KING WITH POWER

DAVID Cameron refused an invitation to address this year's Trades Union Congress and the TUC itself declined an appearance by the Business Secretary VInce Cable. However, despite protests from some unions, the Governor of the Bank of England, Mervyn King, accepted an invitation and had some very interesting things to say to the assembled trade unionists this week.

King made clear that he backed the Lib-Con coalition's plan for tackling “the largest peacetime deficit” in British history but he did not comment on the details of George Osborne's economy measures. Instead, looking back, he accepted that Britain's financial systems had put both the economy and union members' livelihoods at risk and he named the Bank of England as a part of the system that had “let things slip” when the financial crisis broke two years ago. “There was nothing fair about the financial crisis” he said.

In calling for reform of the banking system Mr KIng referred especially to the bonus culture which he said encouraged excessive risk-taking. He said he was surprised that the response of unions had not been “expressed more deeply” and commented, to loud applause, that he found it hard to understand why large bonuses were paid to people in organisations that had been bailed out by the taxpayer. Mervyn King now has more power than any Governor of the Bank of England before him and must use it to deal with the inequalites and inefficiencies he has identified.