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Brown 'opens up' rate-setter jobs Brown 'opens up' rate-setter jobs
(20 minutes later)
Gordon Brown has announced changes to the way members of the interest-rate setting Bank of England monetary policy committee are appointed. Gordon Brown has said he will open up the process by which his successor as chancellor chooses members of the Bank of England Monetary Policy Committee.
External positions will be advertised with the criteria and timetable for replacing existing members published for the first time. The way appointments are currently made to the interest-rate setting body has been criticised for being unclear.
Mr Brown says he wants to make the process more "open and accountable". In future positions will be advertised and a job specification published.
The committees has nine members - five Bank of England staff and four external members appointed by the chancellor. Asked why it had taken 10 years to make the MPC less "secretive", Mr Brown, who becomes PM in two weeks, said the system had needed time to "bed in".
The new system will be used for the first time in May 2008, when MPC member Andrew Sentance's three year term expires. The new appointments system will be used for the first time in May 2008, when MPC member Andrew Sentance's three year term expires.
The changes follow criticism from the governor of the Bank of England and MPC chairman, Mervyn King, who has said the process - overseen by the Treasury - was "not clear". The changes follow criticism from the governor of the Bank of England and MPC chairman, Mervyn King, who has said the existing process - overseen by the Treasury - was "not clear".
'Openness''Openness'
They also mean Mr Brown's successor as chancellor will be bound by a published set of criteria for making appointments to the MPC.They also mean Mr Brown's successor as chancellor will be bound by a published set of criteria for making appointments to the MPC.
In what will almost certainly be his final appearance before the Commons Treasury Committee, Mr Brown said he wanted to "enhance the openness" of the MPC. In his final appearance before the Commons Treasury Committee, Mr Brown said he wanted to "enhance the openness" of the MPC.
Vacancies will be advertised and the government will publish "additional criteria on the qualities and skills set it is seeking from successful candidates". Vacancies will be advertised and the government will publish "additional criteria on the qualities and skillset it is seeking from successful candidates".
This would "ensure the committee retains an appropriate mix of skills and backgrounds", added Mr Brown.This would "ensure the committee retains an appropriate mix of skills and backgrounds", added Mr Brown.
Asked why it had taken 10 years to make the MPC appointment process less "secretive", Mr Brown said he had wanted to give the system time to "bed in". He said the new system was more open and accountable than that used by both the US Federal Reserve and the European Central Bank.
He told MPs: "We are doing what no other major central bank does, having drawn on experience, but still aware that any appointment is a market sensitive issue." "We are doing what no other major central bank does, having drawn on experience, but still aware that any appointment is a market sensitive issue," he told MPs.
Criticism
The MPC has nine members - five Bank of England staff and four external members appointed by the chancellor.
Mr Brown has been criticised in the past for not moving quicker to replace MPC member Richard Lambert, who stood down from the committee in March.Mr Brown has been criticised in the past for not moving quicker to replace MPC member Richard Lambert, who stood down from the committee in March.
The appointment of academic David Blanchflower has also been questioned. The appointment of academic David Blanchflower has also been questioned - but Mr Brown told MPs he wanted to get the "balance right between market skills and academic skills" on the committee.
Mr Brown, who will take over as prime minister on 27 June, handed control of interest rates to the MPC in 1997, ending a long tradition where the chancellor and the Governor of the Bank of England jointly determined the UK's basic interest rate.Mr Brown, who will take over as prime minister on 27 June, handed control of interest rates to the MPC in 1997, ending a long tradition where the chancellor and the Governor of the Bank of England jointly determined the UK's basic interest rate.
The MPC's brief is to set interest rates to try to ensure that UK inflation is as close as possible to 2%.