Bank of England Bill — Transitional provisions and savings — 22 Jan 1998

I beg to move amendment No. 41, in page 2, line 23, at end insert--

'(2A) At a meeting of the sub-committee the quorum shall be 7.'

Amendment agreed to.

Amendment made: No. 42, in page 2, line 25, at end insert--

I beg to move amendment No. 25, in page 5, line 2, after 'and', insert

'the highest possible levels of employment, and'.

That is what always happens--interest rates are raised to pass the punishment on to the people.

That enables the Government to write to the Bank of England to specify how that should be done.

Amendment, by leave, withdrawn.

I beg to move amendment No. 30, in page 5, line 41, at end insert

'and an estimate of its effect on inflation, economic growth, employment and the exchange rate.'.

Amendment, by leave, withdrawn.

Amendment made: No. 43, in page 7, line 21, after 'institution' insert

', or a former authorised institution,'.-- [Mrs. Liddell.]

I beg to move amendment No. 15, in page 9, line 36, at end insert--

'(2) In exercising the functions transferred under subsection (1) the costs of the Authority shall not exceed the costs incurred by the bodies previously responsible for exercising these functions, as adjusted for inflation.'.

Amendment, by leave, withdrawn.

Amendment made: No. 44, in page 19, line 11, leave out 'within the meaning of' and insert 'authorised under'.-- [Mr. Betts.]

Amendment, by leave, withdrawn.

I beg to move amendment No. 11, in page 42, leave out line 12.

Mr. Deputy Speaker:

With this, it will be convenient to discuss the following amendments: No. 12, in page 42, line 12, after 'any', insert 'legally binding'.

There are a number of other very general obligations.

Amendment, by leave, withdrawn.

Amendment made: No. 45, in page 43, line 5, leave out from 'satisfied' to 'shall' in line 6 and insert--

'(a) any requirement to consult before making an order under this Act, or

(b) any requirement of paragraph 2(1) of Schedule 6,

that requirement'.-- [Mrs. Liddell.]

Bill reported, with amendments.

Order for Third Reading read.

I beg to move, That the Bill be now read the Third time.

This is an historic Bill. For many years there has been much talk and discussion about the merits of an independent central bank; indeed, there have been many debates in the House. On entering office we made it clear that we believed that the best way to obtain price stability and a commitment to low inflation was to give the Bank of England operational independence to meet the Government's inflation target of 2½ per cent. The Bill is a cornerstone of the Government's economic strategy. It is a major step forward. The passing of the Bill will put in place another plank in our economic policy.

We have already made it clear that we want to promote stability and long-term growth. We are prepared to face up to the long-term issues, which the previous Government ignored for far too long. Those include the need to end the damaging cycle of boom and bust, which has affected this country badly for many years, and to put in place a framework for long-term stability. Controlling inflation is an essential precondition for growth.

We are taking steps to tackle the structure of unemployment and to equip people for the future by improving educational standards and providing opportunities for people to acquire skills. The welfare-to-work reform and the new deal for the young and the long-term unemployed are major steps forward that no Government in recent history have attempted. Our tax and benefits system will be overhauled so that it encourages work and makes work pay.

We have encouraged long-term investment; we shall abolish advance corporation tax; we have announced cuts in corporation tax, with more to come; we have overhauled the private finance initiative; and we have provided leadership so that we can influence Europe in the interests of this country.

The reform of the Bank of England is a major part of that strategy. It shows our determination to achieve economic stability and low inflation, which is good for business, for savers, for pensioners and for anyone on low and fixed incomes. The new Bank of England will have one of the most open and accountable systems of any central bank in the world. It has a clear target. Its procedures are open; as we discussed this evening, there are many ways in which its policy and commitment are open to scrutiny, by this House, the country and the world at large. That marks a commitment to openness and transparency which this country has not seen before.

This country depends on its international trade and on markets having confidence in the Government's ability to deliver economic stability and low inflation. The

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independence of the central bank, the code of fiscal stability and the pre-Budget report are all planks in the same strategy to ensure that there is openness. Openness brings confidence and certainty that the Government will not be moved from their determination to deliver low inflation.

Question put , That the Bill be now read the Third time:--

The House divided: Ayes 207, Noes 116.

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