FTAdviser.com

Advertising

The prime minister's masterstroke in establishing a national economic council cannot be faulted - in theory. But to set up an oversight committee made up with a majority of ministers is not only a waste of time, but sends all the wrong messages.

In theory, such a committee will provide the prime minister and senior ministers with an objective analysis of economic policy, leaving the decision-making to the politicians.

But to have an oversight committee made up of ministers is simply creating a collection of 'yes men' to rubber stamp the prime minister's own decisions.

Already there is the making of conflict, with the potential for the new NEC second-guessing the Bank of England and the Treasury, or, even worse, with the prime minister and his supporters using the NEC to offer counter-policies to the Bank or economic ministries.

Also, with plans to sit twice a week, the NEC will in time become another media circus with journalists and other experts scrutinising the minutes for the slightest sign of dissent.

You cannot help but think there is a coalition of powerful forces seeking to undermine Mervyn King, governor of the Bank of England. If they succeed it will be a short-term victory; but in the long term they will destroy all the promises of Bank independence granted in May 1997.