Parliamentary accountability of
the IMF
12. The Chancellor of the Exchequer is the UK's Governor
at the IMF and is responsible for UK interests at the Fund. He
is also Chairman of the International Monetary and Financial Committee
(IMFC), the main advisory committee to the Board of Governors.
The Chancellor represents the UK at the annual meetings of the
Fund. However, on a day to day basis, the UK's Executive Director,
Mr Pickford, takes responsibility for UK interests.
13. As we noted in paragraph 1, the Treasury Committee
has the responsibility of holding the Chancellor and the Executive
Director, the UK representatives at the IMF, to account. We take
this role very seriously and, during the course of this Parliament,
we have taken evidence on IMF issues twice from Mr Pickford and
once from the Chancellor. We have also visited the Fund headquarters
in Washington, and have held talks there with both Mr Pickford
and senior Fund officials. As a result of these visits and hearings
we have published three reports on the IMF (including this one)
during this Parliament. We intend to continue to hold hearings
with the UK Executive Director and to publish reports on the IMF
on a regular basis and we recommend that our equivalent committees,
in other member countries, play a similarly active role in holding
their own representatives at the IMF to account.
14. One of our key recommendations in enhancing the
transparency and hence accountability of the IMF (originally made
by our predecessor Committee and re-iterated in our second report
during the 1998-99 session) was that "the Treasury should
make annual reports on the work of the IMF and on other activities
of the Fund."[11]
The Treasury has just published the second of such reports entitled:
"An Annual Report to Parliament on UK Operations at the International
Monetary Fund—The UK and the IMF 1999-2000". Mr Pickford
described the report as being "... an enormous step forward
in terms of presenting in a relatively accessible form the operations
of the Fund over the last year." He hoped that "...
it has actually added to the general understanding of the public
as to what the Fund is up to."[12]
The second report, which is much broader and more in depth than
the first, has been welcomed by NGOs. The Bretton Woods Project
noted "... this year's report gives a fuller account of the
key decisions taken at the IMF and the priority issues on the
Executive Board's agenda. The report is a useful summary and a
good resource for those who do not follow the debate on a regular
basis."[13]
We welcome the Government's acceptance of our proposal for
publication of an annual report on the work of the IMF, and on
other activities of the Fund, and note the improvements which
have been made to this year's report. We recommend that, in the
interests of transparency, such reports should continue to be
published annually.
15. Nevertheless, there are further areas where the
content of the report could be improved. In particular we share
the view put forward by the Bretton Woods Project that the report
should have been more forward looking and given greater detail
on the UK position on each area of the IMF's work. It remains
the case that even allowing for the publication of the annual
report, the actions of the UK and the Executive Board as a whole
remain opaque. Most notably neither the votes, nor the minutes,
of the Executive Board are published. We believe that, because
the Executive Board is the ultimate decision making forum of the
Fund, withholding this information limits our ability to hold
the Government to account for their actions at the Fund.
16. We questioned the Chancellor about the publication
of the UK voting record during our inquiry last year, but he did
not think that unilateral action by the UK was the best way forward.
Mr Pickford repeated the Chancellor's point telling us "...
what he [the Chancellor] might like to do is to try to move forward
across the organisation ... how the UK votes on individual items
... does not necessarily tell you a great deal about the way the
Board discussions went ... providing more information about the
totality of the Board's decision making process would be more
informative to you."[14]
Mr O'Donnell also stressed that "... votes are incredibly
rare on the Board ... quite often when the discussion is taking
place, everybody is aware of where a vote would get to and therefore
a vote is not taken."[15]
17. Whilst we appreciate the reasons why there are
few votes taken at the Executive Board meetings, and why the IMF
operates broadly on a consensus basis, this makes it all the more
necessary to publish the minutes, so that the reasoning behind
the decisions can be fully understood. Whilst it may be clear
to "everybody" who attends the meeting "where a
vote would get to", as long as no such vote is taken and
no formal record of the meeting is made public, it is far from
clear to "everybody" outside the meeting what position
their representatives would have taken. Mr Pickford however highlighted
the Fund's publication of the "Chairman's summing-up of the
[Article IV] discussion" which included "... where there
is a disagreement ... an indication of the balance of the argument,"
as evidence of the greater transparency of the Executive Board
meetings. In his view the IMF "...actually do go quite a
long way in terms of putting out ... anonymised minutes ... which
give you the flavour of the discussion of the Board".[16]
18. We welcome the publication of summaries of Article
IV discussions. However, these summaries are not made available
for every issue discussed by the Board and we think there remains
a case for publishing the full minutes of the Board. In addition,
given that Board votes are comparatively infrequent, we believe
that publication of the UK voting record would send out an important
signal to other countries of the UK's intent to push hard for
much greater transparency. We did not find officials' arguments
against publication of the minutes or of the voting record convincing.
We note that publishing the minutes and the votes of the Monetary
Policy Committee meetings has proved highly beneficial in enhancing
the transparency of the monetary framework. We are concerned that,
without a similar clear record of the proceedings and formal votes
of the Executive Board, the ability of this Committee to hold
our representative at the IMF to account is much reduced. We
therefore strongly recommend that the Chancellor push for a full
publication of the Executive Board meeting minutes and begin to
publish the UK voting record at the IMF immediately.
2 
