A Labour amendment backing the Treasury select committee in a row with the Government over accountability measures at the Bank of England was defeated in Parliament this week.
It was defeated by nine votes to eight, with two members of the TSC, Jesse Norman and Mark Garnier, voting against it.
The TSC, BoE and the Government have clashed because the TSC wants the bank’s court of directors to be “radically overhauled” and made into a modern supervisory board before the bank is given more power under the new regulatory structure. The Government snubbed the call in favour of a proposal from the bank for a less powerful “oversight committee” to be set up under the court.
A Labour amendment to the Financial Services Bill considered by MPs this week aimed to force the Government into a U-turn.
Shadow Treasury financial secretary Chris Leslie says: “It is very important we get the right checks and balances into this new regulatory regime, starting at the top with some proper scrutiny within the bank itself.”
Under the current proposals, the court will be charged with overseeing the FPC’s “procedures”. Labour wanted this widened to include the over-sight committee’s “activities”.
Labour is also calling for the Financial Policy Committee to have more independent members.
Following calls from the Treasury select committee last year, Labour has tabled an amendment that would see the number of independent members increase from four to six, boosting the total membership from 11 to 13. It says this would ensure a “broad representation of practitioners and consumers”.