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Bank of England

Volume 575: debated on Thursday 13 February 2014

4. What recent discussions the Commission has had on extending the scope of the NAO’s auditing of the Bank of England and any consequent changes to the NAO’s budget. (902581)

There have been no recent discussions on extending the scope of the NAO’s role to auditing the Bank of England. As part of its wider discussions of the NAO’s budget in March 2012, the Commission considered the resource implications of the NAO’s new role in implementing the Financial Services Act 2012, in that it appointed the Comptroller and Auditor General to audit the Financial Conduct Authority. The Act did not change the audit arrangements for the Bank itself.

The National Audit Office can audit every single Government Department, the BBC and even the Queen. Why does my hon. Friend think that the Bank of England should be an exception?

I do not think that the Bank of England should be an exception. If the National Audit Office had audited the Financial Services Authority and the Bank of England during the financial crisis of 2007, there may well have been a very different result. When I was Chairman of the Public Accounts Committee, I campaigned long and hard for us—this Parliament—to audit the Bank of England, which we should do.

The House will be aware that the Governor of the Bank of England recently made some important comments on the currency issue if Scotland were to become independent, and it will be aware that other statements are to be made about that today. Would it not be a good idea for the National Audit Office to commission independent studies on the effects of currency decisions in relation to independence, which would certainly illuminate the debate both in Scotland and the rest of the UK?

I suspect that the National Audit Office would be very loth to be dragged into the debate on the future of Scotland. Clearly, if Scotland broke away, there would have to be completely different audit arrangements for the Financial Conduct Authority, which the House currently audits. Independence would indeed have implications for the National Audit Office.