My Lords, we could try giving up and steering in the dark if we want to, but trying to assess as well as we can what is happening in our economy and in the economies of our partners is a necessary part of the way we have to operate. We recognise that all measures will be imperfect. The decision to make changes in the RPI was taken to make it a little less imperfect than it was.

My Lords, the Chancellor has the right policies in place to reignite our economy, growth and competitiveness. We are supporting SME exports and have allocated a huge amount of money for infrastructure investment, including some for regional growth. We are encouraging the free flow of funds from the Bank and fiscal consolidation. With regard to the International Monetary Fund, we cannot recover or be competitive without addressing the huge debt that we have incurred over the past 10 years. Our most important priority is to see how we reduce our national debt.

Purchases by the Asset Purchase Facility (APF) using central bank reserves are intended to implement the independent Monetary Policy Committee’s (MPC) decisions on quantitative easing and are a matter for the MPC. The APF is also authorised to purchase a range of private sector assets, as set out in the then Chancellor’s letters of 29 January 2009 and 29 November 2011.

The transfers from the APF to the Exchequer were agreed in the exchange of letters between the governor and the Chancellor on 9 November 2012. The Treasury discusses a range of policy matters with the Bank regularly. A non-voting Treasury representative is present at all MPC policy meetings.

Purchases by the Asset Purchase Facility (APF) using central bank reserves are intended to implement the independent Monetary Policy Committee’s (MPC) decisions on quantitative easing and are a matter for the MPC. The APF is also authorised to purchase a range of private sector assets, as set out in the then Chancellor’s letters of 29 January 2009 and 29 November 2011.

The transfers from the APF to the Exchequer were agreed in the exchange of letters between the governor and the Chancellor on 9 November 2012. The Treasury discusses a range of policy matters with the Bank regularly. A non-voting Treasury representative is present at all MPC policy meetings.

Purchases by the Asset Purchase Facility (APF) using central bank reserves are intended to implement the independent Monetary Policy Committee’s (MPC) decisions on quantitative easing and are a matter for the MPC. The APF is also authorised to purchase a range of private sector assets, as set out in the then Chancellor’s letters of 29 January 2009 and 29 November 2011.

The transfers from the APF to the Exchequer were agreed in the exchange of letters between the governor and the Chancellor on 9 November 2012. The Treasury discusses a range of policy matters with the Bank regularly. A non-voting Treasury representative is present at all MPC policy meetings.

Purchases by the Asset Purchase Facility (APF) using central bank reserves are intended to implement the independent Monetary Policy Committee’s (MPC) decisions on quantitative easing and are a matter for the MPC. The APF is also authorised to purchase a range of private sector assets, as set out in the then Chancellor’s letters of 29 January 2009 and 29 November 2011.

The transfers from the APF to the Exchequer were agreed in the exchange of letters between the governor and the Chancellor on 9 November 2012. The Treasury discusses a range of policy matters with the Bank regularly. A non-voting Treasury representative is present at all MPC policy meetings.

Purchases by the Asset Purchase Facility (APF) using central bank reserves are intended to implement the independent Monetary Policy Committee’s (MPC) decisions on quantitative easing and are a matter for the MPC. The APF is also authorised to purchase a range of private sector assets, as set out in the then Chancellor’s letters of 29 January 2009 and 29 November 2011.

The transfers from the APF to the Exchequer were agreed in the exchange of letters between the governor and the Chancellor on 9 November 2012. The Treasury discusses a range of policy matters with the Bank regularly. A non-voting Treasury representative is present at all MPC policy meetings.

Purchases by the Asset Purchase Facility (APF) using central bank reserves are intended to implement the independent Monetary Policy Committee’s (MPC) decisions on quantitative easing and are a matter for the MPC. The APF is also authorised to purchase a range of private sector assets, as set out in the then Chancellor’s letters of 29 January 2009 and 29 November 2011.

The transfers from the APF to the Exchequer were agreed in the exchange of letters between the governor and the Chancellor on 9 November 2012. The Treasury discusses a range of policy matters with the Bank regularly. A non-voting Treasury representative is present at all MPC policy meetings.

The Bank of England conducts regular surveys, including, for example, the Agents’ Summary of Business Conditions; the Credit Conditions Survey; and the Bank of England/NOP Inflation Attitudes Survey. The results of these surveys are published on the Bank’s website¹.

The Bank of England publishes a pre-release access list for related documents, in their final form, on its website².¹http://www.bankofengland.co.uk/publications/Pages/other/default.aspx²http://www.bankofengland.co.uk/publications/Pages/other/monetary/TrendsinLending/default.aspx

My Lords, to deal with that last point I will say that we do not need a change in the Bank of England Act because its basic provisions—namely, of inflation-targeting, and this year, as in previous years, we have a 2% inflation target—remain in place. The Chancellor has suggested, in changing the remit, that it would be appropriate for the MPC to deploy new explicit forward guidance, including intermediate thresholds, in order to influence expectations and meet its objectives more effectively.

My Lords, the Bank of England Act 1998 gives powers of operational responsibility for monetary policy to the independent Monetary Policy Committee of the Bank of England. It is for the MPC to make decisions on monetary policy, including the scale of quantitative easing, based on its own judgment and the balance of risks to inflation in the medium term.

As set out in the market notice for the Funding for Lending Scheme, the fee will be determined at the end of the reference period, running from 30 June 2012 to 31 December 2013, based on net lending over that period.

The market notice is available on the Bank of England website¹.¹ http://www.bankofengland.co.uk/markets/Documents/ marketnotice120713.pdf

I bow to the noble Lord’s extensive experience in managing public expenditure. There is absolutely a distinction between what is allocated and what is spent. There is a small additional amount this year that is underspent, but it is in the region of £2 billion, which is consistent with previous years. I agree that that is part of the difference.

The UK will proactively engage in any future international discussions on the issue of a financial transaction tax.

Through international discussions, including those of the G20 in 2011, it is clear that a consensus for the introduction of a global financial transaction tax does not currently exist.

On 14 February, the European Commission published a proposal for implementing a financial transaction tax through enhanced co-operation. This cites existing EU treaty provisions which allow the use of enhanced co-operation where agreement of all 27 member states cannot be achieved.

Under the mutual assistance recovery directive, EU member states provide each other with assistance in the recovery of tax debts and duties. There is no definitive list of these taxes; the directive requires member states to collect unpaid taxes and duties of any kind levied by or on behalf of another member state or its territorial or administrative subdivision, including local taxes, or on behalf of the Union where they meet agreed criteria.

Under the mutual assistance recovery directive, EU member states provide each other with assistance in the recovery of tax debts and duties. There is no definitive list of these taxes; the directive requires the

UK to collect unpaid taxes and duties of any kind levied by or on behalf of a member state or its territorial or administrative subdivision, including local taxes, or customs duties on behalf of the Union.

The Bank of England Act 1998 states that the objectives of the Bank of England are to maintain price stability and, subject to that, to support the economic policy of the Government. Section 12 of the Act requires the Chancellor to specify what price stability is taken to consist of and the Government’s economic policy objectives at least once in every period of 12 months beginning on the anniversary of the day the Act came into force.

The Chancellor specified these objectives in a letter to the Governor of the Bank of England, with a remit for the MPC, on 21 March 2012, alongside Budget

2012¹. The Chancellor specified price stability as an inflation rate of 2% measured by the 12-month increase in the consumer prices index (CPI), which is the operational target for monetary policy. The Chancellor confirmed that the Government’s economic policy objective is to achieve strong, sustainable and balanced growth that is more evenly shared across the country and between industries.

The remit states further: “The framework takes into account that any economy at some point can suffer from external events or temporary difficulties, often beyond its control. The framework is based on the recognition that actual inflation rate will on occasions depart from its target as a result of shocks and disturbances. Attempts to keep inflation at the inflation target in these circumstances may cause undesirable volatility in output”.

A copy of the remit and the Chancellor’s letter to the governor can be found in the Library of the House.

1 http://www.hm-treasury.gov.uk/d/open_letter_from_ chx_to_boe_ 21032012.pdf

My Lords, as the noble Lord will be aware, it is Budget Day tomorrow. That is the day on which the Chancellor will re-express the remit for the Monetary Policy Committee. I am afraid the noble Lord will have to wait for 24 hours .

My Lords, the Bank of England Act 1998 already gives powers of operational responsibility for monetary policy to the independent Monetary Policy Committee of the Bank of England. The Act requires the Treasury to specify the objectives of the MPC at least once every 12 months. The Chancellor set the remit for the MPC at Budget 2012 to target inflation of 2%, as measured by the 12-month increase in the consumer prices index .

The Government did not provide an initial capital sum for the 24 enterprise zones when they were established. Instead, development was incentivised through a combination of business rate relief and local retention of business rate growth, simplified planning and commitment to provide superfast broadband. Enterprise zones in assisted areas are also able to access enhanced capital allowances on plant and machinery.

The Chancellor announced in the last Autumn Statement that the Government would invest £474 million in local infrastructure to support both housing and commercial development. The local infrastructure fund prospectus was published on 25 February, and enterprise zones are invited to bid for the infrastructure required to unlock sites with real growth potential. We have asked for bids by Wednesday 3 April.