Previous SectionIndexHome Page


Mr. Jim Cousins (Newcastle upon Tyne, Central): I congratulate my hon. Friend the Member for Newark (Mrs. Jones) on her maiden speech. As a frequent user of the east coast main line, my knowledge of Newark and Retford is regular, frequent but rather fleeting. She filled in many of the gaps that I missed as I shot past. She emphasised the importance of roots and convictions, and we should all take that greatly to heart. She mentioned that Newark had had a bad time in the civil war. Newcastle had a worse time, because in 1644 it was besieged for several weeks, and was finally captured by the Scots. I mention that episode because it has a certain relevance to the debate. Any discourtesy to the Chief Secretary will be balanced by the fact that my hon. Friend the Member for Great Grimsby (Mr. Mitchell) can rest assured that some of us hold out against the Scots on occasions that are not always lost in history.

We are discussing serious and important issues. The Bank of England Bill is as much a constitutional as an economic Bill. It exchanges secrecy for openness, and it exchanges the illusion of a control that was never really exercised for the reality of an important debate about how the economic management of the country is to be carried out. In a sense, that is the test of the new clauses and amendments.

22 Jan 1998 : Column 1177

5.30 pm

I welcome the amendments tabled by my hon. Friend the Member for Great Grimsby. We should try to ensure fair representation of regional and industrial interests on the Monetary Policy Committee through proper scrutiny of its members. Although I doubt that a quota could be provided for sensibly in statute, the exercise of accountability among members will make it possible to keep such matters in mind.

I am afraid that I disagreed with my colleagues on the Treasury Select Committee. I did not take their view that periods of service on the Monetary Policy Committee should be longer than those proposed by the Government. Any danger of cronyism will soon be exposed: it will not survive scrutiny. That is not the danger. In financial affairs, a much greater danger is that a club of good old boys--and, for that matter, girls--will be established, that those people will be able to hold office for far too long and that their habits will become altogether too cosy. I am therefore glad that the Government have decided on short terms of service.

New clause 1 is at the centre of the debate, and I have listened carefully to what has been said about it. As a member of the Treasury Select Committee, I wanted the House to have an opportunity to discuss it: that is why I supported the proposal in that Committee. It is important for us to wrestle with constitutional innovations, and to consider ideas such as that of confirmatory hearings. I have also listened to what the Government have said, however, and they have by no means closed their mind to the possibility of statutory confirmatory hearings at a later date.

I understand--this is expressed clearly in the Government's response to the Treasury Select Committee report--that the Government are looking to the Select Committee. I understand that they are encouraging the Committee, albeit cautiously, to experiment with confirmatory hearings with regard to members of the Monetary Policy Committee. Certain issues cannot be overlooked. The hon. Member for Grantham and Stamford (Mr. Davies) speculated that a member of that committee might have had connections with Rupert Murdoch. Rupert Murdoch is a business man with a substantial empire; it is entirely possible that a member of the MPC appointed in the future may, at some point in his or her career, have had a business connection with him. Would it be appropriate for a confirmatory hearing to explore that and make something of it? Not necessarily, surely. Good judgment is involved here.

Mr. Quentin Davies: I am sure that the hon. Gentleman listened carefully to what I said, but what worries me is not that an individual might have worked for Mr. Murdoch at some time. As the hon. Gentleman pointed out, Mr. Murdoch's empire is so extensive that it might be difficult to complete a career in certain spheres--especially journalism--without working for part of that empire at some point.

My fear is that a person of that kind might be able to influence a Government to appoint a certain person. A deal might be made, for instance, whereby a Murdoch nominee would be appointed and the Government would be given a better run in The Sun. That is the sort of

22 Jan 1998 : Column 1178

legitimate concern that Parliament should bear in mind if there is any suggestion of extraneous influence on the Government in the appointment of members of the MPC.

Mr. Cousins: I might have known that that would be a long intervention.

The rather po-faced way in which the hon. Gentleman made his intervention is entirely contradicted by the lip-smacking glee with which he introduced the subject of Rupert Murdoch in the first place. The Government are properly concerned about the issue. For a brief period in her career, a member of the MPC served with the American Central Intelligence Agency. We can all imagine what irresponsible people could make of that at a public hearing.

The Chairman of the Treasury Select Committee, my hon. Friend the Member for North Durham (Mr. Radice), has made it clear that the Select Committee wants to experiment, and to demonstrate to both the House and the public that we, as a group of parliamentarians, are capable of engaging in these tasks properly and responsibly. I think that the Government are entirely right to leave it to us to demonstrate the worth of their proposal, and to enshrine it in statute only after we have done so.

Mr. David Ruffley (Bury St. Edmunds): I support new clause 1. It is important, because it introduces a check on over-mighty Executives who could--as Opposition Members have pointed out--use their power to appoint members of the MPC to install cronies, and to use that body as a political instrument, or a political wing, of the Treasury. In other words, it would not in any sense be independent.

In Committee, that argument was said to be wrong for two reasons. Labour Members said, "We are not going to appoint political cronies; we have not done so thus far." They pointed out that the MPC currently included individuals who were not in any way political, and that the City considered that its current composition was fine and above board. That, however, implies nothing about what the Chancellor of the Exchequer, or other Treasury Ministers, may wish to do in the future. Opposition Members think it perfectly possible that the wily and cunning Chancellor may indeed use all his skills of spin and underhandedness to manipulate all sorts of activities in the new MPC and the new Bank of England. We are worried about what may happen in the future without a measure such as new clause 1.

The second reason for suggesting that there would be no political cronyism was given by the Chief Secretary, who said that the City would not put up with any political appointments. The City would make its displeasure known, and the Chancellor would not dare to install political allies or stooges. That argument was deconstructed convincingly and elegantly by my hon. Friend the Member for Grantham and Stamford (Mr. Davies), who made the entirely valid point that a premium would attach. Investors and traders outside this country, and even in the City, would say, "This is a dodgy committee. We are worried about what the macro-economic management of this currency and this country is all about." There would be a premium when it came to buying and selling. The Chief Secretary did not address that point in Committee, and I think that he should do so. It is not enough to say that the committee will be self-regulating.

22 Jan 1998 : Column 1179

A huge power is being transferred to an unelected quango that is like no other quango. In Standing Committee, Labour Members wanted to know the difference between the new statutory body created by the Bill and the Prison Service agency or the Passport Agency. Labour Members must be living on a different planet if they do not understand the difference, which is clear, between those bodies and the one created by the Bill. The difference is that interest rate policy touches the lives and interests of so many people. It affects mortgage holders; it affects the levels at which exporters trade their products; and--because monetary policy affects inflation--it affects everyone's cost of living. Those are huge political issues that concern people's daily lives.

It is nothing short of disgraceful for Ministers, with virtually no consultation, to introduce this Bill and to propose a statutory body comprising unelected placemen and appointees. We should carefully examine new clause 1, and assert the fact that Parliament must be able to hold the Executive to account on big political decisions, such as setting interest rate policy. That must be right.

Opposition Members want to halt the dangerous trend of downgrading the importance of the House that the Government have set in train--by leaking stories to newspapers, by the manner in which they set policy on economic and monetary union, by their errant disregard for the House's practices and by not consulting the House, as they should, in determining their conduct as a responsible Executive. In that spirit, I support new clause 1.

Mr. Michael Fallon (Sevenoaks): I should like to speak briefly to the final four amendments in the group. Before I do so, however, it is my very pleasant duty to congratulate the hon. Member for Newark (Mrs. Jones) on her maiden speech. As the successor to both Richard Alexander and William Gladstone, she has her work cut out. If she emulates the popularity of the former and longevity of the latter, she will be doing very well indeed. It was an extremely fluent speech. I have no idea why she chose to wait before delivering it, but we shall certainly be disappointed if it is as long again before we hear her next speech. The Opposition congratulate her on it.


Next Section

IndexHome Page