The governor of the Bank of England, Mark Carney, has confirmed that the Bank of England’s Financial Policy Committee (FPC) does not have power of veto with regards to the Help to Buy scheme.
This follows an exchange of letters between the governor and the chairman of the Treasury Committee, Andrew Tyrie MP.
Earlier in the year two government ministers suggested that there was such a veto.
In his reply to Tyrie, Carney (pictured) did however state that the FPC can make recommendations to the government on Help to Buy at any time. The government was not under any obligation to follow any such recommendations, however.
Tyrie said: “This letter is a step forward: it brings some much needed clarity to the government’s Help to Buy Scheme. We now know who is responsible for what.
“The Bank of England has no power of veto over Help to Buy. Responsibility for it lies with the government.
“The Bank has clarified that it will offer advice only with respect to any risks that may be posed by the scheme to financial stability, and to the safety and soundness of firms. The Bank could already, and should, offer such advice whenever appropriate.
“It is now up to Parliament, and the Treasury Committee, to hold the respective parties to their distinct roles.”