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9.51 pm
Mr. Heathcoat-Amory: Proceedings on the Bill have been characterised throughout by the Government's contempt for the House, and this debate has been no exception. This huge change in monetary policy, whereby interest rate decisions have been transferred to a committee of the Bank of England, was first announced not to the House but in a letter to the Governor of the Bank of England. That attitude towards the House has persisted.
The Government have rejected the cross-party position on confirmatory hearings. They have rejected a modest suggestion that not only the decisions of the Monetary Policy Committee but the reasons advanced by its members should be published in the minutes, which is in line with the White Paper on the public's right to know. Now the Chief Secretary asks us whether we are in favour of the Bill. It is rather terrifying that the man who is in charge of the nation's finances cannot remember what happened as recently as 11 November. We gave our reasons for voting against the Bill on Second Reading, and nothing has happened since then to change our minds. Indeed, our careful scrutiny of the Bill in Committee showed up a number of deficiencies that were not clear at the time.
The Bill still worries some Labour Members who were not represented on the Standing Committee and who do not like the idea of transferring decisions on economic policy from elected politicians to unelected bankers and officials. All I can say to them is that they have seen nothing yet. If the Government go ahead with their plan to transfer everything to the European central bank in Frankfurt, those hon. Members will know what it means
to transfer decisions on the British economy offshore entirely. That, however, is for another day and another debate.
In its current form, the Bill will not appeal to those of my hon. Friends who in principle support the concept of an independent central bank. The Bank provided for in the Bill will not be independent like, for instance, the Bundesbank or the Federal Reserve in the United States, and it does not qualify as an independent central bank under the treaty of Rome as amended at Maastricht. Further legislation will therefore be needed if and when we proceed to full economic and monetary union.
Rather than being independent and having genuine discretion in monetary policy, the Bank will work on a short-term contract from the Treasury. The only discretion that it will have, albeit an important discretion, will be in the setting of short-term interest rates; everything else will be decided by the Treasury. The Treasury will make all the appointments to the Monetary Policy Committee, and will ensure that they are all short-term appointments that will not last even for a full parliamentary term.
That brings us to the mysterious affair of the Treasury Committee. Conservative Members adopted in full the suggestions of that all-party Select Committee--
Mr. Darling:
Will the right hon. Gentleman give way?
Mr. Heathcoat-Amory:
I hope that the right hon. Gentleman will forgive me if I do not. I want to finish my speech shortly.
Conservative Members adopted the suggestions of the all-party Select Committee--chaired by a distinguished Labour Member--in regard to asking for confirmatory hearings. It was a modest request, as the Government had signalled in the Standing Committee that they were in favour of the principle. We wanted to ensure not that the House should have nomination rights, but simply that we could make certain that the Bill's requirements were implemented in regard to the competence and independence of candidates for membership of the MPC. That, as I said, had all-party support. Indeed, the Chairman of the Select Committee tabled an amendment to that effect, and one of his hon. Friends--also a member of the Select Committee--spoke in its support.
A Division was called, and all those Labour Members mysteriously disappeared. So much for democracy in the Labour party--but it should worry the House, as an institution, when, after the Opposition have picked up a modest, serious and well-argued proposition advanced in a Select Committee that has subsequently been tabled as an amendment and pressed to a Division, Labour Members are pulled off it by their Whips.
Other deficiencies came to light in the Standing Committee. I must say in passing that most of them were discovered by Conservative Members. The Liberal Democrats are fond of saying nowadays that they are the only people who put up proper opposition, but I must point out that the two Liberal Democrats on the Standing Committee turned up very seldom. I believe that the hon. Member for Twickenham (Dr. Cable) attended only four sittings. As usual, the real task of scrutinising the legislation and providing constructive opposition fell to Conservative Members.
Then there is the mysterious matter of the abstention, or disappearance, of the Paymaster General. We rather wish that he had been present this evening, because we
all have happy memories of his not only attending the Standing Committee sittings, but answering a good many of our debates. For instance, he replied to many of the debates about the method of appointment to the MPC. Yesterday, when we debated the Paymaster General's tax affairs, he did not turn up for that debate, but I really think that someone should have told him that he could come out of hiding this evening, because we were debating not his personal affairs but the Bill on whose Standing Committee he served.
We have had some inadequate replies to the points that we have made, but that does not completely surprise us. The central point is that our opposition to the Bill does not signal our opposition to low inflation. Whereas we met our inflation targets in the previous Parliament, the Government weakened their inflation target, and then missed it in every succeeding month. They have tried to shuffle off responsibility for those decisions on to the Bank of England. They will not succeed in that. We have no confidence in the Bill, and we will be voting against it.
Question put, That the Bill be now read the Third time:--
The House divided: Ayes 207, Noes 116.
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