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Lord Newby: My Lords, I wish to speak on the amendment relating to the appointments to the monetary

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policy committee. In Committee I argued that there was a strong and compelling reason for there to be regional representation among the four appointees. That remains the case. The difference between the growth of different sectors of the economy, which bears differently in different regions, only serves to underline the strength of that argument.

I also argued in Committee that the amendment put down at that stage by the noble Lord, Lord Mackay, was defective in that it unduly constrained appointments to the court. At that stage he argued that one representative should be from Scotland and one from Wales. I still believe that to state that a region or nation should have one of the four as a representative as of right and that Wales, Northern Ireland and--dare I say it--Yorkshire should have to scrabble around possibly for one other regional place seems an imbalance and an undue constraint. Therefore, I cannot bring myself to support the amendment today.

However, I would welcome any assurance that the Minister can give that it is an issue that the Government take seriously. Throughout our discussions on a number of amendments, whenever we have considered the way in which the monetary policy committee is to be viewed from the nations and regions of Britain, the Government have taken a rather cavalier view that as long as there are half a dozen or a dozen good men and women and true from a little charmed circle in the south east taking decisions, everyone will meekly agree that that is the way forward. That seems to me an unduly arrogant and "south-eastist"--if there is such a word--view of the world. It would strengthen the credibility of the committee if there were representatives of the nations and regions of Britain. I would welcome any assurance that the Minister can give that it is something to which the Government will give due consideration.

Lord Molyneaux of Killead: My Lords, I wish briefly to intervene to support the points made by the mover of the amendment. As one who has had experience, though not as a member of the devolved Parliament at Stormont, still less the government at Stormont, I can testify this. On every issue involving public expenditure the blame will land not at the door of the local representatives in Scotland, and not at the door of the First Minister, perhaps to be called a Taoiseach to line up with our friends south of the Border. The blame will be allocated to the Treasury and the Bank of England. The blame will not be attached, oddly enough, to this Parliament at Westminster but to the party in power at Westminster, with no respite. For that good reason, as a sympathiser with noble Lords on the Front Bench, I should not like to see them subjected to the kind of abuse that will be heaped on their heads, no matter what kind of case they try to make. I beg them to think seriously about the amendment.

Lord Peston: My Lords, as the noble Lord, Lord Mackay of Ardbrecknish, is aware, I am sympathetic to the contents of the amendment. But I am not persuaded, for rather general reasons, that what is proposed should be on the face of the Bill. I thought that my noble friend Lord McIntosh said in Committee that it was the

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Government's general view that appointments ought to be made in accordance with the procedures of the commissioner for public appointments. I understood him to say that and I hope he will say something similar now. I regard that as a general statement, nothing to do with appointments to the Bank of England's monetary policy committee. I hope it would be a general characteristic of legislation from now on. It seems a pity to single out the Bill for it because, in due course, with respect to other Bills, one would either have to propose it for every other Bill, rather than the Government saying: "We shall do this generally", or an occasion will arise where we shall say: "What is there about this set of appointments that they will not come under that rubric?"

I hope my noble friend will be able to say either specifically, or in terms of where the Government hope to go, that in broad principle what is in the amendment is right and from now on it will apply to appointments made directly or indirectly by the Government. I hope that that is what my noble friend will say and therefore this is not an amendment to be pressed.

Similarly, on what I dare not call the "Scottish question"--I do not wish to raise the hackles of any Scots--the fact is that on any appointments made in connection with any Bill, someone is bound to say: "What about the Scots?" I take the cynical view that dawned on me in my earlier years here that we ought to pass a Motion at the beginning of every Parliament. Clause 1 would state, "What about the Scots?", and Clause 2 would state: "What about the Welsh?" That would save much of your Lordships' time and be in keeping with the spirit of the age of being highly efficient.

I believe strongly that governments, in making appointments to bodies of this kind, ought not to go for what are called charmed circles. I was a member of such a circle in my time and I am aware of its benefits, but it is quite wrong. One ought to be sensitive to the feelings of people away from central London. I cannot believe that my right honourable friend the Chancellor of the Exchequer is completely unaware of the existence of Scotland and the sensitivities of the Scots. I agree with the noble Lord, Lord Mackay of Ardbrecknish, that not merely was the greatest economist who ever lived a Scot, but that there are plenty of good Scots economists there. I cannot believe that when replacement appointments come up people will be unaware of such matters.

Where I take slight issue with the noble Lord, Lord Mackay of Ardbrecknish, is on the notion that if policy goes wrong--and I tend to feel that interest rates have gone high enough and sterling has gone high enough--it is not only Scotland that will suffer from that policy error but large parts of England will. Therefore, it is a pity if we simply bring up the Scots as the only possible sufferers. It seems to me that the noble Lord, Lord Mackay of Ardbrecknish, has made his points extremely well, but I am not persuaded that they require to be set out on the face of the Bill. If that happened, then every Bill should have such a clause in it, which we would not want to see.

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When my noble friend speaks, I am certain that he will not say, "Who cares about the Scots?" Quite the contrary. I am not convinced that we need the proposed wording in the Bill at this stage. Perhaps I may say directly to the noble Lord, Lord Mackay, that he and I will both see a Scot on the committee before long, in my judgment.

Lord Boardman: My Lords, I support my noble friend's amendment, Amendment No. 14. I wish to add one reason to those he gave why Scotland should be specially considered for a representative of some kind on the monetary policy committee. Banking forms an important part of the Bill. In banking, Scotland has always retained an independence and is somewhat jealous of its banking system which is not generally shared throughout the rest of the United Kingdom. It was necessary in my banking days to treat the Scots somewhat differently; they would insist on that. I believe that they have a powerful case for being represented, not necessarily in the banking sense, but so that they can look to somebody on the monetary committee who they believe will be able to understand the banking affairs of Scotland and represent their case.

6 p.m.

Lord McIntosh of Haringey: My Lords, perhaps I can address each amendment in turn. I thank the noble Lord, Lord Mackay, for agreeing to group these amendments together, though he is right in saying that they are different subjects.

On the issue of the procedures relating to the Commissioner for Public Appointments, I do not intend and would never wish to back down on our manifesto commitment to implement the Nolan recommendations fully. We published a Cabinet Office Paper--Opening up Quangos--which proposed extending the remit of the Commissioner for Public Appointments to nationalised industries and public corporations. That paper was published for consultation in 1997 and the results should be available within the next few months. I can confirm that appointments to the Monetary Policy Committee come within the scope of that consultation.

Noble Lords will recognise that there are unique sensitivities in the Monetary Policy Committee appointments, given the degree of huge market interest in the committee's deliberations and decisions. We certainly need to take those into account. However, I cannot say that we will anticipate the consultation and our response to it only for the Monetary Policy Committee. I can only express our general determination to open up as many public appointments as possible and leave the decision on the Monetary Policy Committee, as for all other public appointments, until the consultation has been completed.

In regard to legislation, clearly it would not be appropriate to put individual references to the Commissioner for Public Appointments into each piece of legislation going through Parliament. If we did that, we would have to do it for all existing legislation on the statute book. Instead, having established the principle and debated it in Parliament, we will proceed to open up appointments to the regime of the Commissioner for

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Public Appointments by Order in Council rather than by what would otherwise be enormously complex primary legislation.

I turn to Amendment No. 14. I recognise the difficulties that noble Lords proposing these amendments face. When different versions were proposed in Committee I was able to say, "If you make appointments taking account of regional needs, the national needs for Scotland, the needs of manufacturing industry and so forth, you crowd out the scope for appointment to what are, after all, only four appointments, whereas the emphasis should be on obtaining the best people regardless of where they come from".

The noble Lord, Lord Mackay of Ardbrecknish, responded to that and fined down his objections to one single point; that is, the need for somebody to be appointed on the advice of the First Minister of the Scottish executive. In doing so, he is once again leapfrogging the Government. The way in which the noble Lord embraces Scottish devolution with a passion and almost an extremism that was not apparent at the time of the general election somewhat surprises me. He is also now accepting the embrace of the National Union of Students and the Scottish Trades Union Congress. That is fine. I leave him on his road to Damascus and simply stand back and admire.

In this case there would be considerable difficulty in selecting one interest, however important and valuable and however much the words,

    "Of the four members appointed under subsection (2)(c) one shall be appointed on the advice of the First Minister of the Scottish Executive",

should appear on the face of the Bill. I am not clear what the phrase "on the advice" means. Perhaps the noble Lord, Lord Mackay, can enlighten us. To me it means that one must take the advice once it has been offered. I assume that is what it means. In effect therefore it is a weasel word for nomination from the Scottish executive.

When talking of the Monetary Policy Committee, we must remember that this country has only one currency. I acknowledge to the noble Lord, Lord Boardman, that we have a somewhat separate banking system in Scotland. But monetary policy is concerned with one currency and the average of prices throughout the whole of the United Kingdom. The Monetary Policy Committee must consider developments in all regions of the United Kingdom. That is why we have a requirement in Clause 16 that the committee should collect and consider,

    "the regional, sectoral and other information necessary for the purposes of formulating monetary policy".

There is a network of regional agents to ensure that the committee is fully aware of development in the regions.

I understand the reason for picking out Scotland in order to avoid the arguments which I put against these amendments at Committee. But the noble Lord, Lord Newby, has the message. Once we start on that road, will we continue with Wales, with Yorkshire and then go back to the needs of manufacturing industry?

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All those are important, and Scotland no less and almost, in some ways, more important because of devolution. However, a requirement of this kind cannot be put on the face of the Bill, otherwise the fundamental objective of forming the Monetary Policy Committee from the best and most highly qualified people for the job would be frustrated. I therefore invite the noble Lord to withdraw his amendment.

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