You're entitled to be angry, King tells unions

Mervyn King braves the TUC lions' den - and even earns some (grudging) applause with a spot of banker-bashing...

by James Taylor
Last Updated: 19 Aug 2013
When the TUC said it was inviting Bank of England Governor Mervyn King to speak at its Congress this year, not everyone was impressed; some of its members believe that as one of the most influential voices arguing for deficit reduction, King is actually part of the problem. But in his speech today, King seemed determined to distance himself from the City (and, to a lesser extent, the Government): he insisted the financial sector was solely to blame for the recession and said union members were ‘entitled to be angry’ - even getting a bit of applause for criticising banker bonuses. Though it wasn't all about playing to the gallery: to his credit, King didn't back down from his pro-cuts stance...

In the absence of any Coalition ministers, King is effectively the most senior figure to be speaking at Congress this year. And although the Bank is independent from the Government, his outspoken support for a faster deficit reduction plan - as embraced by the Coalition - made him a controversial choice by the TUC, since this year's meeting has been dominated by talk about how the unions should respond to the spending cuts he's encouraging. RMT boss Bob Crow apparently fulfilled his threat to boycott the speech, leading out his union delegation when King stood up (rumours that this boosted the average IQ of King's audience by several dozen points haven't yet been confirmed).

However, Merv struck a pretty conciliatory tone. In an interview published in the Congress Guide, he'd insisted the Bank was no longer 'an apologist for the City' - and his speech made several strident criticisms of the banking sector, particularly its approach to bonuses and its role in the financial crisis. He even accepted a degree of personal culpability - suggesting that he, his fellow policy-makers and the sector as a whole 'let it slip' when an age of steady growth was in their sights. None of which was arguably very revelatory, but it clearly went down well.

Despite his audience, though, King wasn't backing down on his support for deficit reduction - suggesting that the example of Greece showed what could happen if countries were too slow to address the problem. Yet he seemed keen not to nail his colours to the Coalition's mast, suggesting there was 'plenty of room for disagreement' on exactly how to do this, and even urging the unions to come up with their own plan. 'We at the Bank of England and you in the trade union movement should work together,' he added, somewhat optimistically.

While this might seem an unlikely concept for the likes of Bob Crow to grasp, King surely has a point. Whether the unions like it or not, the cuts are coming - so they need to engage with the likes of King to work out how this should happen and, if necessary, make an alternative case. So good on the TUC for inviting him, and good on Merv for showing up...

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