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Clause 1 - Deputy Governors

Part of Financial Services Bill – in a Public Bill Committee at 11:30 am on 21st February 2012.

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Photo of Mark Durkan Mark Durkan Shadow SDLP Spokesperson (International Development), Shadow SDLP Spokesperson (Work and Pensions), Shadow SDLP Spokesperson (Foreign and Commonwealth Affairs), Shadow SDLP Spokesperson (Home Affairs), Shadow SDLP Spokesperson (Justice), Shadow SDLP Spokesperson (Treasury) 11:30 am, 21st February 2012

I support the amendment, and it is important to stress that it makes it clear that appointments should be made by the Chancellor on the basis that the person appointed has knowledge and experience relevant to the court’s functions. Diversity is therefore not put first, above all else, but the amendment states that such an appointment

“would enhance the diversity of the composition of the Court” as an additional consideration. It is for the Chancellor to be satisfied on that point, and it is not to be tested by anybody else.

Diversity comes in many shapes and forms; gender, for example, is not particularly well-reflected in the court’s current composition, and there is the question of people’s sectoral insights and experience. Given the Bank of England’s key role on the economy, economic performance and its assessment, questions arise over whether a more rounded representation should be sought, rather than only from those with a fairly narrow experience that perhaps gives them highly-rated CVs as far as posts in the City are concerned, but not necessarily with regard to the country’s wider interests, or the broader economic interests for which the Bank, the court and the Governor are responsible.

Diversity should not be seen only in terms of gender or geography and, although geographical considerations are important, they should not determine everything. The amendment does not talk about a representative court, stating that there would have to be a governor for Northern Ireland, Scotland or Wales. It does not stipulate that in any way. God forbid that we create a West Lothian question for the court of the Bank of England; we would not want to do any such thing, but it is  important that future Chancellors, when making appointments, consider whether people’s broad experiences and insights cover the full range of the UK economy and its increasingly international perspectives and interfaces.

I can think of many people—not necessarily from Northern Ireland or the island of Ireland—who, by virtue of their business experience in the financial sector or other parts of industry, would have a strong affinity with the economic realities in Northern Ireland, or a strong knowledge of the banking business as it operates on the island of Ireland. Northern Ireland is in a bit of a twilight zone as far as the banking sector is concerned; there are some UK banks and some Irish banks, and we operate with that odd interface. I am not saying that the Chancellor should always appoint someone with direct experience of that situation. However, it is important to know, from time to time, that the Chancellor can say that some of those he has appointed have an affinity with or awareness of affairs in different parts of the UK—that not only applies to distinct regions such as Northern Ireland; it could relate to parts of England—and that should be shown in the composition of the court.

Such appointments would not be too hard a test for the Chancellor. Many boards and panels are appointed at a national level with people who can cover a range of interests and insights, because of their experience. Not everybody who is appointed will have had only one experience or one job. We are talking about people who will have been practitioners, not just in the financial sector, but at the coalface of industry as well. Some of them will have spent time in academia. Some, from any or all of those perspectives, will have come into contact with particular regional economies and operated in particular sectors of the market, whether it be industry or the property or housing market or any of those other areas of economic life that will be affected by the thinking and work of the Bank of England.

With that broad acknowledgment of the sweep of diversity that we are talking about, it is not too much to ask for some consideration to be given to that, alongside the important point that the person has knowledge or experience that is likely to be relevant to the court’s functions. It is not an override and it is not about making the court representative by parcelling up appointments to different regions; it is about ensuring that the Chancellor, in exercising his appointment function, has regard to the full needs and realities of the entire economy of what is called the United Kingdom.