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Lord Peston: Before the noble Lord replies, may I ask my noble friend a question which has only just occurred to me, for which I apologise? Clause 15(4) refers to the voting preferences of the members. I do not recall seeing anywhere else in the Bill anything else about voting, or about the internal procedure of the Monetary Policy Committee. It may be somewhere else and I have just missed it, but two questions occur to me. First, is there any obligation for this committee to take decisions by majority voting? Could they not, for example, have a rule that it has to be complete anonymity as to their voting preference? Is there somewhere in the Bill that tells us it must be majority voting? That is my first question. My second depends on the first.
Lord McIntosh of Haringey: Schedule 3, paragraph 11(4) states,
- "Decisions shall be taken by a vote of all those members present at the meeting".
Lord Peston: But it does not say that it should be majority voting.
Lord McIntosh of Haringey: Sub-paragraph (5) states,
- "In the event of a tie, the chairman shall have a second casting vote".
Lord Peston: I am not sure about that and will reflect on it. I raise this for another purpose and it is one that
troubles me wearing my academic hat. There are three possibilities at any meeting: raise interest rates, leave them the same or lower them. It is a well known proposition in voting theory that where there are three possibilities you can have cyclical preferences so that any proposition can have a majority against anything else. Therefore, the person who controls the agenda--the most well known of all the propositions--controls the outcome. The question of voting is not as trivial as I thought it was. I ask my noble friend to reflect on that.To take the obvious point, if the voting of some people is that they most want down and they most dislike up, and there is another group who most want up and dislike down, they may both for protective purposes vote for the status quo even though that is not their first preference and is not, in their judgment, the best thing for the economy. I ought to come back to this when we meet on Report. I realise that technically this is not a trivial matter.
I thank my noble friend for drawing my attention to the part of the Bill which covers this point and ask him to get his expert advisers to brief him, and therefore in due course to brief me and other noble Lords, on whether there could be problems of serious errors in policy arising from a voting system.
Lord McIntosh of Haringey: I suspect that my advisers, with all their admirable qualities, are not academically qualified in the theory of games. I shall reflect on the point that my noble friend Lord Peston has made.
Lord Mackay of Ardbrecknish: The noble Lord, Lord Peston, makes a good point. I can see that the voting might be awkward for the Governor to conduct if there are members looking at all three options. It is probably straightforward if nobody is in favour of one of the options, but if some are in favour of all three, then it could be a difficult decision and you could achieve a muddled compromise which did not satisfy anybody. That is another matter. I would be interested to hear what the Minister has to say once the Treasury has reflected on it, as no doubt it will do.
Lord McIntosh of Haringey: There are not just three options. There is an infinite variety of options. Rates can be raised by different amounts. I know how I would handle it as the chairman of a meeting which is to attempt to secure agreement on the least objectionable alternative, but that does not give a great deal of power to the chairman of the meeting. My noble friend recognises this; let us talk about it again.
Lord Mackay of Ardbrecknish: We had better because it is beginning to sound like the lowest common denominator, which might not be the best way. I am pleased I pursued this because it has raised an interesting issue. I have listened with interest to what the noble Lord, Lord McIntosh, has said. I am not entirely sure that having a six-week gap will remove the pressures from the members two meetings ahead when it comes to looking at what they have done two meetings behind. We know who voted in the January meeting. I
am not entirely sure we would know how they voted when it comes to the March meeting if there were no pressures on them, whereas if we knew how they voted in the February meeting, there would be undue pressures on them. I am not entirely sure that I was convinced by the argument of the noble Lord, Lord McIntosh, when it came to that part.I see the problems. It is a matter of balance between being open and allowing everybody to see what happened, and the problems which could occur in the money market and the economy if in fact people realised too soon what was happening. They might then take steps to guard themselves against what looked like an adverse decision as far as they were concerned at the next meeting. We may well return to this in some form or another. Someone will have to devise a suitable amendment. For the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 15 [Publication of minutes of meetings]:
Clause 16 [Functions of court of directors]:
On Question, Whether Clause 16 shall stand part of the Bill?
Lord Fraser of Carmyllie: Before we move to Clause 16 stand part, perhaps I may say to the noble Lord that I certainly felt there was some attraction in the argument that he advanced in response to the group of amendments beginning with Amendment No. 25. He implied that if one was looking to the way that the committee conducted itself and one wished to ensure that it did not have regard only to opinions in London, instead of prescribing residence or domicile in other parts of the United Kingdom a more appropriate approach might be to give some direction or impose some requirement on the committee that it has regard to other parts of the Kingdom.
The noble Lord made particular play with what is found in Clause 16(2), namely, that,
- "the court's function under subsection (1) shall include determining whether the Committee has collected the regional, sectoral and other information".
One thing, it seems to me, that this committee will not lack is bumf. It is unlikely to have too little information before it, and it would seem to me, accordingly, that the court of directors of the Bank would have an extremely light duty to discharge if it only had to look to see how much information was made available to the committee in coming to its view. It seems to me that we should at some point look to some strengthening of that provision along those lines that the court of directors might have some duty to ensure that "it shall have regard to" that information on regional, sectoral and other matters.
I hope that the noble Lord might reflect on that and not simply restrict it to ensuring that the information is collected.
The other point I want to make on this clause is this. Is Scotland a region? I would advise the noble Lord to think long and hard before he answers that question. The Institute of Chartered Accountants of Scotland regards England as a region for the purposes of its activities there. I am not aware of England being described as a region in any condescending fashion other than in that context.
This is a general point but, I believe, an extremely important one. This is the first time, so far as I am aware, since the Scotland Bill got under way that we have had a chance to consider the use of the word "region" in relation to legislation. The draftsman would seem to be well advised to change this drafting to acknowledge what has been put forward by the Government in their White Paper Scotland's Parliament, which led to the referendum and has now led to the Bill. It is simply incorrect in future to describe Scotland as a region.
I shall not be very helpful in offering any alternative word other than to say that Scotland and Wales have to be included. In my time in government the vogue was to describe Ministers from Wales, Northern Ireland or Scotland as "territorial" Ministers; and a description of Scotland, Wales or Northern Ireland as a "territory" probably would provoke quite as much irritation as the description of those parts of the United Kingdom as "regions". I do not invite the noble Lord to give me an answer now. I am just putting him on notice that there is a very real issue, not only in this legislation but more generally.
The Minister will be well aware that his right honourable friend Mr. Donald Dewar found himself in considerable difficulty recently about an alleged withdrawal of a knighthood for Sean Connery. Those issues are extremely raw in Scotland at the present time and it seems to me incumbent upon this House, in looking to the drafting of legislation, particularly United Kingdom legislation, to ensure that no unnecessary affront is caused to Scotland.
Lord McIntosh of Haringey: I do not know whether the noble and learned Lord, Lord Fraser, was here half an hour or so ago when we were discussing Amendments Nos. 22, 23 and 27. If he was, he would have observed that I very carefully used the phrase "home countries". This is a new phrase to me but it is what is used in Whitehall, and possibly even in Holyrood or St. Andrews House, to distinguish Scotland and Wales--the Kingdom of Scotland and the Principality of Wales--from the English regions. If there is a problem, as there may be, with the use of the word "regions", then we must look at this again. I shall write to the noble and learned Lord, but I must warn him that I have just written a very dense five-page letter to him about the Scottish dimension of the National Lottery Bill, and I do not think he will want another like that in short order.
The noble and learned Lord's worries about the duties of the court, and not having anything to do if that is all it does, are readily dispelled. The court has many more
duties. It is fundamentally responsible for the management of the Bank of England, other than monetary policy.5.15 p.m.
Lord Fraser of Carmyllie: Either I have expressed myself poorly, or the noble Lord has misunderstood me. He made great play of the fact that, if my noble friend and others were concerned that the committee would not have proper regard to regional sectoral interests, our fears ought to be allayed because there was the duty to ensure that it collected information. My point is that I have no doubt that it will have more than sufficient information about the regions, about Scotland, about England and about sectors, but it seems that that is not sufficient. If it were to look, for example, at the piles of papers to be provided to members of the Monetary Policy Committee, I am sure it would very quickly discover that there was more than sufficient information. That is not quite the answer. We are trying to ensure that there is a duty upon the committee to address the issue of the potential differences within the United Kingdom economy as a whole as it affects Scotland, Wales and the regions of England.
I am sure that my noble friend Lord Mackay of Ardbrecknish is correct in saying that we should look specifically at Scotland, because one necessary consequence of the establishment of a parliament in Scotland is that there will certainly be some features where there will be homogeneity in the economy. We want to ensure that the committee has regard to that development.
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