Monetary Policy

(asked on 30th November 2023) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to his letters to the Governor of the Bank of England on the Remit and Recommendations for the Financial Policy Committee of 17 November 2022 and 22 November 2023, for what reason the bullet point on climate change and energy security in part C ii of the 2022 Remit and Recommendations is not present in that part of the 2023 Remit and Recommendations.


Answered by
Bim Afolami Portrait
Bim Afolami
Economic Secretary (HM Treasury)
This question was answered on 5th December 2023

HM Treasury ministers have regular discussions with their colleagues across Government on climate change, including on the implementation of the Green Finance Strategy. The breadth of work the Government is doing through the Strategy will reinforce the UK’s status as a leading centre for green finance.

The Chancellor of the Exchequer is responsible for setting the Remit for the Financial Policy Committee (FPC) once per year, and may also make recommendations regarding matters the FPC should consider as relevant to its primary financial stability objective and its secondary objective to support the Government’s economic policy.

The FPC's remit is an important accountability mechanism to ensure the Committee has a clear framework through which it can make policy decisions and consider any trade-offs. This is important given the complexity of the FPC’s work.

Yearly updates to the Remit ensure that it reflects the current economic context, the Government’s policy, as well as the FPC’s responsibilities and powers. Climate change is an important part of the FPC's remit: both due to the relevance of climate related risks to the Committee’s primary financial stability objective, and because increasing long-term energy security and delivering Net Zero are included as key parts of the Government’s economic policy and are therefore relevant to its secondary objective.

Reticulating Splines