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Banking Bill

We return to more mundane matters with Amendment 199. I shall speak also to Amendment 200. Clause 233 makes some changes to the tenure arrangements in the Bank of England Act 1998. On the whole we welcome them, together with the somewhat belated conversion to open and transparent appointment processes. However, one important issue remains, which is not addressed by the changes in this Bill. We believe that the governor should be appointed for one non-renewable term. The Government propose two terms of five years. Our amendments propose one term of eight years. There have been two very public reappointments to the office of the Governor of the Bank of England since the Government have been in power, each of which has left a sour taste. In each case there was a degree of briefing, presumably from the Treasury or No. 10, about the likelihood of the reappointment of the incumbents—the noble Lord, Lord George, as he now is, and Mr King. In each case the governor won his re-appointment but not without some loss of dignity to the office of governor. We do not want to see that happen again, and we do not believe that the process of advertising for a reappointment will avoid the problems happening again. The decision will still be made ultimately by the Chancellor and the Prime Minister, whatever processes precede it, and the problems that we have seen will therefore not be avoided. In another place, the Minister’s rationale for opposing our idea of one term of eight years included the extraordinary suggestion that it would deter high-quality candidates. That is just nonsense: there would never be a shortage of candidates for the governorship of the Bank of England. Political interference is a much greater deterrent than length of term and it is that which our amendment seeks to address. I beg to move.