My Lords, I would like to join in this debate because, although I respect the expertise of the noble Baroness who has just contributed, I am rather more in sympathy with the arguments of my noble friend Lady Worthington and the noble Baroness, Lady Kramer. I hear what was said about placing obligations on the Bank, but we should also appreciate that we have the benefit of the present governor—on whom I have not lavished many plaudits this afternoon as I was rather concerned about the future structure of the Bank, for which he will be responsible. Nevertheless, we all recognise the governor’s merits in taking a wider perspective on aspects of the economy than has perhaps been the case heretofore. Certainly, the speech that he made not so very long ago, in September, to Lloyd’s of London, in which he said that climate change is the “tragedy of the horizon”, ought to wake all of us with alarm, but also make us ask how we can adjust and make responsive our institutions to the anxieties that obviously flow from the developing and clearly established dangers of climate change.
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I realise that I may not be pressing at an open door when I deal with the Minister in his area. After all, he belongs to an Administration who have been presenting a series of closed doors to green policies in recent months, with the end of subsidies for offshore wind production; the granting of the right for fracking to be conducted in our national parks; the end of the Green Deal insulation for our homes; and the end of the zero-carbon standard for housebuilding. All those may look like small beer against the general perspective, but they are an indication that the Government are still far from persuaded of the significance of climate change, which stands somewhat in contradistinction to what the Governor of the Bank of England said in September. On this occasion, my support is with the governor.
Although the Financial Policy Committee will take into consideration systemic risks attributable to structural features, those attributable to the distribution of risk within the financial sector, and unsustainable levels of leverage, debt or credit growth—and I would not in any way, shape or form detract from the significance of those cardinal objectives that the committee is obliged to consider, which are well within the rubric that it has had for some time—I hope that, just as we seek to establish a somewhat longer-term perspective for our financial institutions on investment and the development of the economy, in that longer term we will also look at systemic risk which is some distance away but which, unless we take action now, will have
calamitous implications for the economy and, of course, the wider world. While the Minister stresses the committee’s significance in its work of managing financial risks in the shorter term, as I am sure he will, I hope he will also accept that it would be nothing but advantageous for the committee to accept the signal from the governor himself that everyone concerned with the future welfare of our country needs to take into account the issues of climate change and how we can moderate it, because a failure to do so will render a great deal of our short-term measures wholly and totally inappropriate.