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Clause 1 - Deputy Governors

Part of Financial Services Bill – in a Public Bill Committee at 10:45 am on 21st February 2012.

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Photo of Chris Leslie Chris Leslie Shadow Minister (Treasury) 10:45 am, 21st February 2012

On that issue, we need the assistance of the Government and officials to draft improved governance arrangements. It would be invidious for me to attempt fully to rewrite the interstices of the Bank of England’s constitution. The amendment is a useful proxy for the Committee to consider and possibly vote on—the Minister may accept it, if he so wishes—to signal that, having considered the provision, such a change needs further development and could be reconsidered on Report or in the other place. I thought that we should discuss, as a matter of principle, the question of whether we continue with the current arrangements for the court of the Bank or create a more effective supervisory board.

Most institutions of such a magnitude and importance have governance arrangements for internally challenging and scrutinising their own performance. Banks have modern corporate governance boards. It is a moot point to question their efficacy, but they are there. The UK code of corporate governance also makes a set of recommendations about governance arrangements, which could be brought to bear properly in the definitions of how we might want a decent supervisory function. Local authorities have scrutiny committees, as many of my hon. Friends may know. Police authorities have proper scrutiny and governing arrangements. I could go on and, no doubt, my hon. Friends might wish to do so as well.

It is an anomaly therefore not to have a court at the top of the Bank of England with the flexibility to provide that level of supervision. I am delighted to see that the hon. Member for Hereford and South Herefordshire is in Committee with us today. He, I think, is the only hon. Member here—he is talking to the Government Whip at the moment—who served on the pre-legislative scrutiny Committee. I wonder whether I can attract his attention for a moment.