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Mr. Gibb: I support my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) on amendment No. 16. Clause 15(4) provides for the minutes of the committee's deliberations to be published, and for voting preferences to be recorded, but it does not provide for the views expressed by members of the committee to be recorded. The Government are not providing information on the economic views held by members of the committee, and the Select Committee on the Treasury, when it participates in confirmatory hearings, will not be quizzing members of the committee on their economic views. Therefore, the only way that we can know their views is for them to be published in the minutes.

Economic policy and the conduct of monetary policy are not part of an exact science. That view has been backed up by eminent people such as Sam Brittan, Tim Congdon and Lord Eatwell. Those matters are of wider interest. People outside the confines of the Monetary Policy Committee and the Bank of England want to analyse the committee's deliberations, so that they can establish in the weeks, months and years ahead who was right and who was wrong. Decisions on monetary policy remedies depend on the forecasts provided by the committee. If an inflationary period is forecast, the committee will recommend to the Bank of England that it raises interest rates and tightens monetary policy. On the other hand, if the economic position is forecast to be deflationary, it will recommend a looser monetary policy and lower interest rates.

Such an economic analysis would be useful for the economy, for the country and for academic study. It would be useful to analyse the forecasts, so as to establish whether the recommended remedies have turned out to be correct. A wide debate of that kind took place for a few years, when we had the so-called Ken and Eddie show. Although their views were not necessarily recorded in the minutes, we could see the final recommendation. For example, we knew on one occasion that the Chancellor was recommending no interest rate rise when the Governor of the Bank of England was recommending a rise. In due course, the Chancellor was proved correct.

The debate that took place during the Ken and Eddie show informed the wider debate in the country as a whole. I urge members of the Government to remove the partisan expression from their faces, to consider seriously the effect that the amendment would have in raising the level of informed debate about the conduct of economic policy and to accept it.

The Economic Secretary to the Treasury (Mrs. Helen Liddell): I am always amused when the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) talks about the Ken and Eddie show. The point of the Bill is to rectify the failings of the Ken and Eddie show, during which partisan politics intervened in the setting of interest rates, to the economy's cost.

We resist the amendments, not because we are opposed to openness, but because many of them are unnecessary. They relate to parts of the Bill that already provide for openness. In other contexts, the amendments are

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contradictory: in a number of respects, the amendments tabled by my hon. Friend the Member for Great Grimsby (Mr. Mitchell)--about which I shall say more shortly--contradict what he wants to achieve in relation to openness.

As we discussed the issues fully in Committee, I do not intend to delay the House unduly, but I think it necessary to deal with a number of points, in a reasoned way. I know that there has been criticism relating to the fulness of some of the information given in the minutes of Monetary Policy Committee discussions, and I am sure that the committee will take those criticisms on board; but I believe that the amendments would have a negative effect.

Speaking to amendment No. 30, my hon. Friend the Member for Great Grimsby spoke--as he had earlier--of the impact of our proposals on


The amendment is quite unnecessary. If it were adopted, the Bank of England would have to publish a statement about the effect of changes in monetary policy on inflation, economic growth, employment and the exchange rate every time such changes were made. The Bill already provides for the arrangements for monetary policy in the United Kingdom to be among the most open in the world, and, in particular, for the publication of a statement after the debates of the Monetary Policy Committee.

If a regular statement were published along the lines suggested by my hon. Friend, his amendment would be unnecessary. Press notices already accompany the conclusions of each MPC meeting, and, in the event of a change in interest rates, the main factors underlying the decision are set out--factors that, typically, include inflation, economic growth and the exchange rate. If my hon. Friend needs to be convinced, I suggest that he look at the notices that followed interest rate changes in August and November last year.

Amendments Nos. 36, 37 and 39 would have a contradictory effect. They would weaken the commitment to transparency, because they would allow the Bank to delay publication of a decision to impose credit controls, or to require deposits from lending institutions, if it decided that publication of that decision was likely to impede or frustrate the action.

I am aware of the commitment of my hon. Friend the Member for Great Grimsby to the concept of credit controls; indeed, we discussed such matters in detail during an Adjournment debate not long ago. My position has not changed since then: there is no evidence to suggest that credit controls would be effective when we have open, global capital markets. They can easily be circumvented. We know from our own economic history that such controls have been tried in the past, and have failed.

I refer my hon. Friend to the minutes of the August meeting of the Monetary Policy Committee, in which such quantitative controls were considered and rejected. There is no sign that the Bank cannot control inflation without credit controls; indeed, low and stable inflation over time, which is the aim of the Government's economic policy, should lead to less volatile interest rates. The volatility that we are currently experiencing is largely due to the

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last Government's failure to take overall economic considerations into account in the run-up to a general election.

8.15 pm

Mr. St. Aubyn: I am curious to know whether the Economic Secretary agrees that, although credit controls may not work, reserve requirements may be an important factor in the operation of monetary policies. That has been the case in a number of countries; does the hon. Lady see a role for such requirements here?

Will the Economic Secretary acknowledge that, for all her trenchant criticism of the last Government, they did at least meet the inflation target by the end of their tenure? Because of their tax-raising activities since the moment they took office, the present Government have signally failed to do the same.

Mrs. Liddell: That--if I may use an expression that I had cause to use to the hon. Gentleman in Committee--is baloney. We observed the discussions about the setting of interest rates during the Ken and Eddie show, and we have had a lengthy discussion. Yes, the last Government managed to hit the target once, but there has been a cost to the overall structure of our economy, and, indeed, the whole concept of the Ken and Eddie show has been brought into disrepute.

I am not sure why amendments Nos. 36, 37 and 39 were tabled, other than to give my hon. Friend the Member for Great Grimsby another opportunity to expound his theory about credit controls. Other amendments relate to the detail that goes into the minutes in relation to economic analysis. In amendment No. 38, my hon. Friend asks for fuller economic analysis to be included. Again, I ask him to look at the minutes that have been published. The minutes already include comprehensive discussion of economic developments, and a summary of the analysis presented by Bank staff. The quarterly inflation report--which is much respected by economic commentators and others--also contains the Bank's economic analysis. I do not think that amendment No. 38 would add to the information that is already provided.

Amendments Nos. 16 and 40 bring us back to issues that were discussed fully in Committee, when I understood that the Opposition had accepted the force of the Government's arguments. Let me repeat what I said at the time. We do not want the legislation to be overly prescriptive, for a very sound reason: we want members of the MPC to be free to be as frank as possible in their discussions at the meeting.

One of the reasons why we must resist the amendments is our experience in the United States, where the Federal Open Markets Committee publishes a transcript after about five years. Members of that committee have increasingly been in the habit of reading out prepared statements. We do not want that kind of discussion in the MPC; we want the fullest and frankest possible exposition of views on the state of the economy and the impact on the inflation rate.

The voting record of individual Monetary Policy Committee members is available, and will therefore make it clear where each member stands. Although the thought might seem unusual in the House, Monetary Policy Committee members might change their mind during a

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debate, and we must give them that opportunity. Should they decide in economic discussion to change their position, they should feel free to do so.

I reiterate, however, the point that I made earlier: we should like there to be fuller and perhaps more transparent minutes of Monetary Policy Committee meetings. I am sure that the committee will respond to those concerns.


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