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Brown 'opens up' rate-setter jobs | Brown 'opens up' rate-setter jobs |
(19 minutes 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' | 'Mistakes' |
In response to Mr Brown's comments, shadow chancellor George Osborne, said the chancellor was "playing catch-up" in bringing in changes the Conservatives had urged a year ago. | |
After finishing his committee session Mr Brown moved down the corridor to the House of Commons chamber where he was offered barbed congratulations by opposition parties 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. | 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. | Mr Brown said if there had been "mistakes," it had usually been when the government listened to the Liberal Democrats. |
Mr Osborne said: "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?" | 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. | 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." | "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." |