Bank of England Bill — Monetary Policy Committee. — 20 Apr 1998

Lords amendments considered.

Lords amendment: No. 1, in page 3, line 5, at end insert--

("( ) The report mentioned in subsection (2)(a) shall, in particular, include a review of the Bank's performance in relation to its objectives and strategy, as determined by the court of directors of the Bank, in the financial year to which the report under this section relates.")

I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker (Sir Alan Haselhurst):

With this, it will be convenient to discuss Lords amendments Nos. 2 and 3.

Lords amendment agreed to.

Lords amendments Nos. 2 and 3 agreed to.

Lords amendment: No. 4, in page 5, line 30, leave out ("the House of Commons") and insert ("Parliament")

I beg to move, That this House doth agree with the Lords in the said amendment.

The amendment would require any notice defining price stability or the Government's economic policies to be laid before the Lords as well as the House of Commons. It is about openness and about accountability to Parliament, so it should be welcomed.

I take the opportunity to draw to the attention of the House the written answer given earlier today by my right hon. Friend the Chief Secretary, in which he announced the Government's response to the consultation on cash ratio deposits. Copies have been placed in the Libraries of both Houses. The Government have decided that the initial CRD scheme should apply a zero rate to eligible liabilities up to £400 million and 0.15 per cent. to eligible liabilities over £400 million.

20 Apr 1998 : Column 508

Lords amendment agreed to.

Lords amendment: No. 5, in page 6, line 8, at end insert--

("( ) Of the four members appointed under subsection (2)(c) one shall be appointed on the advice of the First Minister of the Scottish Executive.")

I beg to move, That this House doth disagree with the Lords in the said amendment.

The Bill sets up the Monetary Policy Committee, whose job it is to set interest rates in order to meet the Government's inflation target. It is worth noting that our long-term interest rates are the lowest that they have been for some 33 years.

During the Bill's passage through the other place, an amendment was moved by Lord MacKay of Ardbrecknish to the effect that one of the four members of the Monetary Policy Committee appointed by the Chancellor of the Exchequer should be appointed only after receiving the advice of the First Minister of the Scottish Parliament.

When the Government expressed their intention to set up the Monetary Policy Committee, we said that the members of that committee would be chosen because of their skill, because of their reputation and because of their ability to reach decisions as to the appropriate levels of interest rates for the whole of the United Kingdom.

We recognised that there was anxiety--which has continued--that the Bank of England should have regard to the, sometimes varying, economic conditions in different parts of the United Kingdom. As I shall explain shortly, we have drawn the Bill in such a way as to ensure that the court of the Bank of England has a specific duty to monitor the way in which the Monetary Policy Committee discharges that duty and, in making our most recent group of appointments to the court, we have responded to many of the legitimate concerns reflected by

20 Apr 1998 : Column 509

Lord MacKay and others who spoke in support of his amendment. Indeed, those concerns were acknowledged by Lord McIntosh of Haringey in another place.

Question put, That this House doth disagree with the Lords in the said amendment:--

The House divided: Ayes 231, Noes 107.

Historical Hansard | Online Hansard |