Andrew Tyrie calls for Mark Carney to clarify Bank of England’s role on Help to Buy

Andrew Tyrie calls for Mark Carney to clarify Bank of England’s role on Help to Buy

Andrew Tyrie has called for Mark Carney to confirm that the Bank of England does not have the power to shut down the Help to Buy scheme, as some ministers have claimed.

The chairman of the Treasury Select Committee has written to the Governor warning him that the Bank’s duties in overseeing the controversial scheme need a “good deal of clarification”.

The letter cites two occasions when ministers, including Nick Clegg and Grant Shapps, have tried to rebuff concerns about Help to Buy by claiming that the Bank of England has the power to intervene if it feared another housing bubble.

“Can you confirm that, contrary to the remarks of several ministers, the FPC does not have a veto on any decision to maintain the scheme”, Mr Tyrie has asked in the letter.

Last month Mr Clegg agreed that Help to Buy scheme needed to be carefully monitored and that “if [Bank officials] don’t think it’s working, or it’s inappropriate, they can change it or even recommend it is stopped altogether”.

Mr Tyrie points out that this is contrary to Lord King’s view who, when he was Governor, said the FPC would only look at Help to Buy “solely on the basis” of its impact on financial stability. He asks for confirmation that the Bank’s advice on Help to Buy “will relate specifically to its likely effects on financial stability and not to its likely effects on home ownership”. More pointedly, he asks: “Does the Bank of England consider itself a co-designer of the Help to Buy scheme?”

Mr Tyrie said: “The scope and limits of the Bank’s role in this scheme need a good deal of clarification, both to safeguard the Bank’s authority to act in fulfilment of its statutory responsibility for financial stability and to safeguard its independence.”

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