CITY AND SUBURBAN
The demon king moves back to centre stage, bathed in a soft pink spotlight
CHRISTOPHER FILDES
New Labour, new demons. In Old Labour's demonology a special place in the ninth circle was reserved for Montagu Nor- man. This was the Governor of the Bank of England whose adherence to the gold stan- dard had sentenced his countrymen to 'unemployment and depression. His bankers' ramp' had ejected a Labour gov- ernment from power. Come the revolution (or the 1945 election) the next one would seize the Bank and put it in its place. Even John Smith was for keeping it there: he did not plan to be Chancellor (he said) and then let the Bank tell him what to do. Now comes Gordon Brown to talk in terms of back, the Bank its independence. Come °aetc, Norman, all is forgiven. The Court of Directors would need a shake-up and in truth it is not now much more than a supe- rior City luncheon club. The Bank's mone- tary experts would be joined by a new breed, taken on the Bank's strength for the duration, to form a committee which would advise the Chancellor on interest rates. It might come to resemble its opposite num- ber at the US Federal Reserve. No wonder the Governor likes the idea. If he and the rest of us are unlucky, the Bank will get its independence just before it is relegated to the status of a country branch of the pan- European central bank in Frankfurt. That, though, is a demon for another day.
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