Brexit: Bank of England Report

Lord Davies of Oldham Excerpts

Thursday 29th November 2018 Lords Chamber

[Lord Bates]

Similar claims were made before the referendum took place. The choice that will be faced by Parliament—by the House of Commons on 11 December —is between the deal that the Prime Minister has negotiated and no deal. The focus should be on that. The Bank of England analysis and that produced by the Government yesterday to inform that debate show that the deal proposed is overwhelmingly better than no deal. That is what we will work towards.

[Lord Davies of Oldham (Lab)]

My Lords, in producing the report, the governor is fulfilling his obligation in preparation for the Treasury Select Committee, as the Minister has indicated. So let us have no nonsense about the fact that the governor is exceeding his powers in any respect. We would expect the Bank of England to be well informed about the present situation and to be in a position to offer warnings to the Government. The basis of the warnings is the preparedness of British industry and commerce to adjust to the catastrophic position of a no-deal Brexit and to the Government’s proposed position. Is it not clear that the Minister needs to convey to his colleagues that there is enormous anxiety about the lack of preparation for the development of deals, which will be far below the level anticipated when the negotiations began? The governor is quite right to have identified in his report the Bank of England’s anxieties.

[Lord Bates]

The noble Lord is absolutely right: the Bank of England has a statutory duty to inform its own analysis and to look at the worst-case outcomes to ensure that the economy is resilient to meet them. That is for the Financial Policy Committee and the Monetary Policy Committee to undertake, and they do so routinely. What is different about this analysis is that it was prepared at the request of the Treasury Committee in another place to inform the wider debate that it will have. Next week, the committee is taking evidence from the Chancellor of the Exchequer, and that will all be thoroughly debated ahead of the vote on 11 December.