Financial Services Bill

Amendment 15 inserts a new subsection into Clause 2. This amendment also concerns the minutes of the Council for Financial Stability, requiring them to record the views of each of the members of the council and the extent to which they are in agreement. The Government have lauded the transparency associated with the new Council for Financial Stability and this amendment merely asks the Government to put their money where their mouth is. The Minister will doubtless say that this should be dealt with in the terms of reference which will be issued under Clause 1(5). As the Minister knows, we are not impressed with leaving matters to this statement because in effect it leaves everything to the discretion of the Treasury from time to time, since it is for the Treasury to determine what goes in that statement. The draft terms of reference state that, ""as necessary, minutes will attribute comments to individuals"." Noble Lords will immediately spot the weasel words, "as necessary". Who is to say what is necessary? What criteria will be used when judging necessity? There is nothing in the Bill to insist on that. The terms of reference also refer to attributing comments to "individuals" not members of the council. This appears to be deliberate. The terms of reference show that, apart from the three people who are members of the council, attendance can include a deputy or senior colleague for each member, who attend even if the key players also attend; a private secretary for each member; and the secretariat. In practice, it appears that even more attend. The minutes for the first meeting of the council in January show that 11 people attended in addition to the three principles. Seven of the 11 were, perhaps unsurprisingly, from the Treasury. I could not fit most of them into the categories described in the terms of reference. The minutes of the first meeting of the Council for Financial Stability in January show views being attributed to many of these attendees. There is clearly no intention to confine the minutes to the council proper. It is interesting to learn that the noble Lord, Lord Myners, had a lot to say during the meeting but it is not a surprise. Yet the purpose of the minutes is to record what the members of the council said and agreed or otherwise. The Bank of England Act 1998 requires the minutes of the MPC to record the voting preference of each member. It does not require the views of individual members to be attributed. That issue has been debated from time to time. The important function of the MPC is to decide on the interest rate and, more recently, its approach to quantitative easing. It is that decision which must be in the public domain plus the balance of opinion within the MPC. There is a less obvious decision point as regards the Council for Financial Stability—or if there was one, it would almost certainly not be published for being market sensitive. There is a case for knowing what the views are of the top people at the Treasury, the Bank and the FSA on the issues discussed. Let us suppose, for example, that the Bank of England’s financial stability review highlighted a new concentration of risks in financial markets. Are we not entitled to know what the Treasury and FSA think, or if they agreed with the Bank? That is all my amendment would require. I beg to move.