening Standard, the London newspaper edited by George Osborne, the former chancellor who appointed Mr Carney, ran an article saying that the Treasury had asked him to stay beyond his planned exit in June 2019 until 2020.
However, the news raised fresh questions about due process for what is considered to be the most powerful unelected position in the UK. The Treasury has yet to provide any details about the extension or even confirm it. It is expected to do so before the chancellor appears in front of the House of Lords economic affairs committee next Tuesday.
Advertisement
One former Bank official said that parliamentary scrutiny had been avoided. They asked: “Why would the Treasury let Mark Carney go before the committee without an announcement, so MPs can’t probe him on it?” Sir John Gieve, a former deputy governor, said: “It seems a bit odd, as they knew he was going to talk about it.”
Andrew Sentance, a former ratesetter at the Bank, described the process as “shambolic” and said: “Mr Carney is making a travesty of the appointment process.”
The Treasury initially had planned to advertise for the job in July, when thoughts of an extension seemed far from Mr Carney’s mind. Asked on July 17 by Rushanara Ali, a Labour MP, whether he would “hang around to make sure that we have an orderly transition” for Brexit, he dismissed the suggestion by replying: “March comes before June, yes.”
He had already extended his departure by a year to June 2019 to ensure that he would still be in post for the end of the Article 50 process in March. When asked the same question earlier that month by Joel Hills, business editor of ITV News, he “looked very surprised [and] completely unenthused by the idea”, Mr Hills said on Twitter.
Downing Street also appeared to have been unprepared, saying on Monday that the plan was that Mr Carney would step down as governor next year. Yesterday, No 10 said: “The prime minister thinks he has done a good job in his time as governor and there will be more to say on that in due course.”
Advertisement
The Treasury is also facing questions about the appointment process for the deputy governor, Sir Jon Cunliffe, 65, whose five-year term ends in November. Sir Jon was a frontrunner for the governor job. It is not clear whether the Treasury plans to announce his reappointment alongside that of the governor, but it has not advertised for a new deputy governor for financial stability, a post that is vital given the prospect of a disorderly Brexit.
Mr Carney, 53, originally had decided to serve only five years of an eight-year term, taking him to June 2018, claiming that his family wanted to return to his native Canada. His family are still in the UK. Sir John Gieve speculated that Mr Carney may be staying on because the Treasury’s favoured successor will not be ready in time or to serve a further six months “to calm the Brexit transition”.
