Memorandum by HM Treasury
1. INTRODUCTION
1.1 This Memorandum is submitted to inform
the Treasury Sub-Committee's inquiry into HM Treasury. It describes
— the role of the Treasury;
— the way in which we fulfil that role;
— the infrastructure and resources
which they use.
1.2 Further detail is set out in the Treasury
chapter of the Departmental Report for the Chancellor of the Exchequer's
Departments (Cm 4615), published on 7 April. Copies of the Report
have been sent to the Committee.[1]
2. THE TREASURY'S
ROLE
2.1 The Treasury's aim is to raise the rate
of sustainable growth, and achieve rising prosperity, through
creating economic and employment opportunities for all. This aim,
and our objectives, were announced in 1998 in the context of the
Comprehensive Spending Review, and are set out in Annex 1 overleaf.
2.2 To support high and stable levels of
economic growth and employment the Government has introduced a
macroeconomic policy framework that is highly transparent, forward-looking
and underpinned by legislation. The monetary policy framework
has a clear objective of price stability with interest rates set
by the Bank of England's Monetary Policy Committee (MPC) to deliver
the Government's symmetric inflation target. The Treasury's role
is to set the inflation target and oversee the institutional arrangements
for delivering it. The Treasury representative on the MPC helps
to ensure that fiscal and monetary policy are well coordinated.
2.3 Fiscal policy is governed by the Code
for Fiscal Stability, which introduces to the Government's decisions
on the public finances the same high standards of transparency,
responsibility and accountability which underpin monetary policy.
Consistent with the Code, the Government has set out clear fiscal
rules and objectives, defined over the economic cycle, and regularly
publishes updates of the key fiscal aggregates used to assess
the Government's performance against these objectives.
1 Not printed Back
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