INCOMING Bank of England governor Mark Carney will receive an annual housing allowance of £250,000 to cover the cost of renting in London, it was revealed yesterday.
This is on top of his salary of £480,000 and an annual payment of £144,000 in lieu of pension contributions. The total package is worth £874,000 per annum.
The size of the deal, which was signed off by the central bank’s non-executive directors yesterday, is notable at a time when most public sector workers are subject to a pay freeze. Mervyn King, the current governor, earns the relatively meagre sum of £305,000 although this excludes substantial pension contributions.
The government will also cover the cost of moving Carney and his family from Canada before he takes up the post in July 2013, although it is not known how much the taxpayer will have to pay.
Carney’s generous package is testament to how far George Osborne was willing to go in his pursuit of the ex-Goldman Sachs investment banker. The chancellor is understood to have agreed to the substantial housing allowance so Carney can have the same standard of life he currently enjoys at the large home he shares with his wife and four daughters in suburban Ottawa.
Carney also persuaded the chancellor to let him serve a five-year term of office rather than the traditional eight-year period. This has led to repeated speculation that he is already planning to take up an active role in Canadian politics.
Despite the substantial pay package, yesterday few politicians were willing to publicly criticise the widely-praised appointment of a man who will be tasked with overseeing Britain’s economic recovery and have beefed-up regulatory powers.
WHERE TO, GOVERNOR?
Despite being handed a £250,000 a year housing allowance, Mark Carney might struggle to find his dream five-bedroom house within easy reach of the Bank of England. After tax at 45 per cent he will have a budget of around £2,600 per week but – according to Savills – London rents are such that he could have to make his four daughters share bedrooms. Savills can provide a three-bed apartment near Regent’s Park for £2,500 per week or an unfurnished four-bed Hampstead villa for £2,000. A three-bed Belgravia apartment is £2,650. Alternatively, Carney could rent somewhere more spacious if he dips into his combined salary and pension of £624,000 per year.