Bank deputy f inally quits over family links with Barclays
THE Bank of England was in crisis last night after Mark Carney’s deputy was forced to resign for misleading Parliament over her family links to Barclays.
Deputy governor Charlotte Hogg quit within minutes of the publication of a devastating report by MPs which questioned her ‘professional competence’.
Her departure from her £350,000 a year role is a blow for the governor who was grooming her as a potential successor.
Mr Carney, whose own re-appointment was opposed by some Tory MPs last year, was facing questions over his judgment in defending Miss Hogg to the bitter end. The unprecedented criticism by the cross-party Commons Treasury committee came after Miss Hogg failed to declare that her brother Quintin is a senior executive at Barclays – a lender the Bank regulates. In a withering assessment, MPs ruled her ‘professional competence falls short of the very high standards’ required to do the job.
The verdict is a humiliation for the 46-year-old mother of two from one of the most blueblooded families in British politics who was seen as a leading candidate to become the Bank’s first female governor.
She will continue to be paid until she leaves the Bank – which may not happen for three months – earning her up to £87,500. But she has waived her entitlement to another three months’ salary covering a period of ‘purdah’ on leaving when her options for work are limited.
Miss Hogg has been at the Bank since 2013 and took over as deputy governor for markets and banking two weeks ago.
Her position has been in doubt since it emerged this month that she had failed to tell the Bank her brother worked for Barclays, where he is director of group strategy. That broke the Bank’s code of conduct which she helped to write.
She then misled Parliament by telling the Treasury committee scrutinising her promotion to deputy governor that she had raised all possible conflicts of interest. Miss Hogg apologised when her mistake became clear – but this came only after MPs had approved her new job.
Yesterday it emerged that Mr Carney refused to accept her resignation last week, believing a verbal warning was sufficient.
She offered it again on Monday amid signs the committee report would be highly damaging to the Bank’s authority.
Her resignation was finally accepted by the Bank yesterday before MPs delivered their verdict. With the crisis at the Bank deepening, Mr Carney agreed to her going ‘with deep regret’ after Miss Hogg insisted she be allowed to stand down.
His decision to stand by his deputy, even when it became clear her position was untenable, is likely to raise fresh questions about his judgment. He has already faced criticism for warning last year that a Brexit vote could tip Britain into recession.
The Treasury committee said it will review the way the Bank operates ‘in due course’.
In its damning report yesterday the committee said Miss Hogg’s case was particularly serious for four reasons.
First, she failed for four years to declare her brother worked for Barclays. Second, she ‘did not lead by example’ having helped write the Bank’s code of conduct. Third, there was a ‘failure to appreciate the seriousness’ of her error.
And fourth, it was a ‘serious error of judgment’ to say a conflict of interest was unlikely to arise in future, despite her links to Barclays. The committee said its previous approval of Miss Hogg’s promotion should now be set aside.
John Mann, a Labour member of the committee, said the findings represented the ‘strongest opinion ever made by a Treasury committee’.
He added that Mr Carney now has ‘questions to answer about the culture at the Bank of England’.
Miss Hogg, whose father Douglas Hogg, Viscount Hailsham, was in John Major’s Cabinet and whose grandfather and great-grandfather both served as Lord Chancellor, said in her resignation letter, published yesterday, that she was ‘very sorry’ for an ‘honest mistake’ in not declaring her brother worked for Barclays.
She also apologised for the fact that she had then ‘unintentionally misled’ the committee over the issue.
‘Did not lead by example’