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| Version 2 | Version 3 |
|---|---|
| Brown 'opens up' rate-setter jobs | Brown 'opens up' rate-setter jobs |
| (about 1 hour later) | |
| 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. | 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. |
| The way appointments are currently made to the interest-rate setting body has been criticised for being unclear. | The way appointments are currently made to the interest-rate setting body has been criticised for being unclear. |
| In future positions will be advertised and a job specification published. | In future positions will be advertised and a job specification published. |
| 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". | 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 appointments 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 existing 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 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 skillset 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. |
| 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 said the new system was more open and accountable than that used by both the US Federal Reserve and the European Central Bank. |
| "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. | "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 | Criticism |
| The MPC has nine members - five Bank of England staff and four external members appointed by the chancellor. | 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 - but Mr Brown told MPs he wanted to get the "balance right between market skills and academic skills" on the committee. | 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%. | The MPC's brief is to set interest rates to try to ensure that UK inflation is as close as possible to 2%. |
| 'Mistakes' | |
| Mr Brown was offered barbed congratulations by opposition parties in the Commons earlier, in his final Treasury questions before becoming prime minister. | |
| Lib Dem Treasury spokesman Vincent Cable said "general economic stability" was among Mr Brown's "successes" but he also gave a long list of "mistakes" including tax credit overpayments and "rampant" house inflation. | |
| Mr Brown said if there had been "mistakes," it had usually been when the government listened to the Liberal Democrats. | |
| Shadow chancellor George Osborne, for the Conservatives, told the chancellor: "Can I join in congratulating you on the remarkable achievement of surviving 10 years at the Treasury - even if it was twice as long as you wanted." | |
| He asked Mr Brown if Health Secretary Patricia Hewitt would "soon be joining the record numbers of people who are economically inactive?" | |
| Mr Brown told him: "Our government has invested more in the health service, with more results. | |
| "It's difficult to listen to what you say on one day because usually you will have changed your mind by the next - as on grammar schools." |