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 timesand
I think the case was 2004when 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
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
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.