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Mr. Gibb: What will happen when we try to read the minutes of the Monetary Policy Committee? We will look at the voting record, read the text of the opinions expressed and try to correlate one with the other, but we may not get it right. Would it not be far clearer, easier and more open to publish names next to the views?

Mrs. Liddell: I reiterate the point that I made about the FOMC. Whenever such practice has become enshrined in procedure, it has led to a reduction in economic debate and the delivery of prepared statements, because people know that their views will be fully represented when the minutes are published. There is about five years' delay in publishing those minutes.

The right hon. Member for Wells (Mr. Heathcoat-Amory) made a point about the Treasury representative's role in the meetings. The minutes already include a full record of discussion at the meetings, including the views expressed by the Treasury representative. Regardless, that representative does not have a vote and, therefore, does not take part in the decision-making process. I therefore believe that amendment No. 22 is also unnecessary.

Therefore, because of the contradictory nature of some of the amendments, and because the amendments are unnecessary and could conflict with the Monetary Policy Committee's purpose and the nature of its debates, I ask the House to resist the amendments.

Mr. Fallon: It is up to the hon. Member for Great Grimsby (Mr. Mitchell) to defend his own amendments and to decide what to do with them. However, I should like to respond to the debate and to the Minister's reply on amendment Nos. 16 and 22.

The Economic Secretary really did deploy a poor argument against amendment No. 16. She tried to criticise the arrangements that she inherited, although those arrangements delivered very low inflation--inflation lower than we have now--and were working well. Bizarrely, she then went on to criticise her own arrangements. She admitted to the House that the current Monetary Policy Committee minutes were not full enough. She accepted that criticism, and even almost invited the Monetary Policy Committee to improve its way of recording its decisions.

The Economic Secretary introduced a total red herring by making an analogy with the Federal Open Markets Committee. We do not want to be overly prescriptive. However, the amendment does not suggest that transcripts should be published, as happens with the FOMC; it simply suggests that, when the main views are noted, the name of the member who expressed those views should be included with them, as happens with any minute of, for example, a Cabinet Committee.

It is important to realise, as the Economic Secretary did not, that the new arrangements introduced by the Government are regressive. Under the previous arrangements, we knew the Chancellor's views and we

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knew the Governor's views. It is fair enough to say that the views of the more junior officials attending the Ken and Eddie show were not recorded, but at least we knew where the Government stood, and we knew where the Bank stood.

Now that the Chancellor has withdrawn from the exercise, it is even more important that we know the position of the Governor and the deputy Governor of the Bank and of the external members of the Monetary Policy Committee. It is precisely because the Chancellor himself has withdrawn from the exercise that it is important for us to know the Treasury's view and the Treasury representative's comments. Therefore, I again commend amendment No. 16 to the House.

The Economic Secretary rather tried to brush aside amendment No. 22. Exactly what the Treasury representative will do on the Monetary Policy Committee is unclear in schedule 3 to the Bill. The matter was unclear until the point was raised in Standing Committee by my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb), who pressed the Government on it. It then emerged that the Treasury representative was not some observer or a mere assessor but would be playing something of a supervisory role.

I shall quote the words of the Paymaster General--where is he, by the way? He dealt with the subject and the procedure in Standing Committee, and it is about time that he attended the proceedings on them. It is a shame that he has not done the House the courtesy of attending the conclusion of our proceedings on the Bill. Nevertheless, when pressed in Committee, he revealed the Treasury representative's role. He said that the Treasury representative would ensure that

would not--

    "be violently at odds with Treasury fiscal policy."--[Official Report, Standing Committee D, 27 November 1997; c. 187.]

We discover, therefore, that the Treasury representative is no mere notetaker; he has the freedom to intervene in the debate.

The Treasury representative could be a very senior Treasury official. As Ministers are Treasury officials, a Treasury Minister might attend Monetary Policy Committee meetings. The Economic Secretary, the Paymaster General--if he finds time--or the Chancellor might attend the meetings. If relations continue to deteriorate, perhaps the First Lord of the Treasury might want to go along to the meetings to get a grip of what is going on.

It is therefore all the more important that we ensure that, if the Treasury representative does intervene, his or her views should be recorded. If all the other amendments to clause 15 fall, I hope that the Government will think again on amendment No. 22.

Mr. Mitchell: I did not expect the Economic Secretary to rush to her feet to accept my amendments. She has a fairly unique characteristic for a Treasury Minister: I do not feel bad when she rejects my amendments or arguments with her steely charm. She has exercised that characteristic in this debate. However, I reiterate my plea for openness. I should like more openness to be built into the Bill, as it would have been by my amendments.

Monetary policy should be made the subject of a national debate in which all people and interests can participate. We do not want interests--whether

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manufacturing, finance or farming interests--to submit to the wisdom of bankers and monetary economists as if it were some type of divine wisdom. Such wisdom may be the rationalisation of a prejudice, a vested interest or a set of attitudes, and policy must be publicly argued and justified. Requirements for openness would have accomplished that, and I wish that they could have been built into the Bill.

I wish also that we could include amendments to find some alternative to rationing money by high interest rates and some way in which to manage credit. I wish not to prescribe or require such measures but to include in the Bill the ability to develop desperately needed methods and systems for managing credit.

The United Kingdom now has a terribly competitive market and too many institutions pouring out credit, inciting people to spend and to run themselves into debt. Credit is pouring out so much that we sometimes have a laxative-type economy. In managing our economy, we are unusually dependent on interest rates. Booms and busts--wild fluctuations--are therefore built into our economy and are almost inevitable.

The first result of the attempt to provide greater stability, by giving independent power to the Bank of England, has been to increase instability. In real terms, interest rates are now at almost record levels and are certainly higher than in the 1960s and 1970s.

That will have a dampening effect on the economy. Indeed, it is already happening. Comparative boom, which we had, will become bust. We must find a way of regulating things better to stop that. I was distressed to hear the Economic Secretary say that there was no way of controlling credit. If that is so, how can we control interest rates?

If we are as subject to international markets and international fluctuations as that, there is no way of producing stability in the economy. Instability is inevitable, and all the international trends will wash straight in. That is a counsel of despair, against which I must warn my hon. Friend.

We must try to find a way of managing credit. I would rather that opportunity were in the statute, but it will not be. I see little point in pushing amendments to a Division at this time of night, but I am sure that the Government are committed to openness and will expand and develop the idea as time goes on, even if that is not written into legislation as tightly as I should like.

I am certain that the Government will be driven by the fluctuations in the economy to find a better way of managing and controlling credit than the simple use of interest rates--the one-club golfing technique--has allowed them. Content in the knowledge that those things will happen, even if more slowly than I want, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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Clause 17

Power to obtain information

Amendment made: No. 43, in page 7, line 21, after 'institution' insert
', or a former authorised institution,'.--[Mrs. Liddell.]

Clause 21


8.30 pm

Mr. Fallon: 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.'.

Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: No. 4, in clause 26, page 11, line 13, at end insert--

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