UK

Mervyn King's Bank Of England Leaving Presents Include £10,000 Painting Of Himself

15/08/2013 09:44 BST | Updated 15/08/2013 09:59 BST
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LONDON, ENGLAND - JUNE 19: Governor of the Bank of England, Mervyn King, listens to speeches during the 'Lord Mayor's Dinner to the Bankers and Merchants of the City of London' at the Mansion House on June 19, 2013 in London, England. Mervyn King will address the Mansion House audience for the 10th and final time as Governor of the Bank of England before he is replaced in the post by former Bank of Canada Governor Mark Carney on July 1, 2013. Prime Minister David Cameron has announced that the outgoing Bank of England Governor Sir Mervyn King is to be made a Life Peer. (Photo by Oli Scarff - Pool/Getty Images)

Mervyn King was given a £10,000 painting of himself as a leaving present by the Bank of England, along with a £597 silver napkin and a £2,505 bust of German writer Johann von Goethe.

The £13,000 pile of leaving presents for the outgoing governor, who formally retired on 1 July when Mark Carney took over as Bank of England Governor, has drawn fierce criticism.

Labour MP George Mudie, a member of the Commons treasury committee, said: “If I compare what happened to him and what happens to a nurse or teacher when they retire, I think ordinary people will be outraged at a time of austerity that such money should be lavished on someone who has a £198,000 pension.

“It is completely inappropriate, particularly in terms of austerity.”

The portrait of Lord King is believed to be hanging outside the office of his successor Mark Carney, along with portraits of all the previous governors.

The bust of von Goethe was reportedly chosen after taking soundings from Lord King's family and friends.

The Bank of England paid for King's leaving presents, along with hosting three events to mark his departure at the Bank, costing more than £10,000, which also ran up a £1,501 bill for flowers and invitations.

The Bank said the governor was given the £597 silver napkin ring as a customary present for departing senior Bank officials, as it was a replica of those normally used in the directors' dining room.

The Bank said: “As with previous retiring governors, the bank commissioned a portrait of governor King, and presented him with a copy. This cost £10,000. In addition, the governor received a replica bust of Johann von Goethe. This cost £2,505.

“These costs were met by the bank, with the approval of the court of directors.”

Sir Mervyn has a considerable pension after working at the Bank since 1991, with the last figures published saying it was worth £198,2000 a year, however it is likely to be worth more.

The Bank is not funded by taxpayers, but draws its funding from sources like the wider banking sector. The main source is known as a "cash ratio deposit", through which banks deposit cash interest-free with the Bank, which sinks it into investments that pay interest. The interest earned from the deposits is used by the Bank in order to fund its operations.

However, the coalition's 39% stake in Lloyds and 81% share of the Royal Bank of Scotland mean King's gifts were in theory funded partially by taxpayer contributions.

Matthew Sinclair, chief executive of the TaxPayers’ Alliance, said: "Taxpayers and savers continue to pay for Bank of England policy so they will find it particularly egregious they are also paying so much for the governor’s goodbyes."

The Bank of England was forced to disclose King's leaving arrangements after a Freedom of Information request from MSN UK.