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Lord Barnett: Before my noble friend sits down, what is coming through to me is how often committees like the Hampel Committee and the Cadbury Committee get it wrong. They often do, and have done so. I honestly cannot see it, and I have made the point; they do not need this sentence. If that sub-committee is set

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up of members of a named body, one of them will be chosen as a chairman. I can see now why our legislation is as long as it is, because we put in unnecessary sentences. What is the point of having the criticism of this? I am sure the noble Lord, Lord Mackay, would not mind deleting the whole sentence. Why is it in here? Perhaps he can tell us.

Lord McIntosh of Haringey: Let me reflect on all three of the amendments of the noble Lord, Lord Mackay, both the one he put down and the two that he did not put down but discussed. If there is anything to be said at a later stage I will come back.

Lord Stewartby: I hope I "may" raise a question with the noble Lord, because I "shall". In reading this clause and looking at the composition of this committee, right at the top it says that this sub-committee should consist of the directors of the Bank, which is presumably all the directors, both executive and non-executive, although the root of the clause refers only to non-executive directors. I have looked elsewhere in the document and have been unable to find where it is stated that this is a sub-committee which is meant to be of non-executive directors, but I assume that it is pointless if it is a committee of the whole board.

Lord McIntosh of Haringey: No, my Lords, Clause 1(2) states that the court consists of a governor, two deputy governors and 16 directors of the Bank; in other words, the executive committee of directors excludes the Governor and two deputy governors.

Lord Stewartby: I read the same words as the noble Lord. The Governor and the two deputy governors are directors. Are they not directors? Clause 1(1) says:

    "There shall continue to be a court of directors of the Bank",

and Clause 1(2) that:

    "The court shall consist of a Governor, 2 Deputy Governors and 16 directors".

That seems to me to make it clear that they are directors of the Bank.

Lord McIntosh of Haringey: No, there are three groups which are mutually exclusive: there is one Governor, two deputy governors and 16 directors.

Lord Stewartby: Will the noble Lord look at this at leisure? It seems to me that if one says that there should be a court of directors of the Bank and the court consists of different categories which include the Governor and the two deputy governors, I do not see how they can fail to be directors.

Lord McIntosh of Haringey: Schedule 1, paragraph 5(2), states on page 18:

    "A person is disqualified for appointment as director of the Bank if he is a servant of the Bank".

The Governor and two deputy governors are servants of the Bank.

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Lord Stewartby: I thank the noble Lord for that explanation, but in that case it casts doubt on the wording of Clause 1(2). May I suggest that he has another look at that because I believe that it conveys the opposite meaning?

Lord McIntosh of Haringey: I am always willing to have another look at things, but it does not cast doubt.

Lord Mackay of Ardbrecknish: For all that I put the wrong amendment down, or I should have put three amendments down, we have had quite an interesting little chat. I should have remembered the rule that if one is putting down amendments, every time one sees "may" one should put "shall" and every time one sees "shall" one should put "may", but I forgot about that; I was attempting to get to the heart of the matter rather than to put down all the amendments. I well remember the noble Lord and his noble friends putting down amendments to irritate me, as he said; perhaps I should be trying to irritate him!

May I say to the noble Lord that I see what he is saying: the 16 directors are, as explained in Clause 1(2), the non-executive members referred to in the margins of Clause 3. In truth, one has to work quite hard to come to that conclusion and perhaps the noble Lord could look at that.

I am grateful to the noble Lord for saying that he will look at the whole debate we have just had. The amendment of the noble Lord, Lord Barnett, went a little further than mine. I indicated that I thought that the Governor could designate the chairman of the sub-committee, but I can see the argument for going one step further and mentioning the non-executive directors--which is what we are talking about, and they were all appointed by the Chancellor, so I cannot believe any of them will be that unsound as to be not fit to be chairman of this sub-committee. There is merit in the noble Lord having a look at this and I am grateful to him for that. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 agreed to.

Clause 4 [Annual report by the Bank]:

Lord Peston moved Amendment No. 6:

Page 3, line 1, at end insert--
("(ia) the Bank's objectives and strategy as determined by the court under section 2(2),").

The noble Lord said: Although Amendment No. 6 is an amendment to Clause 4, in my attempts to understand Clause 2(2) I wrote in the margin where it refers to the Bank's objectives--this is other than the Monetary Policy Committee--"what objectives?", and therefore what strategy? I was completely mystified by what the court was actually up to.

It then seemed that a more sensible way to amend the Bill would be to add the wording that my noble friend and I have put into Clause 4. What we are anxious to do is to discover what the Bill has in mind by way of those objectives, what is meant by strategy, and then to do it in the way that says that the court will say, "These are our objectives. This is what we are trying to do

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under this general heading. This is our strategy". In due course it will then say, "These were our objectives. This is what we were trying to do, this is how we were trying to do it and these were the outcomes". I hope my noble friend will respond sympathetically to this amendment. It does not change in any way the nature of this prospective legislation. It seems to be an example of what the Committee should be doing, which is to clarify the Bill and make it achieve what I assume the Government were hoping it would achieve. I beg to move.

Lord Mackay of Ardbrecknish: Like the noble Lord, Lord Peston, I wrote in the margin of Clause 3(2)(a) "What are these?" beside "objectives and strategy". I shall be very interested to hear the Minister's explanation in response to the amendment of the noble Lord, Lord Peston, which would require the Bank to spell out its objectives and strategy in its annual report. I presume, because we have just had the debate, that monetary policy will not come into that at all. So what are these objectives and what is the strategy?

Lord Montague of Oxford: All our minds have been working along similar lines. I telephoned the Bank to ask whether it was a fact that it possessed a mission statement, and it told me it did. I asked whether I could have a copy of it, but they said they were sorry but they could not make the mission statement public.

Lord McIntosh of Haringey: I was congratulating myself on the fact that the Bill contained nothing like a mission statement--a particularly objectionable piece of management jargon, as far as I am concerned, and one to which I have objected for many years. I am sorry that they have a mission statement, and I am sorry they did not give my noble friend a copy of it. However, if he looks at the annual report of the Bank, of which I have pages 10 to 15 in front of me, he will see that this covers the Bank's core purposes, which sounds rather close to a mission statement to me, although it takes up a whole page. The report sets out the Bank's strategy, including monetary stability, monetary analysis, monetary operations, banking activities, financial stability, supervision and surveillance, financial structure, other areas, finance and personnel, and implementation. That is quite thorough. It sets forth the Bank's core purposes and strategy for the forthcoming year.

My noble friend's amendment would provide a statement of the objectives and strategy for the previous year, the year which is being reported on. I am not sure whether that is all he wants. I suspect he wants a statement which covers both years in comparable terms, which would seem the sensible way to proceed. It would be best if I say to him and to my noble friend Lord Barnett that we will take their amendments away, consider them, and come back at Report stage with suitable wording which would cover the point which I understand lies behind Amendments Nos. 6 and 7.

Lord Barnett: Before my noble friend sits down, I wonder, when we come to Report stage, whether he will be able to obtain a copy of this mission statement. If it is different from what he has read out to us, I am

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sure the Committee would love to hear it. If there is a mission statement which my noble friend Lord Montague was refused sight of, then the Committee and the House should ask for it. I hope my noble friend will do so.

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