§ Mr. David Howellasked the Chancellor of the Exchequer (1) if he will list those services performed by the Bank of England for his Department which the Bank has informed him are carried out at below economic cost, indicating the degree of subsidy from the Bank to the Government in each case;
(2) if he will list all services performed for Departments of the Government by the Bank of England, indicating the fees paid per year by the Government to the Bank in respect of each such service;
(3) by what amount the Bank of England has informed him that it subsidises the Government for the administration of exchange control.
§ Mr. TaverneThe services provided by the Bank of England to Government Departments cover a very wide range and in the main are not the subject of specific charges. It is not possible to list the whole range in detail, but they include general banking services, advice on financial matters, representation and economic intelligence services.
Under Section 16(7) and (8) of the National Loans Act, 1968 the Bank of England is remunerated in respect of its work in the management of Government 501W debt. Payments to the Bank from the National Loans Fund in respect of these services amounted in 1968–69 to £1,730,000.
A fee in respect of the administration of exchange control is paid to the Bank from the Vote for Treasury and Subordinate Departments. In recent years the fee paid has been a nominal amount of £50,000. The Bank has informed the Treasury that its actual costs were about £1,600,000 in 1968–69.
No charge is made for the Bank's services in managing the Exchange Equalisation Account. The Bank has informed the Treasury that its costs were about £350,000 in 1968–69.
Expenses incurred by the Bank of England in the printing and issue of bank notes are deducted from the income earned on the Issue Department's assets before the profits of the Issue Department are paid into the National Loans Fund in accordance with Section 6 of the Currency and Bank Notes Act, 1928 and Section 9 of the National Loans Act, 1968.
The House will be aware that certain activities of the Bank of England are currently under examination by the Select Committee on Nationalised Industries.