On Wednesday, Rishi Sunak will deliver an economic impact assessment to the House of Commons in which the Chancellor is expected to announce a number of measures to stimulate the economy. With a £1.5bn package pledged today for the arts industry, the expectation is that Wednesday’s event will cement Johnson’s government as a comparatively high spend to the Tory governments that came before.
That evening, MPs will have their weekly meeting of the 1922 committee of Tory backbenchers. Only rather than the Chancellor update the parliamentary party and take part in a question and answer session, Coffee House can reveal MPs have been told Bank of England governor Andrew Bailey will be the guest of honour. On the surface, this is an unprecedented move that has been met with surprise by Tory MPs. It is also bound to lead to questions being asked at a time when some are questioning the Bank of England’s independence. It is unclear whether Bailey also plans to hold a similar audience with Labour MPs.
However, Bailey’s appearance ought to at least shed some light on how the bank intends to work with the government in the coming months. In recent weeks the Bank of England governor has become increasingly outspoken. In a podcast interview with former chancellor Sajid Javid last month, Bailey suggested the government could have struggled to fund itself through lockdown if the Bank of England had not stepped in early on: ‘I think we would have a situation where in the worst element, the Government would have struggled to fund itself in the short run’.
With Bailey’s funding intervention read in some quarters as a suggestion that the bank would not be able to do the same thing again, could the Bank of England Governor’s Wednesday outing serve as a warning that there is no magic money tree?
Update: A Bank of England spokesman has confirmed the meeting is going ahead: ‘As part of the Bank’s regular engagement with political representatives, the Governor will meet with members of the 1922 Committee on Wednesday 8 July to explain the Bank’s current analysis on the economic impact of Covid-19 and listen to their views.’ An appearance before parliamentary Labour party is mooted for later this month.
Update II: Following questions about the timing of the intervention, a Bank of England spokesperson has now said that the meeting will be postponed to a later date: ‘Due to the Chancellor’s economic update on Wednesday, the meeting between Andrew Bailey and the 1922 committee – arranged prior to the scheduling of the Chancellor’s statement – will now take place at a later date.’
Comments