I believe Darling is the man for Bank job

Columnist

Tuesday 14 August 2012

What do Harry Redknapp, Sir Fred Goodwin, Lord O'Donnell, Lord Turner and Jim O'Neill have in common?

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Harry Reid

Well, they're all men of course. Another common denominator is that they have all been tipped as candidates for the governorship of the Bank of England, which will soon be vacant.

Of course Mr Redknapp and Sir Fred din were named as "joke" candidates, but this simply points to the absurdity of the present situation – it seems to be impossible to find anyone of suitable stature and credibility to take on the job, which is surely the most powerful non-elected post in the UK.

The job will be even more difficult and important than it is now as the Financial Services Authority is wound up and the BofE takes on full responsibility for the supervision of the entire financial industry. Meanwhile the fact that those mentioned above are all men points to continued sexism in this extraordinarily important area where power politics and high (or low) finance meet. The new Governor will be appointed by the Chancellor, George Osborne, who seems to be struggling here, as he is in so many other areas. The next Governor must be special. He must have in-depth knowledge of the complexities of economics and international finance, acute insight into how banking works – or all too often, doesn't work – in the UK and the wider world, an ability to communicate clearly, loads of personal authority if not charisma, and most importantly of all, an acute understanding of politics in the UK. Step forward, superman. Yet there is a Scot who pretty well fits the bill and I'm surprised that, as far as I know, he has not been mentioned. He is Alistair Darling. The former Chancellor emerged with his reputation intact from the global financial crisis of autumn 2008. Eighteen months later he left government, after 13 years in the Cabinet, with his political standing maintained – unlike his boss, Gordon Brown. Mr Darling is respected across the political spectrum, at home and abroad – though perhaps a little less so here in Scotland, where he is a divisive figure as he currently leads the campaign to preserve the Union. That could make him a controversial Governor, for the next boss of the Bank of England will find himself – it is, as I've suggested, highly unlikely to be herself – in a very sensitive situation following the Scottish constitutional referendum in 2014.But right now even committed Nationalists would probably admit that the UK's needs are more pressing than those of Scotland, and Mr Darling is anyway a strong Unionist, as his current role indicates. I suspect some of us who fervently wish for a Yes vote in the coming referendum would be pleased if Mr Darling, a formidable if understated operator, slipped off to London before the campaigning starts in earnest. It was in May 1997, only five days after the General Election that swept Tony Blair to power, that the new Chancellor, Gordon Brown, announced he was adding to the already considerable responsibilities of the Bank of England. The Bank was now to set the interest rates which would ensure the Government's inflation targets were met. This major innovation had been advocated by two prominent Tories, Nigel Lawson and Norman Lamont. Its adoption by a Labour Government took the City and the political world by surprise. Has it worked? Probably not. Inflation targets have not been met and altogether the BofE has proved inept at both financial control and economic forecasting. Sir Mervyn King, the current Governor, is not due to retire till next June but the Government is keen to have his successor appointed well before then. There has even been speculation that the job will shortly be advertised. Mr Osborne is getting desperate. He would gain plaudits if he made an appointment that is not partisan or tribal. Of course Mr Darling, despite his eminent qualifications for the post, might not want the job. In which case Mr Osborne might consider some Lyndon Johnson style arm-twisting.

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Finance

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I believe Darling is the man for Bank job

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