The role of the Treasury Committee
in relation to appointments
3. In 1997 the then Treasury Committee proposed that
there should be statutory provision for confirmation of the appointment
of the Governor and Deputy Governors of the Bank of England and
of other members of the MPC by the Committee.[2]
Although the subsequent Bank of England Act 1998 did not make
such provision, the Committee decided to instigate hearings and
make reports on appointments.[3]
The Treasury Committee in the 2001-05 Parliament continued the
practice of its predecessor of holding hearings into appointments
to the MPC and making reports arising from those hearings.[4]
4. Between 1998 and 2003, successive Committees held
20 appointment hearings with members of the MPC, including one
hearing with a re-appointed member.[5]
A full list of the Reports arising from those hearings is set
out in the Annex. In only one case did the Committee call an appointment
into question. [6]
5. The Treasury Committee in successive Parliaments
identified the following three main advantages arising from its
practice of holding hearings and issuing short reports on appointments
to the MPC—
- the practice provided an element
of transparency in the appointment process, thus encouraging those
responsible for making the appointments to appoint persons with
the qualities required;
- the Treasury Committee's involvement assisted
in enhancing public awareness of the operation of the MPC and
the roles played by its individual members; and
- the holding of evidence and the production of
reports by the Treasury Committee secured the closer involvement
of Parliament in an important process.[7]
6. The Government has itself noted that "Appointments
to the MPC are subject to external scrutiny, ex post, by the Treasury
Select Committee".[8]
The Treasury Committee's methodology
7. In 1997 the then Treasury Committee concluded
that candidates for membership of the MPC "should be selected
to meet the twin requirements of demonstrable professional competence
and personal independence from the Government".[9]
When the Committee subsequently determined its approach to hearings
with appointees, it resolved to restrict questioning to issues
of the appointee's personal independence and professional competence.[10]
It also decided to send a preliminary questionnaire to each appointee
prior to the hearing requesting information about the appointee's
career and views on relevant economic issues.[11]
At the start of the 2001-05 Parliament the successor Committee
decided to maintain the restriction on questioning to the two
criteria of professional competence and personal independence,
and also continued the practice of asking each prospective member
of the MPC to complete a preliminary questionnaire.[12]
1 Bank of England Act 1998 (c. 11), section 13. An
"external member" is "external" in his or
her background; he or she becomes a servant of the Bank (Bank
of England Act 1998, Schedule 3, para 4(1)). Back
2
Treasury Committee, First Report of Session 1997-98, Accountability
of the Bank of England, HC 282, para 47. Back
3
Treasury Committee, Third Report of Session 1997-98, Confirmation
Hearings, HC 571, paras 1-3. See also HC (1997-98) 282, para
49. Back
4
Treasury Committee, Fourth Report of Session 2001-02, Appointment
to the Monetary Policy Committee of the Bank of England of Ms
Marian Bell and Mr Paul Tucker, HC 880-I, para 2. Back
5
The "re-appointment" hearing related to Mr Ian Plenderleith:
Treasury Committee, Fifth Report of Session 1998-99, The Monetary
Policy Committee of the Bank of England: Confirmation Hearings,
HC 476-I, paras 5-7. On other occasions, members re-appointed
to the MPC were not the subject of hearings. The Committee did
not hold a separate appointment hearing with Mr Mervyn King following
his appointment as Governor of the Bank of England because he
was already a member of the MPC by virtue of his former position
as Deputy Governor, although the Committee did examine Mr King
in general terms on the prospects for his Governorship: Treasury
Committee, Ninth Report of Session 2002-03, Appointment of
Ms Rachel Lomax as Deputy Governor of the Bank of England and
member of the Monetary Policy Committee, HC 1011, para 3. Back
6
Treasury Committee, Seventh Report of Session 1999-2000, The
Monetary Policy Committee of the Bank of England: Confirmation
Hearings, HC 520-I, para 5. Back
7
Treasury Committee, Sixth Report of Session 1997-98, The Monetary
Policy Committee of the Bank of England: Confirmation Hearings,
HC 822-I, para 1; Treasury Committee, Ninth Report of Session
2000-01, The Monetary Policy Committee-An End of Term Report,
HC 42, para 52; HC (2001-02) 880-I, paras 1-2; HC (2002-03) 1011,
para 1. Back
8
Government Response to the Second Report of the House of Lords
Select Committee on Economic Affairs, Session 2002-03 (HL Paper
66). Back
9
HC (1997-98) 282, para 46. Back
10
HC (1997-98) 571, para 6. Back
11
Ibid, para 8. Back
12
HC (2001-02) 880-I, para 2. Back
