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Bank of England

Volume 756: debated on Thursday 30 October 2014


Asked by

To ask Her Majesty’s Government whether they will rename the central bank of the United Kingdom, “The Bank of England and of the United Kingdom”.

My Lords, having begun life in 1694 as a commercial bank, the Bank of England predates the formation of the United Kingdom itself. Of course, the Bank’s role is not limited to England and it acts as the central bank for the whole of the UK. However, to change its name would represent a break from over 300 years’ worth of history and the prestige which it carries as a global brand.

My Lords, given the particular saliency of the currency issue in the recent Scottish referendum, would it not be a wise, inexpensive and inclusive act to extend the title of Britain’s central bank to the “Bank of England and of the United Kingdom”, thereby properly recognising the reach and relevance to all four nations of the United Kingdom of our own central bank?

A notable feature of the referendum campaign was that Alex Salmond was desperately keen to keep the comfort blanket of the Bank of England. As far as I am aware, he never suggested that its name should change.

My Lords, given that the Bank of England has responsibility for ensuring that other banks and financial institutions have proper systems and back-up systems in place, what action has been taken following the failure of the CHAPS system—for which the Bank of England is responsible—that resulted in many people being unable to buy their houses on the day concerned; quis custodiet ipsos custodes?

Quite, my Lords. The Financial Services Act gave the Bank of England new powers in this area. It is conducting an investigation to see what happened in that unfortunate case and what lessons can be learned for the future.

I congratulate my noble friend for raising this Question, but I am sorry to say that I disagree with him. Changing the name of the Bank of England would be economically very damaging to our country. Is the Minister aware that there is a lesson to be drawn from this? It is mainly that making constitutional changes on the hoof is not the right way to do this sort of thing. The next time he sees his right honourable friend the Prime Minister, will he tell him that the way to go on in this area is to think before you speak and not the other way round?

My Lords, whatever one can say about the history of constitutional change in the UK, it has not been characterised by great speed. While there is now considerable urgency in dealing with consequential constitutional change in both Scotland and the rest of the United Kingdom, it will require a commitment by many people across all parties to bring that about—which in the past has been conspicuously lacking.

My Lords, if there is to be any change, would not the name “Bank of Britain” be more solid, simple and straightforward?

It might be, my Lords, but as I said in my initial Answer, I suspect that there will not be any change.

My Lords, Her Majesty’s Opposition are in favour of the retention of the name “Bank of England”. However, the Minister said that there is some urgency about future action, so will he say whether the Treasury has made any progress, and will he give us an update on that progress, in looking at the financial consequences of further devolution of income tax?

My Lords, as the noble Lord will be aware, the various proposals on the table for the devolution of income tax were set out in the Command Paper that was published earlier in the month. The exact nature of further devolution of income tax is under consideration in the Lord Smith process. As part of that, the financial and political consequences of various possibilities in respect of income tax are being actively considered.

My Lords, is there not much to be said for the old adage that if it is not necessary to change, it is necessary not to change?

My Lords, that is an extremely sweeping statement and I would need prior notice before I felt that I could absolutely agree with it in every case.

My Lords, in 1999, Alex Salmond described the Bank of England as a “millstone round Scotland’s neck”. Fifteen years later, he was pledging his love and fidelity to it. Does that not prompt the question that, if it was good enough for Alex Salmond as the Bank of England, it is good enough for the rest of us?

My Lords, I agree with the Government’s view about retaining the well tested name, but would the Government also consider retaining in full, or restoring, the Bank of England’s lender of last resort powers, which have served this country’s banking system well for 150 years?

My Lords, the key thing is the Bank of England’s role to protect and enhance stability of the financial system. I think that the legislation that we have passed in recent years gives the Bank wide powers in almost every respect to enable it to do that.