Select Committee on Economic Affairs First Report


Call for Evidence

The Economic Affairs Committee was set up on 7 March 2001, and reappointed on 28 June 2001. It has wide-ranging terms of reference: "to consider economic affairs". The first principal inquiry to be undertaken by the Committee will be an investigation into what is called the global economy. Initially, the important part of the inquiry will be to clarify what is meant by "globalisation" and therefore to consider broad questions along the following lines:

  • How should economic globalisation be defined? Does it mean anything different from an open and integrated world economy? If so, what?
  • Is globalisation a new phenomenon or just a new label?
  • Should the main focus be what is called the real economy or the financial economy?
  • How does globalisation impact on the UK economy, and how does it impact on UK national and international policy making?
  • How does globalisation affect the major world economic institutions?
  • Does globalisation require regulation and, if so, is this possible at the national level, or will the need for international regulation be reinforced?

It is anticipated that these broad questions will give rise to a large number of more detailed questions, spanning both issues relating to the real economy and financial issues. These will include:

1.  What are the driving forces causing globalisation? Are they chiefly real or financial?

2.  How are firms changing their business methods and the international location of their activities? What are the implications of any change?

3.  Has globalisation affected goods and services differently?

4.  How is globalisation affecting employment (a) in the UK, (b) more generally in the advanced world, and (c) in the developing world? What are the implications for skill structure, job security and income distribution?

5.  Who are the gainers and who are the losers?

6.  How will globalisation affect product market competition and consumer choice? How dominant are the transnational corporations? Is their dominance growing?

7.  What is the connection between globalisation and the communications revolution?

8.  What is the connection between globalisation and labour mobility?

9.  Does it matter to a nation who owns its companies, including UK banks and financial markets such as the London Stock Exchange?

10.  How significant is global banking? What role should the government play in determining the capital adequacy of international banks present in London?

11.  Are capital and money markets more interdependent than before? Are international capital flows too volatile? Is international financial instability increasing? Has market uncertainty increased?

12.  Is it important that individuals (and companies and pension funds) should be allowed unlimited access to international capital markets?

13.  What UK government policy responses are required in areas including education and infrastructure investments, social safety nets, and the regulation of financial and other markets?

14.  Bearing in mind the last of the broad questions listed above, what part should international organisations, such as the IMF, the World Bank, the WTO, play in the regulation of globalisation? Should their roles be changed in any respect?

23 July 2001

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