Bank of England and Financial Services Bill [HL]

Debate between Baroness Noakes and Lord Myners

Tuesday 15th December 2015 Lords Chamber

[Lord Myners]

My Lords, I also congratulate the Minister and the parties involved on finding a pragmatic and workable solution to a problem identified in earlier discussion in this House. I also echo the point made by the noble Lords, Lord Higgins and Lord McFall. Proposed new Section 7E starts:

“The Bank and the Comptroller must prepare and maintain a memorandum of understanding”.

There is no mention of the word “publication”, yet in proposed new subsection (2)(d) “publication” is used. On the face of it, the absence of “publication” from the beginning of the section is intentional. As such, that surely should be unacceptable. I therefore urge the Minister at some later stage to persuade his colleagues in the other place that “publication” should be included, and to give this House some reassurance now that it is his intention that the memorandum of understanding should be published. Otherwise, the public will not have the confidence that they seek in clarifying this issue.

[Baroness Noakes (Con)]

My Lords, the Comptroller and Auditor-General and the National Audit Office are in agreement with this, but I would like to clarify the effect of proposed new Section 7E(2)(d). It allows for the publication of views where a matter in dispute cannot be resolved. That implies that there would be no agreement as to whether a particular audit could take place. That allows the Bank of England a backdoor power of veto if the arrangements are such that there is a possibility that even a dispute resolution procedure, as provided for under proposed new paragraph (c), results in there not being agreement. Therefore, is it possible that the Bank could de facto operate a veto?