Mervyn King left unscathed after entering TUC den
Bank of England governor Mervyn King must have felt deeply nervous as he faced delegates at the TUC Conference in Manchester yesterday.
Union activists would never greet favourably the sight of the bespectacled, white-haired economist as he mounted an implicit defence of the public spending cuts which have unions and their members in a tizzy.
Unions have branded the Liberal Democrat-Conservative political union the "demolition coalition".
But Mr King pleaded that the coalition's plan to reduce the deficit over the next five years was a more gentle programme of fiscal cuts than that experienced in many other countries.
He also defended the Bank's Monetary Policy Committee's continued fiscal management tool of keeping interest rates at 0.5%.
He said: "It is not sensible to risk a damaging rise in long-term interest rates that would make investment and the cost of mortgages more expensive."
And Mr King stressed that the programme of deficit reduction strongly required the co-operation of the unions, as around 60% of the public sector is unionised.
Strikes are planned for later in the year in protest at the cuts, with many fearing prolonged action could grind Britain to a halt. Though unions feel they have to strike as projections put the number of possible UK public sector job losses over the next five years at 600,000.
In a rallying cry for reconciliation, Mr King said: "We at the Bank of England and you in the trade union movement should work together. It will require patience and determination on all our parts, including your members," he maintained.
He also urged his audience to think about the future.
"The costs of this crisis will be with us for a generation.
"And we owe it to the next generation to seize this opportunity to put in place the reforms that will make another crisis much less likely and much less damaging," the governor continued.
He won some plaudits from a tough audience by criticising bankers' bonuses.
He said: "Remuneration, especially the structure of financial sector bonuses, encouraged excessive risk-taking, and distorted the aspirations and career choices of too many talented young people."
But not everyone was won over, however. The GMB president said that bankers were "greedy bulls****ers".
He added that Mr King had failed in his job.
And Bob Crow, leader of the Railway Maritime and Transport Workers Union (RMTU), stuck to a vow to boycott the speech.
Indeed, he gave the room a wide berth, while his delegation walked out as Mr King started his speech.
Mr King's next Bank of England meeting will be a cake walk compared to the tough union crowd.