Financial Services Bill

I thank the hon. Member for Chichester (Mr Tyrie)—or is he right honourable? If he is not, he should be. I thank him for his eloquent and powerful advocacy of new clause 1. The Treasury Committee has done sterling work in trying to cajole and persuade the very reluctant Bank of England to move from the 18th century to the 19th century. If we could speed things up a little through his new clause, that would certainly be welcome. The hon. Gentleman is not exactly asking for the moon on a stick; he is simply asking for the publication to a reasonable degree of the minutes of the court of the Bank of England—shock, horror—and for proper internal scrutiny in the Bank and a review of how it has performed. The hon. Gentleman is entirely correct that it is appalling that the Bank of England has never conducted a review of its role in the 2008-09 crisis. Every other branch of government, including the FSA, has done similarly and I would have thought that such a review would be a pretty basic prerequisite for moving on, especially if we are moving to a new era when the Bank of England will be incredibly powerful thanks to the great news powers that the Government wish to bestow on it. The Bank of England is an old institution. It started life in 1694 with just 17 clerks and a couple of gatekeepers, and it has subsequently been modernised by a number of Acts of Parliament. It is time, however, for it to become less of an honorific institution. The court should be made up of individuals who really take seriously the responsibility to scrutinise the performance of the executive of the bank, and the hon. Member for Chichester made his points perfectly well. As he says, it is like getting blood out of a stone. Some sort of oversight committee might, as the Minister said in Committee, be able to conduct retrospective reviews. The hon. Member for Chichester is entirely correct that it is ridiculous for only a record of the minutes to be published. I will support the hon. Gentleman's new clause, if it comes to it, but I suppose we should wait to hear what the Minister has to say. I shall not dwell on the new clause, though, as the group includes many other amendments which address a range of issues on the governance of the Bank of England and the new regulatory structures, and we have a very short space of time in which to debate it. I have, I think, 11 amendments in the group. I will not dwell on them all; I will focus on the key ones. Amendment 22 would insert a responsibility on the FPC of the Bank of England, requiring it to have regard to the Government's economic policy, including their growth and employment objectives. That is not an enormous requirement. The Bank of England Act 1998 gave the Monetary Policy Committee the same responsibility when making its decisions on monetary policy, and many central banks across the world, including the Federal Reserve, have to have regard to those important matters. We know that growth is flatlining under this Government and that they have a significant blind spot for the motor that we have to get going if we are to generate the revenues needed to kick-start the economy, but setting aside their political unwillingness to tackle the growth deficiency in our economy, there is also a major crisis of unemployment. If ever there were a time to ensure that these new and powerful institutions were focused on job creation, this is it. It is simply inadequate for the Minister to point to the part of clause 3 that states that the FPC is not authorised"““to exercise its functions in a way that would…have a significant adverse effect on the capacity of the financial sector to contribute to the growth of the UK economy””." That is not a significant protection—it is weak and caveated. We need the FPC to have proper regard to the impact its decisions can have, positively and proactively, on jobs and growth. That is why we tabled amendment 22. It is not something just dreamed up by the Opposition; the pre-legislative scrutiny Committee, some of whose members are here this evening, recommended that the measure be in the Bill. The FPC must be made to think about the impact of its decisions on the real economy; otherwise, it could become obsessively risk-averse and start to stifle credit availability.