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Lord Peston: I must congratulate my noble friend. That is masterly! I have to tell him I have always thought of myself as a Smart Alec, but it never occurred

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to me that Clause 12(1) meant several times, and Clause 12(2) then said at least once a year. If that is what it is meant to mean, I could write a clause which said that in those terms and did not require the genius of my noble friend to explain it.

Before withdrawing the amendment, could I ask my noble friend whether that is a Pepper v. Hart intervention?

Lord Barnett: Could I ask my noble friend the Minister--and I entirely take his point--in that case, why can he not accept the amendment?

Lord McIntosh of Haringey: Because it is unnecessary, and because it achieves something which would not necessarily be achieved by "must".

Lord Barnett: Would it do any harm?

Lord McIntosh of Haringey: Yes. Unnecessary amendments do harm.

Lord Peston: I am sorry to pursue this, but on my noble friend's interpretation it is not an unnecessary amendment, assuming he accepts that he has now placed in the proceedings of your Lordships' House the definitive interpretation of this clause. I ask him again, in terms, whether the definitive interpretation of this clause is that "may" means several times and "shall" means at least once.

Lord McIntosh of Haringey: No. "May" does not mean several times; it opens up the possibility of more than once, but it does not mean several times.

Lord Peston: "May" means the possibility of several times, and "shall" means at least once. Can I ask for confirmation of that and then I shall sit down?

Lord McIntosh of Haringey: Clause 12(2) means once a year and it is quite explicit. As to "other occasions", that possibility is opened up by Clause 12(1).

Lord Mackay of Ardbrecknish: Perhaps I may intervene. I absolutely accept that, but it would be a great deal easier if subsection (2) were first. That is the normal procedure: once a year, this has to be done, and then subsections (1) and (3) which is "and other times". It is just a drafting point, but I understand how the draftsmen work.

Lord McIntosh of Haringey: I am happy to seek the draftsmen's opinion on that point.

Lord Peston: I am truly indebted to my noble friend Lord McIntosh of Haringey for those answers which makes the whole day's proceedings seem so worthwhile. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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Lord Mackay of Ardbrecknish moved Amendment No. 19:

Page 5, line 21, at end insert ("or
(c) what the monetary consequences of its fiscal policies are likely to be.").

The noble Lord said: It is clear what I am asking here. When the Treasury gives its notice in writing, of what is price stability to be taken to consist and what is taken to be the economic policy of Her Majesty's Government? I would add a third paragraph, if there are to be three paragraphs: what are the monetary consequences of the Government's fiscal policy likely to be? That would be an indication to the Bank and to the Monetary Policy Committee how they ought to look at their conduct of monetary policy. I could go on a bit longer, but that is sufficient for the Minister to give me an indication of this additional point in the letter that the Treasury will send to the Bank. I beg to move.

Lord McIntosh of Haringey: What a pity! I was prepared to make a very long speech in response to this extremely important and complicated amendment, but now I shall not be able to do so.

Monetary and fiscal policy together affect the level and distribution of demand. The separation of monetary policy from fiscal policy is a discipline against excessive expansion. It is the discipline which Government impose on themselves against excessive expansion and against rising interest and exchange rates. The important point to be recognised is that neither the Governor, nor the Bank, is responsible for setting goals for both monetary and fiscal policy: monetary policy through the specification of the inflation targets, and fiscal policy through its own normal actions. There is no intention of making the two inconsistent.

The Government intend to pursue both a prudent fiscal policy and the goal of price stability in order to achieve the goal of overall stability in the economy. The Government are not intending to do the Bank's job, which would be the implication of the amendment of the noble Lord, Lord Mackay of Ardbrecknish.

Lord Mackay of Ardbrecknish: I should not like to leave the Monetary Policy Committee unemployed. What the noble Lord, Lord McIntosh of Haringey, has said as regards Clause 12(1)(b), is that the economic policy of the Government will be consistent with the target they set the Bank for price stability. On that basis, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Lord Haskel: I think this may be a convenient moment for the Committee to adjourn until tomorrow at 3.30 p.m. The Committee adjourned at twenty-two minutes before eight o'clock until the following day. Fiddle

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