Bank of England: power balance

September 07, 2012, 1:48 PM GMT+0

Britons evenly split over Government and BoE independence as criticism of power plans continue

British public opinion is split over whether there is a suitable balance of power between the Government and the Bank of England, our poll shows. Just under a third of Britons say the balance of power is about right, compared with a nearly equal percentage who think the Government has given too much economic power to the Bank of England.

Meanwhile, one in ten think the Government should allow the Bank of England even more power, while over a quarter say they don't know either way.

  • Just under one third (31%) think the balance of power between the Government and the Bank of England is about right
  • A similar percentage (30%) think that the Government has given too many powers to the Bank of England and should do more itself
  • 10% think that the Government should give more power to the Bank of England and keep less for itself
  • Meanwhile over one quarter (29%) say they simply 'don't know'

The balance of power between the Government and the Bank of England (BoE) ‒ against a backdrop of a still-struggling economy, unpopular banks and a base interest rate of 0.5% ‒ has been under scrutiny recently.

A former external member of the Bank of England's Monetary Policy Committee has criticised the move to make the UK's Financial Policy Committee, run by the BoE, independent of Government as the new macro-prudential policy-maker.

“Too much control to unelected officials”?

Ex-BoE advisor, Kate Barker, has questioned the Government proposals that would see the central institution increase its regulatory authority in the banking sector and as such give "too much control" to unelected policymakers, she argues.

Ms Barker told the Guardian: "There is an important question about how to strike the balance between delegation to independent bodies, and ensuring that politicians take major decisions, which arguably is what we elect them to do."

Accountability and power

Earlier this year, a mix of Labour, Conservative and crossbench peers proposed a series of amendments suggested by the House of Commons Treasury committee, with aims to both significantly enhance the accountability of BoE executives and provide much greater internal powers for the Bank’s court of directors.

Meanwhile, many MPs have voiced their concern that any changes would see Bank of England governor Sir Mervyn King and his successors controlling "an unwieldy empire of regulatory committees that could challenge the Treasury's democratic mandate", while Shadow Chancellor Ed Balls has claimed that the new policy will make the BoE governor’s job too much to take on, and fit only for a "superhuman".

See the survey details and full results here