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Mr. Darling: I shall develop that argument further. I repeat that there is an issue of principle as regards ministerial accountability--an issue about which hon. Members need to think long and hard.

Mr. Gibb: Given that the Treasury Select Committee stated that it will go ahead with the confirmatory hearings regardless of whether the amendment is passed and given the Chief Secretary's firm opposition to those hearings, how will the Government cope if the Select Committee refuses to confirm one of the appointments?

Mr. Darling: We are debating whether we should incorporate the new clause into the Bank of England Bill. That is an entirely different proposition from that advanced by the Treasury Select Committee, to which I shall return shortly.

To conclude my initial point, ministerial accountability and who is responsible for what are matters about which the House needs to think. The whole question of ministerial accountability has fallen into disrepute in the past few years. If we are to reconsider that area, we must consider the implications long and hard. Neither that argument nor the other arguments that I will advance are fatal to the proposition of confirmatory hearings, but we do not believe that such a measure should simply be bolted on to the Bill; it is something that the House should consider.

I shall deal with the other arguments. My hon. Friend the Member for Norwich, South helpfully set out some of the arguments that I put before the Treasury Select Committee, which I shall deal with briefly. First, I observed that there was a risk that the appointments process would be not about the merits of a particular candidate, but a way of getting at the Government of the day. I accept that no member of the present Treasury Select Committee would dream of doing such a thing, but it must be within our contemplation that a future Select Committee or other Select Committees might decide, depending on the composition of the House--within recent memory a Government did not have a majority--the Opposition, dissident members of the governing party or cross-party, to have a go at the Government by trying to get at an individual. It is not fatal, but it is something which we must consider. If that happened, it would bring the whole system into disrepute.

I also said that I thought that confirmatory hearings of that type might discourage candidates from coming forward. I mentioned John Maynard Keynes, who has been referred to on many occasions. I have been in the

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House for only 10 years and my hon. Friend the Member for Norwich, South has been here for only nine months, but I am sure that he will have observed from time to time a tendency for hon. Members to use their privilege as Members to say things that they would never get away with outside the House. For whatever reason, they might decide to have a go at someone appearing before them.

I mentioned Keynes because his economic credentials would have been without doubt. However, were he to appear before the Treasury Select Committee today, although the Gallery would be packed, while many of the journalists and others would be there to hear his General Theory, a number would be there in the hope that he would be asked about his private life, which, even by today's standards, might be thought by some to be rather unorthodox.

Again, I am confident that in the majority of cases that sort of thing would not happen, but it must be within the contemplation of the House that, on occasion, the Opposition or others might have a go at the Government by trying to find out something about an individual appointee that would make it difficult for the Government.

Mr. Radice: The fact is that we have had formal soundings with the members of the Monetary Policy Committee, and all of them have approved of the idea. I accept the dangers to which my right hon. Friend refers, and we must guard against them, but the members of the MPC believe that confirmatory hearings would enhance their position rather than weaken it.

Mr. Darling: I agree. I have spoken to members of the Monetary Policy Committee in anticipation of a visit to the MPC, to which I certainly look forward. As part of the open process that the Government have instituted, the chance for members to advance their theories and approach on inflation would add to transparency. I have not the slightest doubt that my hon. Friend will ensure, when the Select Committee sets up the procedures, that they are fair and that the individuals have a chance to state their case and will be questioned only on matters that are germane to their appointment.

We are discussing specific new clauses, but we are dealing with a general principle. I undertook to set out the Government's position, which is that the idea is worthy of consideration, but that we have a duty to consider not only the advantages but the downside. None of the matters that I have mentioned is fatal to the proposal, but it would be wrong to apply confirmatory hearings to these appointments and not to others that are equally important. Examples could include the utility regulators, the Governor of the Bank of England and his deputies--those are fairly important appointments, after all--and members of the Financial Services Authority. That is why we are not inclined to accept either of the new clauses.

One important point concerning new clause 1 that has not been discussed to any great extent today is the need to ensure that the individuals maintain the high standards of public life that we would all expect.

I remind the House that the Government made proposals last November that would mean adopting a code of practice involving various procedures designed to make the appointments process more open and auditable, because the job and the desired qualifications of the appointee would have to be publicly specified: candidates

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would have to be identified through advertising or appropriate consultation, and the sifting or selection of candidates would have to be undertaken and overseen by a panel with at least one independent member. If the proposals are acceptable, we will act right across the board to implement them.

We must consider what the Treasury Select Committee would decide on. We have already had some discussion about that. Would the Select Committee discuss candidates' views or the number of papers that they had presented to the academic community, for example? We all know that economists cannot agree, and I doubt whether the Select Committee would always agree about who is best. The choice is bound to be subjective. We should not lose sight of the fact that the key test is whether the Monetary Policy Committee delivers the Government's objective of low inflation.

The Treasury Select Committee has said that it wants to call members of the MPC before it, and I welcome that. The whole House has an opportunity to watch how the procedures develop and work in practice. It could be that many of my fears come to nothing, but they should not be ignored, because we must always guard against dangers. I hope that the Select Committee will bear it in mind that the whole House will be watching to see whether the confirmatory hearings are successful and whether, indeed, they add to the general openness and transparency that the Government want.

The matters dealt with in the new clauses deserve further consideration. We are keeping the proposal under review, but we do not believe that it would be right to institute confirmatory hearings for one set of appointments in this Bill alone. It is the Monetary Policy Committee's job to achieve the Government's inflation target. That is where the main interest lies. The Chancellor remains accountable to the House for the conduct of economic policy.

For those reasons, I urge the House to reject the new clauses. We will keep the matter under review, and perhaps at some stage the House can have a substantive debate on the merits of having confirmatory hearings right across the board.

6.15 pm

Mr. Heathcoat-Amory: We listened carefully to the Chief Secretary. He was highly sympathetic to the concept of confirmatory hearings--but not now, and not for this Bill. His reasons disintegrated before the House. He was afraid that the candidates would be questioned about their private life, and that people could be deterred from standing by the thought that they would be cross-examined by the nasty Treasury Select Committee.

As the Chairman of the Select Committee, the hon. Member for North Durham (Mr. Radice), said in his excellent contribution, the questioning would centre only on the competence and independence of the candidates; that is written into new clause 3, so there is no danger, either in intention or in law, that the questioning could go as wide as the Chief Secretary fears. He gave no reasons why we should not accept the excellent all-party report. We will urge the House to vote for new clause 3.

The Chief Secretary said that the proposal would open up a Pandora's box, and that not only Monetary Policy Committee members but even the Governor of the Bank of England might be subjected to such hearings. That is

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indeed the case. A glance at new clause 3 shows that it applies to the Governor himself. The right hon. Gentleman did not even read it before inviting the House to reject it.

New clause 3, tabled by the hon. Member for North Durham and others, is well drafted, and we intend to support that, rather than new clause 1. I therefore beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.


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