Lord Higgins
Main Page: Lord Higgins (Conservative - Life peer)
Lord Sassoon
I am grateful to the noble Lord, Lord Bilimoria, for those comments. I can confirm that the MPC has indeed served the country well and that there are no plans to change its remit. I also agree that the word “disaster” is entirely appropriate and that the FSA got itself into a mindset in which there was far too much of a box-ticking approach and too little consideration for the big picture. But to be fair to the authority, when the whole question of Northern Rock blew up, it did then go on to make a candid, frank and rapid assessment of what went wrong.
I note the noble Lord’s point about the need for speed, and I think we should come back to that after my honourable friend the Financial Secretary to the Treasury has set out further details of the institutional arrangements.
Lord Higgins
My Lords, I congratulate the Government on transferring these responsibilities back to the Bank of England where they ought to have remained all along. I have just two questions, since I think that that is the convention on Statements.
First, my noble friend has referred to a “toolkit” for macroeconomic management. May I ask him yet again to ensure that the Debt Management Office, which was also transferred from the Bank of England to the Treasury, should be taken back into the Bank so that it can take an overall view of the monetary policy aspects of macroeconomic management? Secondly, my noble friend will have seen widespread press reports recently about another commission on banking—a private enterprise commission, so to speak. Have the Government had an opportunity to study its report and form a reaction to it?
Lord Sassoon
I thank the noble Lord, Lord Higgins, and share with him what he says about the Bank of England. It is clear that the macro-prudential toolkit will likely focus on capital liquidity and leverage, and it is for further consideration as to what other tools may be appropriate. On the other work that has been done by the Which? Commission and people in other countries, it should remind us that whether it is in the US, at the European level or by the cross-party Which? Commission here, just about everyone except the previous Government was getting on with looking at the structure of the industry. That emphasises why we should waste no time in getting on with the commission’s work now.