Labour backs TSC in row over BoE accountability

Labour has backed the Treasury select committee in a row with the Government over the adequacy of accountability measures at the Bank of England.

The TSC, BoE and the Government have clashed because the committee wants the BoE’s court of directors to be “radically overhauled” and made into a modern supervisory board before the BoE is given more power. The Government snubbed the committee’s call in favour of a less powerful “oversight committee”, proposed by the BoE itself.

An amendment to the Financial Services Bill, put forward by Labour, calls for the court to be turned into a “supervisory board”.

Shadow Treasury financial secretary Chris Leslie says: “We want a full debate about the current role and status of the Bank’s court and to hear fromTreasury minister Mark Hoban on why he disagrees with the TSC. It is very important we get the right checks and balances into the constitutional architecture of this new regulatory regime, starting at the top with some proper scrutiny within the Bank itself.”

The amendment, placed by Leslie and Shadow Treasury economic secretary Cathy Jamieson, says: “There shall continue to be a court of directors of the Bank but it shall be renamed the Supervisory Board of the Bank of England.”

Under current proposals the Court will be charged with overseeing the FPC’s “procedures”, but to enable it to act more like an executive board Labour want this widened to include its “activities”.

The amendments will be looked at during the bill’s committee stage which starts tomorrow. Until March 20, 20 MPs, including the Treasury financial secretary Mark Hoban, Leslie and Jamieson will go through the bill line by line debating proposed changes.