Earl of Effingham
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Financial Services Reform
Earl of Effingham Excerpts(4 days, 6 hours ago)
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Lord Livermore (Lab)
I am always grateful to hear from my noble friend on all these topics. I disagree with him, as always. He said that the 2008 reforms are being repealed. I cannot see anywhere in the Chancellor’s statement where that is the case. As I have said clearly and as the Chancellor has said clearly, the protections that were put in place were the right things to do with better protections for consumers and more accountability in the system. My noble friend said that there would not be enough money to bail out banks in a crisis. We have been clear that the minimum requirement for own funds and eligible liabilities regime plays a crucial role in maintaining financial stability and ensuring that taxpayers do not pick up the cost of bank failures. However, it is important that the regime is proportionate so that smaller banks can scale up, expand and support lending to UK households and businesses. As my noble friend will know, the Bank of England has announced the outcome of its MREL consultation.
The Earl of Effingham (Con)
My Lords, the Minister mentioned how interest rates have been cut, and other noble Lords on the Government Benches have mentioned the same thing. Does he agree that the Bank of England dictates monetary policy, not the Government, and that the reason why the Bank of England has been cutting interest rates is because of clear evidence of a slowing economy, not because the Government’s policy is working?
Lord Livermore (Lab)
As the noble Earl says, the Bank of England has operational independence to achieve the inflation target set by the Government. We absolutely support it in the work that it does to do that. However, it is absolutely the case that the Government’s fiscal policy has created the space for the Bank of England to cut interest rates. At the risk of repeating an old favourite of ours, if we still had a £22 billion black hole in the public finances, it would not have had the space to do that. It is obviously right that fiscal policy and monetary policy work together.