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Lord Mackintosh of Haringey: My Lords, with due respect to my noble friend Lord Peston, we are not dealing with professors of economics; we are dealing with the instructions which the Government give to the Bank of England. We say, as Humpty-Dumpty says, "When I say a word, it means what I state it to mean". It means 2.5 per cent. and not too much more and not too much less. If we want to change that, we will change it in accordance with the wording of Clause 12.

After that, I take comfort from the words of the noble Lord, Lord Howell of Guildford, who said that the wording we have is the best that we can do. I loved the grouse moor metaphors of the noble Lord, Lord Stewartby: you cannot follow two birds without the risk of missing them both. When I made my maiden speech many years ago, a noble Lord said later in the debate,"The noble Lord has shot my fox". It is an equally unfamiliar metaphor to me as that of shooting birds. However, I recognise it for what it is; namely, support for the Government and support for our wording. It would not make very much difference which amendments we were to adopt. The amendments on the Marshalled List do not express the more radical views which have been expressed, especially by my noble friends. On the basis that the Government have done the best that they can, I invite the House to reject the amendments and hope that my noble friends and the noble Lord will not insist upon them.

Lord Barnett: My Lords, we have had a most interesting, if brief, debate. I know that the noble Lord, Lord Mackay, loves to bring in a little party politics. Once again, he tried to bring in one of my many successes as Chief Secretary to the Treasury to show that he agreed with the noble Lord. To be honest, I do not care whether or not he does. I believe he said that he was being rather contradictory. However, I shall not comment on his quote about my noble friend Lord Eatwell. There are many economists around, including, among the best of them, my noble friend Lord Peston who attached his name to the amendment.

However, the plain fact is that the noble Lord's amendments agree with the Government. I am glad to see that my noble friend Lord McIntosh agrees with me in that respect. Of course, my noble friend had to call in aid two noble Lords opposite. Indeed, the noble Lord, Lord Howell of Guildford--I nearly called him "my noble friend" because, very often, we tend to agree--said that government objectives can never be clear. But then he was prepared to leave the Government's

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objectives as set out in the Bill. My noble friend Lord Peston and I are seeking to make the Government's objectives even clearer. Indeed, calling in aid what my noble friend said both on Second Reading and in Committee, we used his words to make it clearer.

My noble friend Lord Bruce also did not know the meaning of the term "price stability". I hope that he will forgive me, because I do not intend to go into that. I deliberately avoided referring to Maastricht because I did not wish to provoke my noble friend. I know how easily provoked he is.

The noble Lord, Lord Mackay of Ardbrecknish, prefers price stability to mean zero inflation. There is no use his pointing--the plain fact is that is what he said. He prefers to quote economists and others who believe that price stability has to mean zero inflation. Perhaps my noble friend Lord Peston agrees with that. I see him nodding. That is where my noble friend and I disagree. I do not believe for a minute that one needs to have zero inflation to have price stability. Incidentally, the noble Lord, Lord Howell of Guildford, prefers to leave the Bill as it is. I believe he called the Bundesbank in aid--or rather I believe some of his noble friends did so. The plain fact is that the Bundesbank may not be able to define price stability or economic objectives, but it may be said that it "ain't done too bad" over recent years without being able to define that. If that is what the noble Lord is saying, I tend to disagree with him.

Our amendment makes the matter simpler, not more complicated. We do not propose to give a definition of price stability. I return briefly to what my noble friend said on price stability. He referred to Clause 12(1), which states, that,

    "what price stability is to be taken to consist of, or

    (b) what the economic policy of Her Majesty's Government is to be taken to be".

All we seek to do in our amendment is to do just that. We propose that the Government's objectives on price stability or their economic objectives should be as one. We propose nothing more complicated than that. I know that my noble friend the Minister does not always agree with his brief.

Noble Lords: Oh!

Lord Barnett: My Lords, I do not refer to my noble friend Lord Bruce of Donington. Does he agree on this occasion?

Lord McIntosh of Haringey: My Lords, what a shocking suggestion! Are you inviting me to resign?

Lord Barnett: My Lords, I would never dream of it. I think my noble friend should be promoted, although I would be the last person in the world to recommend it because my recommendations may not necessarily be productive. I would not dream of saying that. All I mean to say is that my noble friend can be flexible in his interpretation of his brief. I had better say for the benefit of the record that he shakes his head. He never disagrees with his brief. However, he can be flexible at times.

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I hope that he does not mind my saying that and going that far. My noble friend was not present when we discussed our previous three amendments--I apologise on his behalf--but I am happy to tell him that they were all totally accepted by the Minister. I hope that he will accept this amendment also because all we seek to do is to spell out exactly what is the Government's policy. Is my noble friend willing to speak again and say that he will accept the amendment?

Lord McIntosh of Haringey: My Lords, I have already indicated to the House that I cannot accept any of these amendments. I have invited my noble friend to withdraw the amendment.

Lord Barnett: My Lords, it is an interesting point that I should withdraw amendments with which I agree. But given that we shall have another opportunity-- I hope--on Third Reading, or whenever, to consider these matters again, I accept my noble friend's request. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 8 and 9 not moved.]

Lord Barnett moved Amendment No. 10:

Page 5, line 16, at end insert ("in their national and regional aspects").

The noble Lord said: My Lords, I had hoped that my noble friend might reply to this amendment. I am sorry that it is grouped with other amendments. For the moment I shall move this amendment to give my noble friend an opportunity to respond to this whole question of regional objectives. I beg to move.

Lord McIntosh of Haringey: My Lords, my noble friend is being perfectly fair. I neglected to address Amendment No. 10 when I responded to this group. It is right that I should discuss it. I understand his concerns but I have already made it clear that Clause 16(2) states that the Bank's Court will keep the procedures of the Monetary Policy Committee under review to ensure that it collects the necessary regional and sectoral information in order to meet its monetary policy objectives. The Bank has a well-established network of regional agents and has a wealth of distinguished regional contacts represented in its Court, enhanced by recently announced appointments. Therefore my first answer to my noble friend is that the amendment is not necessary; its aim is covered.

I am duty bound to respond to the noble Lord, Lord Mackay of Ardbrecknish, who said that the word "regional" would offend the Scots. In Committee I undertook to consult the draftsman again on whether it is appropriate to use the word "regional" to describe information relating to Scotland. The noble Lord will not be too surprised to hear that the draftsman said that it is appropriate. In this context it is clear that the word "regional" is simply being used to describe geographic areas. So in this sense "regional" would encompass Scotland, or the lowlands of Scotland, or it could encompass the lowlands of Scotland and Cumbria as an economic region. There is no offence of any kind

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intended or, I believe, would be taken by the people of Scotland and Wales from the use of the word "regional". I think the noble Lord will find that the word is used in this broader sense throughout legislation and throughout government. On that basis, I invite my noble friend to withdraw Amendment No. 10.

Lord Barnett: My Lords, I am obliged to my noble friend. I did not understand why my noble friend said that he rejects the amendment because it is not necessary. One could equally argue that it will not do any harm to include it as all it does is to spell out what the Government have in mind anyway. My noble friend can hardly say that the amendment does any harm. All he said was that it is not necessary.

Lord McIntosh of Haringey: My Lords, I responded to that point in Committee. With the leave of the House, I said then that unnecessary words of themselves do harm. I believe that is the case.

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