MPs need a say in Bank of England Governor choice

The Telegraph reports today that George Osborne, the Chancellor of the Exchequer, is due to announce the recruitment process to find a successor for the post of Governor of the Bank of England in June, with a long-list drawn up in August and September. Former Cabinet Secretary Gus O’Donnell is thought to be in the running.

In the past, chancellors have tended to appoint deputy Governors to the top job – both Mervyn King and Eddie George are two such examples. The paper reports that Mr Osborne is under pressure to make the process more open, after his predecessor Alistair Darling made a pledge for more competition for the post back in 2008. Treasury Select Committee Chairman Andrew Tyrie MP is reported to have said that MPs would want a say over the appointment, especially given the powers that come with the post. The Institute for Government agrees. In our report Balancing Act, we strongly recommended more parliamentary scrutiny for 25 of the country’s top jobs, one being the Governor of the Bank of England.

In the report the author Akash Paun recommended:

"An effective veto power granted to Parliament for an ‘A list’ group of about 25 of the most important appointments in the country. This list would be in addition to appointments to the Office for Budget Responsibility where a formal veto power for the Treasury Select Committee already applies.

For appointments to ‘A List’ posts, the minister should be required to appear before the relevant select committee in the event that the committee has concerns about a proposed appointment following a hearing with the candidate. Further, as a last resort, appointments should be referred to the House for resolution if agreement between the minister and committee is not forthcoming."

To read more about our recommendations, see our report Balancing Act by Akash Paun.

Related information: The Telegraph: Former Cabinet Secretary Lord O'Donnell in the frame to be Bank of England Governor