Deputy accused of 'being asleep at the shop'
Published 21/09/2007 | 09:57
Mervyn King's reputation was on the line at the committee hearing but his deputy for financial stability, Sir John Gieve, got the worst roughing up at the hands of the MPs.
John McFall, the committee's chairman, already seemed impatient with Sir John before the former civil servant revealed he had gone away for two weeks in mid-August, just as he learnt that Northern Rock was under strain.
The first week was for a family funeral but the second was a holiday in France. Sir John said he kept in touch with events by phone.
"Were you having a sleep at the back of the shop while the mugging was taking place at the front?" Mr McFall asked the former top civil servant. Sir John said: "I don't think I was asleep at the wheel."
Sir John's faltering performance also earned a rebuke from the Labour MP George Mudie for not being on top of the problems at Northern Rock earlier and for making too many excuses about the things he had not done.
Michael Fallon, the senior Conservative on the committee, criticised Sir John for not having read Northern Rock's July results statement. Sir John said it was not his job to "second-guess" the work of the Financial Services Authority's supervisors.
Alan Clarke, UK economist at BNP Paribas, said Mr King came out of the interrogation well. Sir John has suffered at a Commons committee before when he was Permanent Secretary at the Home Office. In 2004, he told a committee that he could not recall how a visa was fast-tracked for the nanny of David Blunkett, when he was Home Secretary. A report into the affair did not criticise Sir John, who was knighted in 2005.
Sir John joined the Bank of England as Deputy Governor in January last year. He sits on the Bank's Monetary Policy Committee and is also on the Board of the Financial Services Authority, the main City regulator.
He spent most of his civil service career at the Treasury, where he pushed through Labour's first two spending reviews and was later in charge of policy on financial services and financial stability. His term at the Bank of England expires in January 2011.