Profile: Lord George, former governor of the Bank of England

Lord Edward George, former governor of the Bank of England

Lord Edward George

By turns bankers are cast as aggressive, ruthless and hard-nosed but this
image is immediately divorced from reality on meeting Lord Edward George, former
governor of the Bank of England until 2003.

Since parting company with the Bank, Lord George has immersed himself in
philanthropy using his reputation and list of illustrious contacts from his
banking career to highlight the causes of social enterprise across the UK. ‘I
was there for over 40 years and loved every minute of it, but I’ve moved on and
have become more interested in other things. I don’t really miss it,’ he says of
the Bank.

Interestingly it could be argued that Lord George himself owes much to
philanthropy when you consider his background. Perhaps this is the reason he now
dedicates so much time to good causes – rather a perfect full circle. But he
dismisses the analogy of completing a neat circle. ‘It’s another phase in my
life rather than going back,’ he says. ‘Of course, would I take an interest had
I not experienced this in my life?’ he adds rhetorically.

Lord George, the son of a postman, gained a scholarship to attend the eminent
and architecturally stunning Dulwich College, one of the London-based private
schools originally intended to educate the poor as well as the rich. He went on
to gain a place at Emmanuel College, Cambridge in 1962 before joining the Bank,
where he presided over one of the most stable economic periods of modern times
earning him the moniker ‘Steady Eddie’.

During his time at the Bank he was seconded to Moscow to study the Soviet
economy and financial system.

‘It wasn’t working well,’ he says understatedly. ‘That was a seminal
experience for me. I came back to the Bank of England and what I discovered was
that we had central control as well. That made an impact and I became conscious
of that. I have watched as control has been devolved to those on the ground. We
have moved to a market-based economy and that’s unleashed the enthusiasm,
energy and motivation of the population.’

On this basis, improving the flow of philanthropy is not so removed from his
work as governor of the Bank, he claims, as it is his long-standing interest in
central control where he feels he can make a difference concerning social
enterprise and charitable giving.

‘One of things I was always interested in, but never able to pursue, was how
do you balance central control with the need to disseminate nationally? The
question that interested me was: how it related to the global economy?

‘We have to give the local market autonomy but you have to keep some central
control. That’s why I joined the Nestlé board and Rothschild board too,’ Lord
George says.

It was his move down to Cornwall after retirement that first brought him into
contact with the Community Foundation Network, which effectively works as a
match-maker between charitable donors and beneficiaries across the UK.

The CFN is a good example of what Lord George considers the perfect blend of
central control balanced by national autonomy. The CFN sits at the head of a
maze of trusts, large and small, dotted around the country that are run by local
people for local causes.

‘It’s a charitable funding wholesaler. It raises money, invests that money
and passes the proceeds onto charities. I became very enthusiastic about it, and
was invited by Steven Hammersley, chief executive of the CFN, to become honorary

A lot to give

Lord George says there is a lot of money out there from organisations and
wealthy individuals and there are a great deal of charities, particularly
smaller ones but both parties feel it’s a minefield either deciding where to
invest the money or where to look for income.

‘There are so many charities and so many potential sources of money. The
smallest charities on the whole need someone who can steer them to the right
source of money. For those that want to put money into a charity it’s a jungle
for them too. The CFN is tremendously helpful in finding the path from both ends
through that jungle.’

Over the past 10 to 15 years Britons have become more charitable, giving an
estimated total of £8.9bn yearly, an average donation of £15.28 per person per
month, according to the UK Giving 2005/06 survey conducted by the National
Council for Voluntary Organisations, the largest umbrella body for UK charities.
The issue that has drawn Lord George in is whether the money is well targeted or
simply going to those charities that shout the loudest.

Lord George brushes aside the idea that the third sector could be better
managed by government in dividing up the money.

‘Government can’t be expected to address all of these needs at a local level.
It’s not realistic that in Whitehall you can identify all the needs, nor satisfy
them from the centre. Then what you find is that a lot of support goes to those
who didn’t’ need it and not those that did. I’m not critical of what government
is trying to do, but politicians need a lot of help in this.’

Heart of the matter

This isn’t Lord George’s first foray into charitable work. As governor of the
Bank, he became increasingly aware that prospective employees were keen to find
out about the Bank’s social responsibility agenda.

Aware of this growing interest, Lord George talked to other organisations in
the Square Mile to see what they were doing in terms of corporate social
responsibility. He says he was pleasantly surprised to find that many banks and
other financial houses were already working with the local community around the
City, ironically one of the most depressed and poorest areas in the UK.

On that basis they decided to formalise the work under a body called ‘The
Heart of the City’ with the aim of encouraging businesses, which ‘have
tremendous privileges and is one of the richest areas in the world’, to work
with the local community.

Of the current credit crunch Lord George is confident the British economy is
in safe hands under Mervyn King, his successor. ‘A lot of this sophisticated
development of instruments has happened since I retired. But I thought it was a
positive thing as it spreads risk and doesn’t focus it on the banking sector.
What I wasn’t aware of was that the risk isn’t understood by those taking it

But he says as a word of warning to those now wanting the Bank to solve a
crisis they had no part in creating. ‘If you charge in and make it go away
tomorrow it would encourage the taking on of risk. There’s a balance that’s
needed. I’m certain those in charge are monitoring it closely and will make the
right judgement as and when.’

Despite his move down to the rural idyll of Cornwall clearly Lord George is
not one to pack up his life and lounge in a deckchair. Apart from his work for
the CFN, which keeps him in close contact with business leaders and bankers –
albeit in the different role of fundraiser and charity figurehead – Lord George
made a clear decision to remain in the loop of the business world by taking
board positions on both Rothschild and Nestlé. With these roles he hopes to put
back in as much to business as to society that he feels he gained.

If only all business leaders took their social responsibilities with as much
gravity as Lord George then the balance he is seeking in society and the economy
would be much more quickly redressed.

How it all began

Lord George became governor of the Bank, at the time not independent, under
the Tory Party led by John Major with Ken Clark as chancellor of the Exchequer.

When in 1995 Lord George told the chancellor he wanted to have regular
meetings with the opposition, Clark was supportive.

So for two years before Labour won the elections, ending almost 18 years of

Conservative rule, Lord George held regular meetings with Gordon Brown and
occasionally Tony Blair in which they discussed the possibility of making the
Bank independent and what form it should take.

‘It was important in two respects, in the structure and in giving me the
opportunity to gain confidence in Gordon. I knew I wouldn’t gossip with the
other side. I didn’t press irrelevant questions like “when will you do it?”’

Lord George says he was genuinely taken by surprise but nonetheless
exceptionally pleased, when Labour took the unprecedented step of making the
Bank independent four days after winning the landslide election in May 1997.

‘This was the final piece in the jigsaw. This moved from central control to
more local. It opened the way to total transparency and the monetary policy
committee,’ says Lord George.

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