Select Committee on Treasury Minutes of Evidence

Examination of Witnesses (Questions 400-407)


8 MAY 2007

  Q400  John Thurso: What a surprise! What would you say generally about the concept of getting more of a handle on what individual members are thinking?

  Mr Barber: I think there is merit in that but within limits. A balance needs to be struck in this. I agree with Richard's point that the key role in the Committee is in trying to explain the balance of risks going forward. The extent to which that would be enhanced by greater transparency about the exact positioning of individual members I am not sure about. I think periodic opportunities for them to come and give evidence to the Committee here would add value. I am not entirely persuaded by the idea of having a mini-paragraph for each member of the Committee within the Committee minutes.

  Q401  John Thurso: Let me ask you all a broader question. Is there any information or any addition to the statement that is released that you think might be useful, that you would like to see in there that would help people have an understanding and therefore make better decisions, whether it be bargaining for wages or whether it be business planning?

  Mr Lambert: One point which might be worth considering is whether the votes should be published more quickly than they are. As you know, the votes only get published when the minutes come out, which is 10 days after the decision is taken. The argument for doing it that way is: only when the minutes come out can you give the context for the votes that were cast. That is a legitimate argument. Against that, I think it is uncomfortable that what can be very price-sensitive pieces of information should be kept out of the public domain for any longer than is absolutely necessary for them to be kept out of the public domain. That is an area that is perhaps worthy of reflection.

  Q402  John Thurso: What about the idea they have in the United States of a kind of bias statement?

  Mr Lambert: I personally do not think that is a good idea. I think it is important and valuable that the Committee means what it says when it says that it goes into each meeting with a fresh and open mind, determined to look at the data and make a decision accordingly. There have been times—and I think the case was 2004—when rates were picking up from a low point and it seemed appropriate to give a bit more of a steer about the likely continuation of that path, going forward. That seemed to be appropriate, but to have some kind of bias statement as a regular part of life I do not think would be a good idea.

  Q403  Chairman: Is there any more the Treasury Committee can do?

  Mr Lambert: I think the Committee performs very valuable functions in interviewing new candidates. That is a serious event. I should tell you that people who come along here for their first meeting do not come along casually. That is a strong point.

  Q404  Chairman: To get out the flavour of each individual's views, there is the point of view that maybe too much focus is on the Governor. How do we get the views of other members?

  Mr Lambert: I think, personally, when the Governor and his colleagues are here you could throw more questions than you do at other members of the Committee. It tends to be a bit of a one-to-one.

  Mr Barber: The regular sessions that you have with the Governor and others from the Bank I think are an important part of the system. I would not downplay the value of the sessions you already build into your proceedings.

  Q405  Chairman: Brendan, you are a member of the Court and I have a last question for you. You heard us say that Dr Julius, who was an MPC member and a member of the Court, said that it "is a rather grand body with very little to do". You will be aware of some grand bodies with very little to do but does that fit the bill as a grand body with very little to do?

  Mr Barber: It is certainly the case that when most commentators think of the work of the Bank they think of its responsibilities for the interest rate decision and monetary policy, and the greatest public focus is on the MPC and rightly so. The Court's responsibility explicitly is not those monetary policy decisions. It is to support the work of the MPC, to ensure it has sufficient resources to carry out its functions and so on, and it is responsible for the rest of the functioning of the Bank and its responsibilities for financial stability, which are not unimportant. I would certainly agree that in the public mind the MPC responsibilities are the responsibilities they would most identify with the Bank. The Court has other responsibilities. They may not be in the sharpest focus but they are of some value.

  Q406  Chairman: Richard, private equity is mentioned. We are having our own inquiry into that and I do not want to ask you a detailed question about it, but there has been a view that debt and leverage is exclusive to private equity companies and public quoted companies cannot to the same as private equity companies. Could I have a quick answer from you on that.

  Mr Lambert: I spent the weekend drafting a submission to your Committee on this.

  Q407  Chairman: Is it all going to be revealed?

  Mr Lambert: All will be revealed. It is interesting that private equity is having an impact on publicly listed companies and publicly listed companies are starting to look at their balance sheets in a different sort of way from the way they did before.

  Chairman: We will look forward to that. I would like to thank you for your time, particularly in getting together on this. It has been very helpful to us.

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