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Lord Montague of Oxford: Perhaps I might make a further point. This does sound rather alluring, but there is an aspect of it that might be rather worrying. We have heard from the noble Lord, Lord Newby, of the tight parameters about the examination that would be given to these confirmatory hearings. Could that tight examination also apply to the press? Surely if the media knew that an individual was going to come up for consideration, they would trawl every aspect of that individual prior to the hearing. It is no good saying to the media, "Oh, it's irrelevant. The Committee cannot take that into account at all". By the time the confirmatory hearing arrives the person's reputation might be ruined. It might also be enhanced, but that is less likely.

I fear that with that prospect, candidates of great quality might not want to risk that. I believe it is a rather dangerous course. We see it with the media at the moment and I would urge that we be a little hesitant at this time until the whole question of confirmatory hearings has been thought through.

Lord McIntosh of Haringey: I am grateful to the noble Lords, Lord Mackay and Lord Newby, for clearly explaining their amendments and the differences between them. I suspect that the differences between them lie more with the fact that the amendments of the noble Lord, Lord Mackay, are about a joint committee of both Houses, rather than the fact that the noble Lord stopped short of giving a veto to his joint committee. In practice, as I am sure he recognises, if a parliamentary committee had declined to give its support to a candidate, it would be very difficult for the Chancellor to press ahead with the appointment, despite the wording of the amendment.

It is true that, if that is the case, we would be embarking on a very substantial change. Like the noble Lord, Lord Newby, I am not against embarking on substantial change, but we must look at the circumstances rather more closely than we have done.

First, let us look for common ground. We agree, and the Bill makes clear, that we are looking for candidates who are selected for their professional competence and personal independence. Clause 13 on the Monetary Policy Committee requires the Chancellor to appoint only people with,


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Noble Lords will agree that the appointments that the Chancellor has made have been welcomed on all sides as meeting those criteria, just as the reappointment of the Governor of the Bank of England has achieved a wide welcome.

The issue of parliamentary confirmatory hearings, however, is indeed a very much wider issue than the Bank of England. I am not suggesting that Giles Radice, the Chairman of the Treasury Select Committee, has delusions of grandeur or that he would suddenly turn strongly about this matter, holding up potential candidates to ridicule and abuse before they even appeared before his committee.

I agree with my noble friend Lord Peston. I do not think that the experience of the United States Senate is a very propitious example for us. The power which the Senate has over the appointment of all sorts of people--ambassadors, judges and who knows what--has been distinctly double-edged. It might have been a necessary result at the time of the framing of the United States Constitution of a particular view of the relationship between the Legislature and the Executive, but we do not have that view of the relationship between the Legislature and the Executive. I am bound to say that the example we have been set in the last 224 years of the effects of the division of powers and the way in which that division of power is implemented by means of confirmatory hearings does not fill me personally with great confidence. I have to say "personally" because, as is well known, the Government have an open mind about whether parliamentary committees should have greater involvement in the selection of candidates.

Lord Boardman: If I may, I would like to recall the Joint Committee between both Houses on the consolidation of Bills, for example. This brings together the best legal minds in this House and in the other place, and it works extremely effectively.

Lord McIntosh of Haringey: Yes, indeed, but there are many examples of effective parliamentary scrutiny. The Government are certainly not against parliamentary scrutiny, whether in a single House of Parliament or in both Houses of Parliament. But that is quite a different issue from confirmatory hearings on individual candidates for particular posts. There is no conflict at all between what I am saying here and our admiration for parliamentary scrutiny, whether of legislation or of any other aspect of public life. We have not in any way opposed the view of the Select Committee, which has already said it will take the opportunity which it has to interview and interrogate individual members of the Monetary Policy Committee and to provide detailed scrutiny of the activity of the Monetary Policy Committee.

I am not sure that I like the example of my noble friend Lord Peston saying to them, "As an academic before you were appointed you said one thing, now you are saying another". I remind him of his hero, John Maynard Keynes, who said:


    "When circumstances change, I change my mind--what do you do, Sir?".

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I agree with that and that he, as somebody who expresses his views and has done all his life, should adhere to doing so.

I am particularly pleased that the noble Lord, Lord Mackay, should feel strongly about this matter since in his Amendment No. 31 he rules himself out from consideration as a member of the Monetary Policy Committee. However, we will come to deal with that later. It is a tribute to his objectivity if not to his judgment.

There are those who feel that this major constitutional change deserves consideration. I am not one of them. The Government are certainly prepared to consider the issue in its broader sense but I have to say that, if they did consider it, it is unlikely that the Monetary Policy Committee of the Bank of England is where it would start.

4.45 p.m.

Lord Mackay of Ardbrecknish: I have to say to the noble Lord, Lord McIntosh, that if that was an offer he was making, I happily withdraw Amendment No. 31.

We have had an interesting debate. There was a slight difference between the noble Lord, Lord Newby, and myself as to whether it would just be the Treasury Select Committee of the other place or a Joint Committee of both Houses. There was also the question of what role either would play in taking evidence and in bringing members of the Monetary Policy Committee before it.

Perhaps I might start with the Treasury Select Committee or the Joint Committee. As the noble Lord, Lord Peston, said very clearly, there is nothing to prevent this House looking at monetary policy; it is taxation matters that we are forbidden to look at. When I looked at this debate in the other place I noticed that it was only the Treasury Select Committee and I remembered the many times at OFT at which I spoke for the Treasury, as does the noble Lord, Lord McIntosh. I was chided for not having debates after we had the Budget and after we had budgetary-type Statements. People pointed out to me that this House had a role to play, even though it was limited in what it could do with regard to taxation. Without flattering anyone or looking at anyone, there are some prominent academic economists and there are some prominent former Treasury Ministers who would certainly perform quite an interesting role in a Joint Committee of both Houses. I decided to bring in the Joint Committee in order to bring this House into play as it rightly should be in play.

I was interested to hear the noble Lords, Lord Barnett and Lord Peston, say that they intended in this new situation to suggest to the powers-that-be that we should consider having a committee in this House on Treasury-type matters where members of the Monetary Policy Committee could be interrogated, brought before the committee and their views explored. That would be a useful step forward.

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The real point here is that of confirmatory hearings. I am in little doubt that the Treasury Select Committee in another place is going to have hearings. Indeed, in its report it said:


    "We believe very strongly in the importance of ensuring that the appointment process is carried out with openness and independence from political influence. We therefore intend, even in the absence of statutory provision, to instigate hearings and make reports to Parliament".

So the Treasury Select Committee intends on its own say-so, to have confirmatory-type hearings, not just hearings after people have been put in post.

I say to the noble Lord, Lord Peston, that the reason I put in,


    "criteria of competence and personal independence",

was simply to try to ensure that any confirmatory hearings did not go down the kind of route that they tend to go down in the United States, where they seem to be much more interested in a person's marital fidelity and so forth than they are in their competence as monetary policy-makers. It was therefore an attempt to limit the kind of ground which a Joint Committee could plough that led me to put in the words that appear in paragraph (a).

We have an had interesting debate. I have a sneaking agreement with those noble Lords who have asked whether we really want to go down the road of the United States. We are quite different, in that the Chancellor, whether he likes it or not, will be called to account in the other place for any appointments he makes. Similarly, I suspect the noble Lord, Lord McIntosh of Haringey, might also be, if some members of your Lordships' House do not particularly like certain appointments.

I can, therefore, see the strength of the argument that confirmatory hearings are introducing into constitution in this country, something which really does not fit with parliamentary democracy on the Westminster model. One can understand it in the divisions of power in the United States, but not here. So, I take the argument, but find it interesting that, whatever is decided upon in this matter, in this House or the other place, the Select Committee is going to have hearings, confirmatory or otherwise. I suspect it will put those involved through the hoops. We should, as a House, look at what role we might play in this important, new field, for which the Monetary Policy Committee is to have responsibility. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 [Functions to be carried out by non-executive members]:


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