Financial Services Bill

Debate between Baroness Noakes and Lord Barnett

Tuesday 6th November 2012 Lords Chamber

[Baroness Noakes]

My Lords, I share many of the frustrations that the noble Lord, Lord Eatwell, has exposed in relation to the reviews that were commissioned, late and inadequate, and I completely accept that the Bank’s response did not seem fulsome. However, I think we have to give the new Government’s arrangements within the Bank a chance. While the Bill says that the Bank will decide about publication, that should be the Court of Directors and, as we know, the Court of Directors has a majority of non-executives. I hope that they will be invigorated by the new context provided by the separate oversight committee. If we keep trying to make functions of the Bank be carried out by the oversight committee we will undermine the court. We need to ensure that the court is strengthened and takes its responsibilities seriously. I also sincerely hope that the Treasury Select Committee in the other place becomes more active in seeking to engage with the non-executives via the oversight committee on how things work in practice.

[Lord Barnett]

My Lords, I agree with my noble friend very strongly indeed. He has made a very strong point. I should declare an interest, I suppose. Until very recently I was probably the oldest living non-executive chairman of a plc. I hope I was a very active chairman. However, I know through many experiences of my own that some non-executive directors do not play a very constructive part, they just take their money and go and do very little—so there are two different kinds of non-executive directors.

I hope my noble friend manages to persuade somebody to change the name from the oversight committee. It is, as my noble friend Lord Peston said, a very strange name to have in the Bill, but it is not the only strange thing in the Bill. I hope the officials who advise the noble Lord, Lord Sassoon, will perhaps come up with a new name but on the whole I would like to commend the officials, particularly those headed by Mr Whiting. He has been extremely diligent in the job he has done on all sides of this Bill, sending things and meeting people. He has been excellent.

I wish I could say the same about the Minister. I like him personally but I cannot say the same about his response to the amendments. My noble friend has made a very important point that an important committee here—whatever we call it, it is now called the oversight committee—can be overruled by the governor. I find that quite unacceptable. I do not know whether the noble Lord, Lord Sassoon, shaking his head means he cannot overrule it. I would be glad to hear that, but that is what it seems to be saying. I would like to hear how he puts that given the wording of the Bill, but for the moment I strongly support my noble friend Lord Eatwell.

Budget Responsibility and National Audit Bill [HL]

Debate between Baroness Noakes and Lord Barnett

Monday 31st January 2011 Lords Chamber

[Lord Barnett]

My Lords, I thank the noble Lord, Lord Sassoon, for his amendments. He referred again to the independence of the OBR but, as he knows, I have all along been concerned with both its relevance and independence.

On relevance, there are dozens of truly independent forecasting bodies all over the country, including the Institute for Fiscal Studies, which used to be chaired by the present chairman of the OBR. The issue concerns itself with the expense of a body such as this when we have not only the forecasts of the independent outside bodies but the Treasury forecasts, the Bank of England forecasts and the OBR forecasts, most of which probably will be broadly in line with the current situation.

We will never know—I have tried to find out on many different occasions—the Government’s view on what should happen when they have the forecasts. The Minister has found all kinds of different ways of not answering my questions about what the Government’s policy is and whether they agree with the Bank of England on keeping interest rates at 0.5 per cent, given the growing pressure—wrongly in many quarters—on the need to increase interest rates. He will not say whether he disagrees—I appreciate that he cannot disagree with or say anything different to what the Chancellor has said—but it would be nice if, at some time or another, he could answer the question of what the Government’s policy is, as opposed to accepting the forecasts, which he has done on numerous occasions.

On the question of independence, I am worried by the constant references in the media to “the Government’s in-house forecasting body, the OBR”. This does not lend itself very well to the independence that we would all like to see in the OBR. I am sure Robert Chote will do his best to ensure that it is truly independent but, if it is no more independent than the dozens of existing bodies, why do we need the OBR at all? That is the question I put to the noble Lord while thanking him for the amendments he has brought forward.

[Baroness Noakes]

My Lords, I add my support for the amendments. It is to the great credit of the Minister that he took away the good discussions we had in Committee and has produced this and the other amendments today.

The noble Lord, Lord Barnett, referred to the OBR being regarded as the Government’s in-house forecasting body. I have never heard it referred to in those terms, although I know that noble Lords on the Benches opposite have tried to make that accusation stick. I believe it is already regarded as a properly independent body under its chairman, Mr Robert Chote, and we should rejoice in that.

Budget Responsibility and National Audit Bill [HL]

Debate between Baroness Noakes and Lord Barnett

Monday 29th November 2010 Grand Committee

[Baroness Noakes]

My Lords—

[Lord Barnett]

The Minister asked us to withdraw our amendments, so I hope that the noble Baroness will forgive me if I reply.

I had hoped that the noble Lord, Lord Sassoon, on this occasion in Committee, when we have tabled serious amendments, would give us a good reason for withdrawing them. I have listened carefully. Neither my noble friend Lord Eatwell nor my noble friend Lord Peston had taken umbrage at the Government’s economic policy and what they seek to deliver—much as my noble friends and I might disagree with the Government. We were putting serious amendments, which it seems from all that the Minister said there is no good reason for rejecting. I can see nothing in the amendments that should cause the Government any problem.

Our amendment relates to the Bank of England Act, which the Government have accepted and are not seeking to amend, whatever they eventually put in the charter. The Minister was not with us when we debated these matters at length. The three words “subject to that” not just implied but provided a clear remit to the Monetary Policy Committee. I am not sure that it always carried out that remit very well or very carefully, or even, as the current governor has recently been saying, that the Monetary Policy Committee was allowed to discuss these things—a report of something that he said implied that he did not want the Monetary Policy Committee to discuss them.

All we are saying, and all my noble friend Lord Eatwell is saying, is that these words should be inserted. I do not recall either of my noble friends taking umbrage at any of the policies that the Government are proposing. That is not the purpose of Committee stage; its purpose is to have a serious discussion about whether an amendment should be accepted. I had hoped that the Minister would look at this first group of amendments more seriously, unlike with his Answers in the Chamber or to our Written Questions, which he seems not to take very seriously. On this occasion, at the start of the Committee stage, I had hoped that he would take it seriously before asking us to withdraw an amendment that has been put down very seriously without any party-political talk. He has not given me any good reason to withdraw it.

[Baroness Noakes]

I have been listening to what my noble friend has been saying. He seems to be saying that we cannot have the words relating to economic policy because we want this to relate to fiscal policy only. If we step back, it seems to me that the economic policy of the Government ought to be as capable as the fiscal policy of being subjected to the transparency objectives that the Government have set out. Indeed, one of the things that the Government are to be genuinely lauded on is their approach to transparency, not only in relation to the Office for Budget Responsibility but also, for example, in relation to the publication of expenditure amounts over £25,000.

Transparency has been one of the watchwords of our Government, but we come to the Bill and, for some reason, we are saying that the Office for Budget Responsibility will be required to look at our fiscal policy mandate only, not at our economic policy objectives. It seems to me that there is a transparency deficit if we are saying that we have to exclude economic policy, as it seems directly related to what the OBR will be doing. The only reason that my noble friend has given is that the Government have decided not to include it. Like other noble Lords, I am struggling for the rationale for excluding the Government’s economic policy.