Committee questions Treasury powers to block public reviews
30 January 2017
Chairman of the Treasury Committee, Andrew Tyrie MP, writes to Philip Hammond MP, Chancellor the Exchequer, on the Treasury's powers to block public reviews.
Clear conflict of interest
Commenting on the Committee's letter to the Chancellor, Andrew Tyrie MP, Chairman of the Treasury Committee, said:
"It took considerable pressure from the Treasury Committee just to ensure that there were public accountability reviews into the failures of RBS and HBOS.
The Financial Services Act 2012 made some progress, by creating the power for either the Treasury or the regulators to commission reviews in cases of future financial or regulatory failure. The Act, however, remains defective in that it gives the Treasury the power not just to commission an inquiry, but also to block one, even if it is demanded by the regulators, the Treasury Committee and others.
Given the Treasury's central role in crisis management and financial regulation, this power represents a clear conflict of interest. It could be used by the government to protect itself, its actions and other public bodies from legitimate scrutiny. Far from opening up this area to much needed sunlight of public scrutiny the current Act, in some circumstances, curbs it. That won't do.
The presumption in law should probably be reversed. The Treasury should have no blocking power, except in a limited range of narrow and clearly defined circumstances. When exercised, the blocking power should trigger a debate on the floor of the House. The Chancellor should reconsider."
Background
- Financial Conduct Authority response to the recommendations made by the Treasury Select Committee - Review of the reports into the failure of HBOS plc
- Prudential Regulation Authority response to the recommendations made by the Treasury Select Committee - Review of the reports into the failure of HBOS plc
- Government Response: Review of the reports into the failure of HBOS (PDF 508 KB)
Further information
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