Bank of England (Appointment of Governor) Bill

Debate between Jacob Rees-Mogg and Lord Harrington of Watford

Friday 6th July 2012 Commons Chamber

[Jacob Rees-Mogg]

Historically, there was a much better check on appointments to the Executive, because its members had to resign their seats and stand in a by-election. The public scrutinised appointments to the Cabinet, which was a fantastic system.

[Richard Harrington]

For once in my political career, I am completely speechless. I cannot claim before I scrutinise Hansard tomorrow that I fully understand my hon. Friend’s point, but I am sure that, being the person he is, he is absolutely right.

A further extension of the role of the Select Committee would make a fundamental difference to our system. It is not just a question of extent, as is the spreading practice of giving various Committees different scrutiny roles. Select Committees getting involved in hearings on major executive posts would be a fundamental change, and Parliament should discuss it if Members believe it is the right thing to do. That would an interesting and significant debate.

I would oppose the change. We have all seen the hearings that take place in America on the appointments of judges, Secretaries of State and so on, which are watched live all over the world. Although I do not feel that such hearings add anything to the democratic process, a valid argument can be made for them. However, they should not be introduced on a one-off basis in the case of the Governor of the Bank of England, because that would represent a fundamental change to our system. I do not think many people in this country would support judges being publicly appointed, and the same is true of many other roles including, I believe, the Governor of the Bank of England.

Select Committees are very good for scrutiny—that is their role. The Standing Orders, which I probably do not read enough, state that a Select Committee is

“appointed to examine the expenditure, administration and policy of the principal government departments”.

However, the control of executive appointments is quite different. The importance of that point should not be underestimated.

In 2000, in the report “Shifting the Balance”, the Labour Government stated:

“Any indication that a Ministerial appointment relied upon the approval of a Select Committee or was open to a Select Committee veto would break the clear lines of accountability by which Ministers are answerable to Committees for the actions of the executive”.

That is true. I ask the hon. Member for Hayes and Harlington to consider the fact that the Treasury Committee having a veto over the Governor of the Bank of England might allow a Chancellor or Prime Minister to say, “Well, it wasn’t my doing. That wasn’t the candidate I wanted”. That would give them an excuse, whereas now there is direct and clear accountability to Parliament.

I hope that no one, least of all the hon. Member for Hayes and Harlington himself, thinks I am saying that he has introduced the Bill with anything other than the best intentions, but the point about accountability should be considered. I believe in direct accountability, not in our senior elected politicians—or indeed junior ones such as myself—having an excuse to blame somebody else. I fear that that could be an unintended consequence of the Bill.

I believe in extra accountability and in making Select Committees strong, but I cannot support the Bill, because it goes totally against our current system. It is that system itself that Parliament should discuss and debate at length.