Generous £250,000 housing allowance comes on top of £480,000 salary and £144,000 worth of pension contributions
Incoming Bank of England governor Mark Carney will pocket an annual £250,000 housing allowance, taking his total pay package close to £1m a year when he takes the reins next summer, the central bank has revealed.
Carney will receive the allowance as part of a generous package put together by the chancellor, George Osborne, to lure him from his current job in Ottawa as boss of the Canadian central bank.
It was already known that Carney would be paid a salary of £480,000 and pension contributions worth £144,000. He will also receive free health and dental insurance and the use of a chauffeur-driven car.
The revelation that he will gain a further £250,000 to house his wife and four children is likely to shock MPs and campaign groups concerned at wage inflation for top executives when wage rises are limited to 1% across the public sector.
Matthew Sinclair, chief executive of the TaxPayers’ Alliance, said Carney’s large salary would propel him into the top bracket of best paid public servants.
“When the government is rightly planning to cap housing benefit, it will certainly stick in the throat of many that Mr Carney is receiving more per year in housing allowance than the average price of a British home,” he said.
A statement from the central bank’s non-executive directors said that while Carney’s remuneration appears high, it is similar to the £305,000 pay enjoyed by Sir Mervyn King once the bank’s £300,000 a year contribution to King’s final salary pension fund is taken into account. However, King has not received pension contributions for the last four years, as his scheme is fully funded.
“Although the next governor’s salary of £480,000 is considerably higher than the salary of the current governor (£305,000) the cost to the Bank of enrolling him in the now closed pension scheme previously available to the governor and deputy governors would approximate to more than 100% of salary. This compares with the 30% cash allowance in lieu of pension to which the next governor will become entitled,” it said.
Carney is already mired in controversy over his links to opposition MPs in Canada where it is alleged he held talks about becoming leader of the opposition Liberal party. He was cleared after an internal review, but the reports sparked warnings from former Liberal Democrat Treasury spokesman Lord Oakeshott and former City minister Lord Myners to be mindful of the independence of the Bank of England when he takes up the post next July.
The Bank of England said the extra £250,000 accommodation fee would be taxed at the higher rate of 45%.