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Lord Boardman: My Lords, I cannot dispute any of the points made by my noble friend. I agree with them. However, I remind the House of arguments that I put forward in Committee as to retaining the name of the Bank of England. Over centuries it has acquired a reputation for integrity, straightforwardness and competence which is unequalled throughout the world. I have travelled to many international conferences for bankers. The Bank of England stood out supreme by name and reputation. I shall be very sorry to see that lost for something which, although logical, would be misunderstood. Much as I support what my noble and learned friend said, I find it difficult to support the amendment.
Lord Mackay of Ardbrecknish: My Lords, perhaps I may say a few words before the Minister responds. I fully understand the point made by my noble friend Lord Boardman. A number of people have made it over
the past few weeks. The issue was before the Committee and now, thanks to my noble and learned friend Lord Mackay of Drumadoon, it is before this Report stage.Of course the Bank of England has a long history and in financial circles I hope that most people understand that it is the central bank of the United Kingdom. But, frankly, I am not sure that that hope would be realised if I quizzed many people in the financial sector, especially abroad. Like the noble Lord, Lord Newby, I would not have suggested this point on its own, but two things are happening. First, this Bill changes the policy nature of what the Bank of England does; we shall come to the substance of that later. Secondly, and at the same time, a Bill is going through another place, shortly to come before your Lordships' House, which will change the way in which the United Kingdom is governed. For the first time in 300 years there will be a government of Scotland as well as of the United Kingdom. As my noble and learned friend said, that government of Scotland will set up an office in Brussels. It will not be, of course, a member state, but it will be there. If the Government pluck up enough courage to move to a European central bank, with each central bank of a member state having a representative on it, it will become increasingly odd that the representative from the United Kingdom will come from the Bank of England. That is a difficulty.
I sometimes think that the Government have not realised the considerable change to the geography of the United Kingdom that they are making with the passage of the Scotland Bill and the Welsh Bill. My noble and learned friend Lord Fraser of Carmyllie drew the Committee's attention to wording in the Bill relating to the principle of what one calls the Bank. Is it the Bank of England or the "Central Bank of the United Kingdom"? He pointed out the phrase in Clause 16 which states that the Monetary Policy Committee will collect,
- "the regional, sectoral and other information".
My noble and learned friend Lord Fraser of Carmyllie asked where the Scottish information will be collected. Is Scotland a region? I should not need to say this to the Treasury, considering that--I am not sure what percentage of "Scottishness" the noble Lord, Lord McIntosh brings to the Treasury team--there are three and a bit Scots in the Treasury team. They will understand exactly what I mean when I say that the one way to irritate a Scotsman (aside from beating him soundly at rugby as happened yesterday) is to call him English or to call Her Majesty the Queen of England, or to call Scotland a region.
The noble Lord, Lord McIntosh of Haringey, said that a new phrase had been devised: "the home countries". Interestingly, the noble Lord has not come forward with an amendment to the clause to which my noble and learned friend drew attention to get round the problem as regards how Scotland is included in the phrase,
- "regional, sectoral and other information necessary".
The two issues--the perceptions we must now have of the United Kingdom and the roles of the member countries in the United Kingdom--are linked. My noble and learned friend has done us a service in bringing
forward this amendment at Report stage so that we can discuss the matter in this House rather than in the Moses Room.There is a difficult balance between the considerable history of the name of the Bank of England and its status in Britain and around the world, to which my noble friend Lord Boardman referred, and the reality of the new way in which we shall run our country, with governments in Scotland and in Wales. A government in Scotland will have considerable powers. One wonders whether "the Bank of England" is the right name.
A journalist on the Herald, Mr. Ben Brogan, rang the Bank of England after we discussed the matter in Committee. Paraphrasing from memory, he asked, "What do you think of this?" The spokeswoman, I think, of the Bank of England said that she saw the logic of it. If even a spokeswoman from the Bank of England sees the logic of it, I wonder whether the Government will see the logic of it.
Lord McIntosh of Haringey: My Lords, the noble and learned Lord, Lord Mackay of Drumadoon, questioned what position Scotland takes in relation to the United Kingdom. The noble Lord, Lord Mackay of Ardbrecknish, talked about us changing the geography of the United Kingdom. I look at a map with the south at the bottom and the north at the top. Therefore my answer to the noble and learned Lord is that Scotland is where it has always been, on top; and I do not expect any change in that. I do not think that any change in wording is necessary in that respect.
If the noble Lord, Lord Mackay of Ardbrecknish, will forgive me, I do not know whether I am another half Scot on top of those others in the Treasury team. I am only half-Scots. However, I recognise that it was the McIntoshes at the Battle of Culloden who were in the centre of the line who were perhaps the bravest. But they were also foolhardy in that they advanced before the order was given and contributed substantially to the rout of Charles's army. I do not propose to follow noble Lords in the direction of the foolhardiness on which they have embarked.
I am grateful, as I was in Committee, to the noble Lord, Lord Boardman. He said today that the Bank of England is a byword for integrity, straightforwardness and competence. I took care to record what the noble Lord said at Committee stage. He said that the Bank of England was the hallmark of respectability and responsibility throughout the world and he would be sorry to see the disappearance of that name. That is exactly the Government's position. Of course we understand the theoretical correctness of the amendments which have been moved. Of course we understand that there is an illogicality in calling the Bank, which in Europe will represent the United Kingdom, the Bank of England. But it would mean effectively abandoning a reputation built up over more than 300 years. It would mean an irrevocable break with the past.
The risk that I see is that such a change would send the wrong signals and damage the Bank's credibility as an institution. I note that when the European Monetary
Institute considered the role of the Bank of England under the new arrangements it made no reference to the name. I seriously wonder whether we are not anticipating difficulties which are not likely to occur.Although I could have done so, I made no investigation of the cost of such a change. I did not go to see whether the old lady of Threadneedle Street had her name carved in stone above the portals of the Bank. I suspect that throughout the United Kingdom there must be many representations of the Bank of England which would have to be changed if the name were changed. Enough is enough. Let us deal with the serious issues in the Bill. Let us not create a new name for a bank which would be an unknown entity on the world stage. I hope that the noble and learned Lord will not press his amendments.
Lord Mackay of Drumadoon: My Lords, I am grateful to the Minister for responding to the amendment in his characteristically friendly and open manner. While I fully confess to injecting an element of humour into what I said, I believe that underlying this issue there are certain practical difficulties. I hope that once the Bill becomes law, and once the Bank of England seeks to implement its provisions, it will do its best not only to educate the citizens of this country as to its new role, but also to make it clear that it is a different institution altogether from the Bank of Scotland and the Bank of Wales. I thank noble Lords who have contributed to this short debate. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 [Functions to be carried out by non-executive members]:
3.30 p.m.
Lord Mackay of Ardbrecknish moved Amendment No. 2:
The noble Lord said: My Lords, as a brief postscript to the remark made by the Minister in the previous debate as to the amount of "Scottishness" he brings to the Treasury team in reminding us about Culloden, perhaps I may tell him that such is the importance of his clan that the chief of that clan is in fact called "The McIntosh". So we now have two "The McIntoshes", and we shall have to be very careful about the one we face in this House. If the noble Lord moves too far forward of the rest of his troops, I assure him that we shall be on the lookout to cut him down in the way his ancestors were cut down at Culloden.
In Committee we examined on a number of occasions the question of who appoints people to either the court of the Bank of England or to the monetary policy committee. A number of us asked questions at various stages as to why it always seemed to be the Chancellor of the Exchequer--either directly or following consultation. I suggested that the Bank appeared not so much an independent Bank, as the Chancellor of the Exchequer's Bank.
The Minister defended the position of the Chancellor of the Exchequer by pointing out to us that the Chancellor was, on behalf of the people of this country, the shareholder in the Bank of England, and for that reason it was appropriate that he should make the appointments. We shall discuss later a variation in the method of appointment. However, it seems to me that the Minister had a good argument when he asked us who else would make the appointment if not the Chancellor of the Exchequer, given the Chancellor of the Exchequer's position. As a result of the arguments we had in Committee, this is the only amendment that calls into question one of the Chancellor's direct appointments.
I bring this matter before the House because I believe that this is a different kind of appointment from the appointment of members of the court or members of the monetary policy committee. In Clause 3 we are discussing a sub-committee of the court of directors of the Bank, which will have certain tasks delegated to it as outlined in subsection (2). The sub-committee will have a quorum of seven and will be, in a way, the non-executive directors of the bank. One of the things its members will do, for example, is decide the pay of the Governor.
As the Bill stands, the Chancellor, having appointed every member of the court, rather than leave the court or the sub-committee to decide on its own chairman, will designate one of the directors--or rather, he "may" designate one of the directors. We had an interesting discussion on that matter too. I asked a question during the course of discussion on the major amendment as to why the wording was "may" and not "shall". The Minister said that,
That reply answered the question as to why the wording was "may" and not "shall". However, it raised the possibility that the Chancellor and the Treasury conceived of a situation in which the Chancellor would not appoint the chairman of the sub-committee but would leave it to the sub-committee itself. That led me to wonder: as the Chancellor has appointed all the men and women to the court, and may actually allow the sub-committee to appoint its own chairman, why do we not say that the sub-committee should always appoint its own chairman, and at least take one of the appointments inside the Bank's system out of the hands of the Chancellor?
The Minister said that he would reflect on the matter, since a number of other noble Lords joined in the debate on the issue. As he has not tabled any amendments of his own, I can only conclude that, on reflection, he prefers the matter the way it is. Ministers always prefer it the way it is--that is what they are advised to think. However, I would advocate a little independence for the members of the court. They are appointed by the Chancellor, and therefore one assumes that all of them are men and women in whom the Chancellor has confidence. Surely he can leave them to decide who should be chairman of the sub-committee.
I hope that the Minister will accept this amendment. I shall even be content if he tells me that it is not very well worded and that he will return to the matter at Third Reading. However, I feel that the hand of the Chancellor ought to be removed from this very small inside appointment in the Bank, and the sub-committee itself ought to be able to appoint its own chairman. That, after all, is what happens in many outside organisations. I beg to move.
Page 2, line 25, leave out subsection (4) and insert--
("(4) The sub-committee shall elect one of its members to be its Chairman.").
"if he [the Chancellor] does not designate somebody as chairman, then the sub-committee of the court itself will have to make that designation, because Clause 3(7) says that the sub-committee shall be responsible for its own procedures. I hope this answers that question".--[Official Report, 3/3/98; col. CWH29.]
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