avatar
The Guardian promotes Central Bank Independence – Corbyn should fiercely oppose


A weird Guardian editorial seems very much to worry that Central Bank independence “will not survive”

It is 20 years since the Bank of England gained independence. It may not survive the nationalist pressures of leaving the EU

Indeed, it should not survive.  It is very important that Corbyn’s Labour kill it. Note the toxic elite assumptions below that central bank independence is good – so good it had to be a “tightly kept secret” that was implemented in a “coup”.

I don’t think I am exaggerating to say that if failing to challenge this could be absolutely lethal to a Corbyn-led government.

Bank of England independence, announced just five days after Labour’s 1997 landslide victory, was a tightly kept secret of the kind that Gordon Brown made his trademark. Yet it was almost at once accepted as the last, critical piece of a framework to protect the UK economy from the inflationary tendencies of weak governments on a par with joining the European Community 25 years previously. Today, at a conference marking the 20th anniversary of his coup, Mr Brown added another claim to its significance as a force for stability: only the discipline of independence had enabled him to keep sterling out of the Eurozone.

But like other speakers both before and after him at today’s conference, the former chancellor warned that just as the post-crash recession had played a significant role in Brexit, so might it undermine the case for Bank independence: the argument for taking back control could just as easily be extended to the power of the Bank to set interest rates, and with consequences as devastating. Mr Brown suggested that the answer to economic populism might be to set up a strategic oversight group that included Treasury officials as well as Bank economists. Mark Carney, the governor of the Bank, suggested it was a bigger challenge. The threat was a response to “QE, nationalism, and loss of trust in globalisation”. No central bank could stop Brexit making the UK poorer. Independence is not the same as omnipotence: the challenge it faces comes from events far beyond its control.

Leave a comment