Bank boss backlash
Governor criticised over decision to let staff spend only one day a week in office
THE Bank of England faced a backlash last night over its decision to allow staff to work four days a week from home.
Officials have to come in for only one day in five, with their long-term target set at just half of the working week.
The revelation caused outrage last night because governor Andrew Bailey has warned he feels ‘helpless’ in the face of surging inflation and ‘apocalyptic’ food price rises.
Former Cabinet minister Liam Fox said the Bank should be doing all it could to boost the economy.
‘It seems strange that in an inflationary crisis, so few key personnel are attending their place of work,’ he added. And Brandon Lewis, the Northern Ireland Secretary, criticised Mr Bailey for his ‘surprising’ comments.
Marks & Spencer chairman Archie Norman said that while food price rises would hit household incomes it was ‘perhaps not apocalyptic’. A government source described the governor’s language as ‘ridiculous and frankly irresponsible’.
Mervyn King, who led the Bank from 2003 to 2013, urged Mr Bailey, who has sung the praises of remote working, to consider a hike in interest rates.
‘The big challenge is they’ve got to demonstrate that they realise the need now is to give a very strong signal that they’re focusing on bringing inflation down,’ the peer told LBC radio.
The row over the Bank’s support for remote working came as:
Rishi Sunak was warned by a Conservative MP that their party would lose the next election unless he chose to cut taxes;
The UK reached ‘full employment’ with more vacancies than jobless;
As diesel reached a record price at the pumps, pressure rose on retailers to pass on the full 5p fuel duty cut;
Schools were warned that their pupils would have to make do with smaller meals and cheaper ingredients; n Cabinet minister Jacob ReesMogg suggested that some civil servants seemed to want to work ‘in Tuscany’.
Last week Boris Johnson told the Daily Mail that staff were ‘more productive, more energetic, more full of ideas’ when in the workplace with colleagues.
Despite this, the 3,000 Bank of England staff must come to the office just one day a week. From June 6, they will be told to be in the office 40 per cent of the time. After this, the Bank has limited itself to getting its workers back for half the time.
The head of a restaurant near the Bank said officials used to book a table for ‘about 40 people’ once or twice a week preCovid. ‘Now, maybe it’s once or twice a month,’ said the boss, speaking anonymously.
Melissa Manou, a barista at a local Costa Coffee shop, said custom was about 50 to 75 per cent of pre-Covid levels and the shop had cut staff from six to four.
Appearing before MPs on Monday, Mr Bailey praised remote working, saying: ‘Regional law firms now say they have to compete with London law firms at London law firm rates. London law firms are saying to lawyers in Cardiff and Leeds: “You don’t actually have to come to London”, often, “and we’ll pay you the London rate to be a lawyer in Cardiff or in Leeds”.’
Sir Dave Ramsden, a deputy governor, said: ‘In professional services, you see much more evidence of hybrid models and workers expecting to be able to work remotely.
‘Then you might go into some sectors like technology, which is a global sector with global talent, and a lot of people in that sector expect to work remotely 100 per cent.’
Mr Lewis’s questioning of the phrase ‘apocalyptic’ was a suggestion that the Cabinet is concerned about the performance of the Bank. An unnamed minister was quoted at the weekend as saying it had been failing to ‘get things right’ and another suggested it had failed a ‘big test’.
A spokesman for the Bank of England said last night that it was planning to ‘capitalise on the benefits of working together in person, while maintaining the flexibility offered by home working’.
The latest criticism comes after Mr Bailey warned people against asking for pay rises as the UK preare
pares for inflation to hit 10 per cent later this year. He had said higher earners should ‘think and reflect’ before asking for salary hikes, despite a worsening costof-living crisis for workers.
When grilled by MPs on the Treasury Committee on Monday, Bailey, who earns £570,000 a year, said he had rejected a pay increase for 2022. He said: ‘It is a societal question, but everybody must make their own judgment.’
Monday’s session in front of MPs saw the Governor claim that he was powerless to prevent soaring inflation amid growing accusations that he has been ‘asleep at the wheel’.
Mr Bailey said: ‘To predict and forecast 10 per cent inflation and then say there’s not a lot we can do about 80 per cent of it is an extraordinarily difficult place to be. We have to recognise the reality of the situation that we face.’
Numerous concerns have been raised about the impact of working from home on the economy, especially in city centres.
Earlier this year, billionaire entrepreneur John Caudwell launched a scathing attack on working from home culture.
The founder of Phones4U said Britons were facing ‘enormous frustration’ due to areas of society not functioning properly and claimed it would be a ‘catastrophe’ for the economy if everyone worked from home.