No H2B veto for BoE
Earlier this year two ministers suggested the BoE would have the power to stop the scheme if it believed it was creating a ‘house price bubble’.
However Carney has now moved to clarify the BoE’s role and said that any decision to stop the scheme would have to come from the government.
Andrew Tyrie, chairman of the Treasury Committee, welcomed Carney’s clarification on the BoE’s role.
He said: “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.”
The government has already asked the FPC to assess the impact of Help to Buy each year.
Starting in September 2014 it will decide what effect the scheme has had on overall financial stability.
It will also be asked to consider the £600,000 cap on Help to Buy and could suggest dropping the cap if required.