'The scope and limits of the Bank's role in this scheme need a good deal of clarification,' Treasury select committee chair Andrew Tyrie writes to governor Mark Carney
Andrew Tyrie, the chair of the cross-party Treasury select committee, has written to Bank of England governor Mark Carney, demanding to know more about his role in scrutinising the chancellor's controversial Help to Buy mortgage subsidy scheme. "The scope and limits of the Bank's role in this scheme need a good deal of clarification, both to safeguard the Bank's authority to act in fulfilment of its statutory responsibility for financial stability and to safeguard its independence," Tyrie said.
George Osborne announced in September that the financial policy committee – the arm of the Bank with the job of preventing house price bubbles – will be able to scrutinise Help to Buy next September, when it has been running for a year, instead of only at the end of its three year life, as he had initially envisaged.
But Tyrie said there is not yet sufficient clarity about whether the FPC will be able to call a halt to the scheme before three years are up.
In the letter, Tyrie also asked what advice the Bank had given on the design of the scheme; and whether, given its enhanced role in scrutinising it, the FPC now sees itself as a "co-designer" of Help to Buy.
The scheme, which is offering taxpayer-backed mortgage guarantees for homebuyers unable to raise more than a 5% deposit, has been widely criticised by economists and Carney's predecessor Lord Mervyn King. A Bank of England spokeswoman said, "we will respond in due course".
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