When Gus O’Donnell was running the civil service, he was known by his initials — GOD. It seems to have gone to his head. He says in this week’s House magazine that he’s considering applying to be Governor of the Bank of England, and in the same interview exposes his failure to grasp modern economics by saying it would be dangerous to put income tax back to 40p (which was the plan even under Gordon Brown).
It is striking that the technocrats like O’Donnell now want to run the show explicitly (as his endorsement of a civil service candidate for Mayor, Siobhan Benita, demonstrates). That Sir Gus is even in the frame for the Bank of England job sends a dangerous message about the quality of candidates to succeed Sir Mervyn King, himself in denial about his failure to control inflation and the asset bubble which was blown by his easy-money policies. What’s needed for the Bank of England is someone who actually saw the crisis coming, or can at least offer an explanation for it better than that Sir Mervyn volunteered last night (‘A big Scot did it, then ran away’).
In the current issue of The Spectator, Martin Vander Weyer mentions Dr Allan Bollard, who has just stood down as head of New Zealand’s central bank. He’d be a far better bet that Sir Gus, in that he appears in possession of a clue. Which is more than can be said for many of the candidates being touted for Threadneedle St so far.
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