Franchise for the Bank
BONAR Law as Chancellor settled an argument with the Bank of England by threatening to take the Government's account away and give it to the Midland Bank. Earlier Chancellors used to settle scores when the Bank needed an Act of Parliament to renew its charter. Their regular asking price was a large loan. The idea tickles Professor Tim Congdon, who wants to bring back the Charter Acts. Every so often (so he argues in Gerrard & National's review) the Bank should ask Parliament for a new Act, and would then have to give an account of its stewardship. In this way, he says, the Bank could be made accountable to Parliament but inde- pendent of Government. The first time this happens, I shall put in a bid for the franchise. The scramble will make the world of commercial television look tame, and the Governor will do well to write a golden parachute into his contract. The Congdon-Goodhart consortium will stand for sound money and high thinking, the enterprising Brian Pitman of Lloyds could offer a decent return on the capital, Lord Hanson will coyly disclose that he has 21/2 per cent of the shares. My own group would seek the repeal of the Banking Acts and choose our Governor for the bushiness and force of his eyebrows. (We have approached Denis Healey.) I like Tim's plan, but I wonder whether he expects Parliament to be as high-minded as he is. I fear a deal which would make subservience the price of renewal — as in the old days, you get your Charter, we get our loan.
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