Former governor of the Bank of England has labelled the institution's climate change remit as "ridiculous", arguing that tackling climate change is a government issue and it's absurd to suggest the Bank can significantly influence it.

Mervyn King, speaking at Westminster, expressed concern over the increasing number of tasks and responsibilities placed on the central bank over time, leading to an "inevitable reduction in focus" on its primary role, and emphasised the need for a "cull". The independent crossbench peer argued that efforts to control inflation and ensure financial system stability were "more than enough for one institution".

Lord King of Lothbury made these remarks during a debate among peers on a report by the upper chamber's Economic Affairs Committee published late last year. The report found that the bank's remit had considerably expanded, highlighting a particular emphasis on supporting government policy on climate change.

The Bank has faced backlash for its slow response and failure to predict the inflation surge, which at one point exceeded 11%, when its main responsibility is to keep it as close to 2% as possible. This has sparked concerns in Parliament about the lack of accountability of the independent central bank.

A review commissioned by the Bank last month discovered significant flaws in the economic forecast model it uses, with staff utilising "out-of-date" software that hadn't been properly maintained. Lord King has voiced concerns over the institution's broadened scope, which now includes prudential regulation and financial stability.

He remarked: "Those new tasks have increased the number of staff in the Bank from under 2,000 to over 5,000, with an inevitable reduction in focus on its monetary policy mission. The expansion of responsibilities has gone further with the introduction into its mandate of issues such as climate change, the competitiveness of the City and other secondary objectives."

The peer stressed the importance of the Bank's primary roles: "Trying to keep inflation close to the target and maintaining the stability of the financial system is more than enough for one institution."

He was critical of the Bank's involvement in climate policy: "As many of our witnesses pointed out, climate change policy is a matter for government and, frankly, it is ridiculous to suggest that central banks can have any major impact on it. Therefore, there needs to be a cull of the additional secondary objectives, remit letters and 'have regards to' obligations imposed on the Bank since independence was granted in 1997. Too many responsibilities make it difficult for senior people in the Bank to think strategically."

His sentiments were shared by Lord Lamont of Lerwick, a Conservative former chancellor, who expressed: "Many of these objectives are not really affected by the instruments available to the Bank. This must be true of climate change. The Government ought to be clear that tackling climate change is a matter for the Government. To expect the Bank to lead on that makes no sense."

However, Baroness Lane-Fox of Soho, a co-founder of travel website Lastminute.com and president of the British Chambers of Commerce, argued: "It is essential that we do not reduce the Bank's capacity to analyse the effects of the climate crisis as they hit us.

She added: "I believe that the Bank failed the British people when it let inflation get out of control, but what has happened as a result of that? The governor has had a few uncomfortable appearances before parliamentary committees, and he has had to write a few letters to the Chancellor. Who carries the can for the damage inflicted on the economy from excessive inflation and the resulting interest rate hikes? It seems that no one does."