My Lords, I thank all those who have offered me congratulations, which really should be to those in the Bank, the NAO and the Treasury who have been labouring long and hard on this. I have just been trying to oil the wheels as they go along. I am very nervous about the phrase “Peace in our time”, which one of your Lordships used. I get very nervous when that phrase is used, but I am very pleased with where we got to.
My noble friends Lord Higgins and Lord Young, and the noble Lord, Lord Myners, rightly pressed on the publication of the MoU. I can assure the House that the Government will provide an update on progress as the document develops, before the Bill has passed. Once complete, the MoU will be published and laid in the House Library. I do not want to tempt fate regarding the timing of this. However, as I said in my opening remarks, the process of drafting the MoU has only recently begun. I am sorry to say that I am not, therefore, in a position to share more details on this right now.
My noble friends Lord Higgins and Lady Noakes also raised the issue of what happens if the Bank and the NAO disagree. This amendment removes the court veto over what constitutes policy—the main concern of the House in Committee—and, instead, there is a requirement in the MoU for the NAO and the Bank to agree the process for resolving disputes. I will point out a few things here. It is important to note that much of the work which the NAO carries out across the public sector is governed by the National Audit Act 1983,
which does not contain a statutory mechanism for resolving disagreements between the NAO and the number of public bodies it oversees about the scope of its reviews. The NAO works constructively with those bodies to define the scope of its work without the need for codified dispute resolution processes. I therefore hope that, in the vast majority of cases, issues arising between the NAO and the Bank will be resolved without needing recourse to a formal process. However, in the unlikely event that a matter cannot be resolved, the amendment goes further than the National Audit Act by requiring that a formal dispute resolution process is set out as part of the memorandum of understanding. As I said, this will set out in more detail how the NAO and the Bank will act to settle disagreements and how those will be recorded and published, where appropriate.
My noble friend Lord Higgins also wisely raised the subject of quantitative easing. In the case of companies of the Bank which are carrying out indemnified activities, such as the asset purchase facility—the Bank’s QE vehicle—new Section 7C, inserted by Clause 10, will apply. In those circumstances, the Treasury has the power to direct the company of the Bank to send its accounts to the Comptroller and Auditor-General, who would then be required to conduct a financial audit of the accounts and issue an accompanying report.
I thank all noble Lords who have contributed to this and to making this process and the agreement possible.