Row continues in U.K. on bank appointment

Press, 8 January 1983, Page 15

Row continues in U.K. on bank appointment

NZPA staff correspondent London The row over Prime Minister Margaret Thatcher’s choice of Mr Robin LeighPemberton as Governor of the Bank of England continued this week, with Opposition M.P.s saying a Labour government would not feel bound by the appointment. Labour M.P.s are angry that they were not consulted before Mr Leigh-Pemberton, a 55-year-old barrister and wealthy landowner, who is chairman of the National Westminster Bank, was named to succeed Mr Gordon (now Lord) Richardson next July.

Their hostility is also reported to be shared by Social Democrat and Liberal M.P.s who see Mr Leigh-Pember-ton's appointment as making the traditionally non-partisan job more of a political one. The new governor, a former Conservative county councillor, is seen as holding strongly Thatcherite economic views. .

Labour M.P.s say the Opposition was not consulted by Mrs Thatcher before his appointment. although the then Labour Chancellor of the Exchequer, Mr Denis Healey, had consulted her before Mr

Richardson was reappointed in 1977.

The reason, they say, is that strong objections would have been raised to Mr Leigh-Pemberton getting the job. “It is .outrageous that the Opposition was not consulted on his appointment.” a Labour spokesman, Mr Robin Cook, said. “Since we were not consulted. we do not feel we are bound by the appointment.”

But, under the Bank of England Act. there is no provision for a governor to be sacked before the end of his term.

Mr Leigh-Pemberton, whose appointment has also been criticised by the “Financial Times” and the conservative “Daily Telegraph" because of his lack of central banking experience, says the criticism is unfair. “I think that those in the Labour Party who have spoken out against me, and indeed want to fire me, have been rather unfair,” he said.

“They have also misinterpreted what I have said. I am not a crude monetarist or a rabid right-winger as I have been portrayed in some places. “I think I shall be able to

get along with a British government of whichever political colour." Mr Leigh-Pemberton said he got on “very well" with Labour's shadow chancellor, Mr Peter Shore, when they lunched together just before his appointment was made.

Senior Labour M.P.s are reported to be particularly angry at the new governor’s comment that "it is the prime duty of the governor of the Bank of England to protect the currency, and if policies were proposed which were likely to devalue it seriously — not techically, but in the eyes of the world — obviously’ it would be my duty to advise the Government of the consequences of that policy and, I think, resist it."

But Mr Leigh-Pemberton says it is “nonsensrcal" to say he is going to resist any devaluation of sterling, a major plank in Labour’s economic policy. “I shall offer financial advice on political decisions, that is precisely the job of the governor of the Bank of England.” he said. “I am not going to initiate political decisions. I am more than willing to leave that to the politicians."