Sir Mervyn King: on and off message

Some of it was on-message, helpful to the government, some of it not – Sir Mervyn King’s interview on Channel 4 News was fascinating. There had been a lot of media training – none of the academic essays he can sometimes speak in.

He gave George Osborne the green light to dump the fiscal rule on debt reduction by 2015 – “if it’s the world economy” that’s the problem and slowing growth is missing the debt target OK? He said it was “arguable to move in that direction.”

On banking reform though, the normally gnomic, rarely controversial governor effectively raised the flag of rebellion for the parliamentary stages of the banking reform bill. Sir Mervyn said he wanted the Vickers report implemented in its original, tougher form – and opposed the dilution of those reforms in the white paper.

But the Lib Dems, who originally were in a similar place to the governor, have signed up to the white paper and publicly defended it. Will they see this as moment to revisit that? Or has Sir Mervyn King, media trained but late to the political battlefield, joined the fight just a little late?

The bill isn’t expected till later this year and the plan is to enact new laws on banking before the end of this parliament in 2015: so there’s time for change if there’s a will.

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