The Shadow Chancellor said he would install a person able to “meet the requirements of what will be a radical Labour Government”, a newly re-surfaced September 2018 interview has revealed. Mr McDonnell told left-wing media organisation Novara Media: “When we move forward what we will want to have is someone in the Bank of England that, yes, is in tune with our ideas, but has the status and the experience of understanding the economy – and there is a range of people out there. We have a set of advisors at the moment that are helping us through, and it will be chosen from I think the right person at the right time to meet the requirements of what will be a radical Labour Government.” 

But the Shadow Chancellor also praised Mark Carney, the current BoE Governor, and Chancellor Philip Hammond’s decision of confirming him until January 2020.

This move, Mr McDonnell said, would allow the Labour Party the “opportunity” to choose his own Governor after the end of Mr Carney’s mandate.

The Labour added: “I have a good working relationship with Mark Carney, we meet on a regular basis and we have a dialogue which I think is incredibly constructive.

“What I was pleased with is that he stayed on because that means that gives me more of an opportunity for us to come to government and choose our own, so that is helpful for us.” 

The prospect of a radical Labour Government selecting the future BoE Governor raised concern among business bodies.

The Investment Association, the trade body representing investment firms, warned its members in March of the increasing likelihood of Mr Corbyn becoming the next Prime Minister – and told them to step up attempts to influence the Labour leader’s policies.

And Tory MPs have also spoken about the possible consequences of letting Mr McDonnell choosing a like-minded Governor.

One Conservative MP branded the scenario a “complete disaster”. 

Charlie Elphicke, Conservative MP for Dover who sits on the Treasury Committee, said: “A radical hard left Governor of the Bank of England chosen by John McDonnell would be a complete disaster.

“Interest rates would rocket, threatening homeowners and small businesses.

“Our economy would be driven off a cliff. 

“It’s clear a Corbyn Government would take us backwards and make the country poorer.”

The BoE was granted operational independence in 1998 by the Gordon Brown Labour Government, which handed it control of interest rates.

The Governor is expected to remain impartial on legislative issues.

A spokesperson for John McDonnell said: “This is pure invention and absolute rubbish. Labour would maintain full Bank of England independence from government and political decision making.”   

Source: Read Full Article