HC Deb 25 July 1985 vol 83 cc1293-4
6. Mr. Alton

asked the Chancellor of the Exchequer what further discussions he has had with the Bank of England concerning Johnson Matthey Bankers.

14. Mr. Skinner

asked the Chancellor of the Exchequer if he will make a further statement regarding Johnson Matthey Bankers.

Mr. Ian Stewart

My right hon. Friend discussed with the Governor the terms of his statement of 17 July, to which I refer the hon. Members.

Mr. Alton

Will the Economic Secretary tell the House how many heads have rolled at the Bank of England as a result of the Johnson Matthey fiasco? As his right hon. Friend told the House that the Bank was too busy to investigate the gaps in the Johnson Matthey records, will he tell us why he did not call in outside assistance?

Mr. Stewart

Staff appointments at the Bank of England are a matter for the Governor of the bank. My right hon. Friend did not say that the present management of JMB was too busy. He said that the affairs of the bank were in a chaotic state and that it took a long time to establish that there were gaps in the documentation.

Mr. Skinner

Will the Minister tell the Chancellor of the Exchequer that, in view of the dilatoriness shown by the Chancellor, the Governor of the Bank of England and all the others in this affair, it would not be taken well if the taxpayer had to foot the legal bill incurred by the Chancellor because of recent events? If the Chancellor is prepared to use more than £100 million of taxpayers: money for this rescue, is it not wrong for the taxpayer also to have to foot the bill for the legal expenses arising out of the writ?

Mr. Stewart

Contrary to what the hon. Gentleman suggests, my right hon. Friend has been punctillious in reporting to the House on the JMB affair. Indeed, last week he made a statement as soon as it became clear that the JMB management wished to invite the City of London police to conduct a preliminary inquiry. As to the writ, I should point out that a writ was served on the auditors on Tuesday, and in response a writ was served by the auditors on my right hon. Friend. That writ will be vigorously contested.

Mr. Marlow

Does my hon. Friend agree that the most important aspect of this affair is the confidence of the City of London and that it was right for the Bank of England to intervene? Is it not also right for the Government to uncover what went wrong so that it does not recur? Is it not least important to make political capital?

Mr. Stewart

There is a lot to be said for my hon. Friend's remarks. Clearly, important lessons have been learnt about banking supervision, and that was the subject of my right hon. Friend's statement to the House on 20 June.

Mr. Dalyell

Will the Minister accept that some of us do not think that the technical officers of the Bank of England were at fault? Will he confirm his total confidence in Mr. Walker and Mr. McMahon?

Mr. Stewart

I do not propose to be led into making comments from the Dispatch Box on any individual official.