Debt Management Office

Lord Barnett Excerpts

Tuesday 20th July 2010 Lords Chamber

[Lord Sassoon]

My Lords, as I have stressed, monetary policy is for the Bank of England. Therefore, it is not for me to comment on the way in which it exercises that responsibility. But the fact is that it took the decisions that it did to purchase assets under the so-called quantitative easing programme in order to meet the inflation target which the Chancellor gives them. The Bank’s latest assessment was that that programme contributed to keeping long-term interest rates 1 per cent below what they would otherwise have been.

[Lord Barnett]

My Lords, the noble Lord has just said that it is not for him to comment on what the Bank of England does, but a senior official at the Treasury sits in on Monetary Policy Committee meetings on a permanent basis. Does he never talk to him?

[Lord Sassoon]

My Lords, it is correct that a senior official of the Treasury sits in on the monthly Monetary Policy Committee meetings, but that official is not a member of the committee. I have performed that function myself on one occasion, and I understood that it was my duty to bring to the attention of the MPC anything the Treasury thought it ought to be aware of.