Recent changes to appointment
procedures
3. In June 2007, the then Chancellor of the Exchequer,
the Rt. Hon. Gordon Brown MP, announced in evidence to us three
additions to the appointment procedures for 'external' members
of the MPC—in other words, for the four members who do not
hold executive responsibilities within the Bank of England—as
follows:
- a pre-announced timetable for
new appointments;
- advertisements to invite expressions of interest;
and
- publication of additional criteria on the qualities
and "skills set" that the Government is seeking from
successful candidates.[3]
In our Report published in September 2006 on The
Monetary Policy Committee of the Bank of England: ten years on
we welcomed these changes.[4]
4. The changes announced in June were reinforced
by an announcement by the Chancellor of the Exchequer, the Rt.
Hon. Alistair Darling MP, on 3 July 2007:
To further increase parliamentary accountability
and scrutiny of appointments I am today announcing that, following
their appointment, I will invite the Treasury Select Committee
to convene pre-commencement hearings with all appointees to the
MPC of the Bank of England … These hearings will give the
Committee a full opportunity to discuss with the appointee their
priorities and experience, and for external MPC appointments,
coupled with the reforms announced last month, will allow the
Committee to evaluate their skills and qualities against the published
criteria.[5]
5. On 30 January 2008, at the same time as the Government
provided us with its response to our Report on The Monetary
Policy Committee of the Bank of England: ten years on and
announcements were made about the re-appointment of Mervyn King
as Governor of the Bank of England and of Dr Andrew Sentance as
an 'external' member of the MPC, the Chancellor of the Exchequer
gave further information about future appointments in a letter
to the Chairman of this Committee. The Chancellor stated:
In future, the Treasury will, as far as possible,
publish a timetable for appointment of an external MPC member
before a vacancy becomes available on the Committee and announce
details of who it has decided to appoint, in sufficient time to
be consistent with allowing the Treasury Select Committee three
months for their pre-commencement hearings.[6]
He went on to say:
In the event that I judge that reappointing an individual
to serve a further term is in the best interests of the Monetary
Policy Committee, I will aim to announce my intention to do so
in good time before their existing term is due to come to an end.
Re-appointed members will undergo a pre-commencement hearing in
the same manner as new members, ensuring that all members are
subject to regular process of Parliamentary scrutiny.[7]
6. Hearings with those re-appointed to the MPC are
of considerable value. Such hearings provide a chance to assess
members of the MPC against our criteria in the light of information
acquired during our on-going scrutiny of the MPC's work. Such
hearings also form part of the wider structure of continuing parliamentary
accountability for the work of the MPC, alongside our regular
scrutiny of Inflation Reports and specific inquiries such as that
we conducted last year into The Monetary Policy Committee of
the Bank of England: ten years on. We
welcome the Chancellor of the Exchequer's explicit recognition
of the value of pre-commencement hearings for those reappointed
to the Monetary Policy Committee and his broader commitment to
seek to give three months' notice of appointments to the Monetary
Policy Committee.
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