U.K. opposition Labour Party leader Ed Miliband said the government was right to use a record pay packet to lure Mark Carney to head the Bank of England.
Bank of Canada Governor Carney, who was Chancellor of the Exchequer George Osborne’s choice for the BOE job, will get basic pay of 480,000 pounds ($735,000) a year, more than the combined salaries of U.S. Federal Reserve Chairman Ben Bernanke and European Central Bank Governor Mario Draghi. On top of that, he’ll get a 250,000-pound annual housing allowance.
Miliband was speaking in an interview in The Hague today at the end of a tour of northern European countries during which he’s called for a more equal distribution of wealth, something he said doesn’t necessarily mean higher overall taxes. In the same interview he attacked high pay for failure in financial services, arguing that isn’t a contradiction.
“The role of governor of the Bank of England is an incredibly important role for all of us,” Miliband said, making his first public comment on Carney’s pay. “It really is in our interests that that job is done well. It would be easy for me to sit here and criticize George Osborne. Actually, I think by common consent it was right to get him.”
Carney was asked to defend his pay by lawmakers on the U.K. Parliament’s Treasury Committee when he appeared before them in London on Feb. 8. He said the allowance was comparable with those awarded to other executives.
The incoming governor’s basic salary is about 50 percent more than the maximum he could earn at the Bank of Canada and 57 percent higher than that of the current governor, Mervyn King. He’ll also get an allowance of 30 percent of salary in lieu of a pension.
Draghi makes about 371,000 euros ($496,000) in base compensation, not including the use of an ECB residence in Frankfurt, while Bernanke has a salary of $199,700.
In today’s interview, Miliband said his party’s announcement last week that if elected in 2015 it would introduce a “mansion tax” on high-value properties isn’t a sign he’s planning overall tax increases.
“We’ve said that we want tax cuts for low and middle- income families,” he said. “That’s a sign of a fairer tax system, it’s not about higher taxes.”
Labour has been ahead of Prime Minister David Cameron’s Conservatives in the polls for most of the last year. The general election isn’t due until May 2015.
On high pay, Miliband said while the country needs entrepreneurs, he opposes rewards that aren’t deserved.
“We’ve learned from the financial crisis that there were people walking off with tens of millions who weren’t creating value for our economy but destroying value in our economy,” he said. “People at the top have responsibilities, just like people at the bottom. That’s the responsibility to pay their fair share of taxes and to be part of society.”
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