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Lobby briefing: My life at the eye of the storm
JOHN McFALL reflects on his nine tumultuous years grilling our financiers as Chairman of the Commons Treasury Committee – and creating a ‘bridge’ to help restore public and political confidence in banking.
When I was first nominated for the Chairmanship of the Treasury Committee, back in 2001, I was surprised to be warned by a number of my colleagues: ‘You’ll be bored stiff’. I would be bogged down in endless macroeconomic minutiae, banking regulations and Inflation Reports, doomed never to reach the public interest, much less influence Government policy. How wrong!
Since the 2007 collapse of Northern Rock, those so-called macroeconomic minutiae have never been more interesting to the public. Banking regulation has been at the top of the agenda. The Treasury Committee was at the eye of the storm, as the only body able to hold to account, in public, the UK’s financial industry and authorities.
Our first in-depth report on the run-up to the crisis, in early 2008, had a huge influence on the subsequent public debate. Many of our recommendations became government policy. The Governor of the Bank of England said to the Committee this year that “the quality of the reports has been very high and has actually resulted in reform in the UK which perhaps has not been seen in other countries.”
We may have been in the right place at the right time – but the Treasury Committee was already adept at influencing policy and at holding key figures to account, long before 2007. Before the financial crisis hit the headlines, the Committee was able to take on high-profile topics such as globalisation, the economics of climate change, and the private equity industry.
Whilst its formal powers are limited, in practice the Committee has a wide scope for action, able to set its own agenda and to summon leaders and experts from the public and private sectors. Its influence derives not just from questioning a wide range of public figures and experts, but also from producing credible, non-partisan reports. Crucially, under my chairmanship, the Committee has produced unanimous reports.
The Committee used these powers to act as a ‘bridge’ between the public and the country’s leaders. Over the years, various powers have been delegated from the Treasury to independent agencies – beginning with independence for the Bank of England, and continuing with the recently created UKFI. This kind of delegation has its benefits, but it does risk diminishing Parliament’s power to hold the Government to account.
This is where the Treasury Committee played a vital role, questioning key figures, such as the Governor of the Bank of England and, of course, the bankers themselves, on behalf of the public. In 2009, during our Banking Crisis inquiry, we went even further, and encouraged the public to have a direct input into our inquiry. We received over 6,000 emails, and put their main questions and concerns to the authorities.
Given the considerable loss of trust in both the financial industry and Parliament, this direct link with the public is more important than ever. A strong economic recovery is dependent upon a recovery in the financial sector; it is therefore vital that public confidence in the banking system is restored. The Treasury Committee is in an excellent position to help achieve this.
I wish the new Committee well in carrying forward our work, so that the financial system better serves the needs of the economy and society.
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