Bank of England and Financial Services Bill [Lords]

Debate between Baroness Laing of Elderslie and Harriett Baldwin

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 19th April 2016 Commons Chamber

[The Economic Secretary to the Treasury (Harriett Baldwin)]

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With this it will be convenient to discuss the following:

Amendment (a) to new clause 12, after paragraph 2A(1)(b) insert—

“(1A) If, before the term of office has begun, the Treasury Committee reports to the House that the appointment should not be confirmed, the Treasury shall not continue with the appointment unless the House of Commons resolves that the appointment should be confirmed.”

Amendment (b) to new clause 12, at end insert—

“In Schedule 1ZA to the Financial Services and Markets Act 2000, in paragraph 3(1), at the end insert “, except in the case of the chief executive of the FCA, who shall be appointed for a reappointable term of five years”.”

New clause 1—Chief Executive of the Financial Conduct Authority—

‘(1) Schedule 1ZA of the Financial Services and Markets Act 2000 is amended as follows.

(2) After paragraph 2(2) insert—

“(2A) The Treasury shall not appoint a chief executive without the consent of the Treasury Committee of the House of Commons.”

(3) After paragraph 4(1) insert—

“(1A) But a chief executive appointed under paragraph 2(2)(b) is not to be removed from office without the consent of the Treasury Committee of the House of Commons.”

(4) After paragraph 27 insert—

“References to Treasury Committee

28 (1) Any reference in this Schedule to the Treasury Committee of the House of Commons—

(a) if the name of that Committee is changed, is to be treated as a reference to that Committee by its new name, and

(b) if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, is to be treated as a reference to the Committee by which those functions are exercisable.

(2) Any question arising under sub-paragraph (1) is to be determined by the Speaker of the House of Commons.””

New clause 2—Composition of the Court of Directors of the Bank of England—

“In making nominations to the Court of Directors of the Bank of England, the Chancellor of the Exchequer must have regard to the importance of ensuring a balanced representation from the nations and regions of the United Kingdom.”

New clause 3—Change in title of the Bank of England—

“The Bank of England shall be known as the Bank of England, Scotland, Wales and Northern Ireland; and any reference in any enactment to the Bank of England shall be taken as a reference to the Bank of England, Scotland, Wales and Northern Ireland.”

New clause 5—Sterling Central Bank—

“The Bank of England is renamed the Sterling Central Bank.”

This new clause would change the name of the Bank of England to reflect its position as the UK central bank and the UK’s shared currency.

New clause 6—Membership of the Monetary Policy Committee of the Bank of England—

“(1) Section 13 of the Bank of England Act 1998 is amended as follows.

(2) At the end of subsection 2(c), add “of whom one each must be nominated by the Scottish Government, the Welsh Assembly Government and the Northern Ireland Executive.”

This new clause seeks to ensure representation of the four nations of the United Kingdom on the Monetary Policy Committee.

New clause 7—Objectives of the Monetary Policy Committee—

“After subsection 11(a) of the Bank of England Act 1998 there is inserted—

“(b) maximum employment, and.””

This new clause would expand the mandated objectives of the Monetary Policy Committee to include maximum employment.

New clause 8—Bank of England Accountability and Devolved Legislatures—

“Within three months of the passing of this Act, the Chancellor of the Exchequer shall lay a report before both Houses of Parliament on the merits of ensuring that the members of the policy committees of the Bank of England, including the Governor, appear before the respective economy committees of the devolved legislatures of the UK at least once a year.”

New clause 13—Freedom of Information—

“(1) Schedule 1, Part VI to the Freedom of Information Act 2000 is amended as follows.

(2) In the entry relating to the Bank of England, leave out all the words after “England.””

Amendment 6, in clause 9, page 7, line 19, at end insert—

‘(6A) The Comptroller may enquire into the Bank’s success in achieving its stated policy objectives but shall not enquire into the desirability of such objectives having been set.

(6B) The Comptroller shall submit reports arising from the exercise of his powers under subsection (6A) to the Treasury Committee of the House of Commons (or any successor committee exercising the same or equivalent functions).

(6C) The Comptroller shall lay before Parliament, and publish, each report arising under subsection (6B) promptly unless, in the opinion of the Treasury Committee, publication of a particular report would be likely materially adversely to affect the stability or functioning of the UK’s financial or banking system.”

Amendment 7, in clause 11, page 12, line 2, at beginning insert

“Subject to section 7ZA(6A) of the Bank of England Act 1998,”

Government amendment 3.

[Harriett Baldwin]

I would like to start by emphasising that the Treasury Committee is an esteemed Committee of this House and provides exceptional scrutiny of the Government and their regulators. Through its programme of pre-commencement hearings, it questions appointees to several posts before they start work. After appointees have started, they can expect to appear regularly before the Committee, and the public can expect the Committee to hold appointees firmly to account.

The Government welcome that scrutiny of appointees—it is a critical democratic function. That is why we have tabled new clause 12 to ensure in statute that the Committee always has the chance to scrutinise a new Financial Conduct Authority chief executive before they start work.