Economic Performance

HC Deb 06 December 1990 vol 182 cc443-4

10. Mr. Bell

To ask the Chancellor of the Exchequer when he last met the Governor of the Bank of England to discuss Britain's economic performance.

Mr. Mellor

My right hon. Friend the Chancellor expects to meet the Governor of the Bank of England from time to time to discuss a variety of matters.

Mr. Bell

May I congratulate the right hon. and learned Gentleman on his elevation to the Cabinet? Having sat with him through proceedings on the Police and Criminal Evidence Act 1984 and the Children Act 1989, I can well understand and appreciate his grasp of detail. Will he confirm that he will need that grasp when he considers the inflation rate of 10.9 per cent., as opposed to that of our European partners, which is half that rate, and when he sees that unemployment is rising for the seventh consecutive month, that our interest rates are the highest of all of the Group of Seven industrial countries, and that bankruptcies are 90 per cent. up on this period last year? Will not that give food for sombre thought when the Chancellor next meets the Governor of the Bank of England?

Mr. Mellor

I am grateful to the hon. Gentleman for his typically generous words at the beginning of his questions. He has obviously chosen some statistics, but there are plenty of others that pay testimony to the real and sustained improvement in the British economy and in British industrial performance in the past decade. I shall try to be up on all of them.

Mr. Budgen

Will my right hon. and learned Friend report to the Governor of the Bank of England that there is growing support throughout the House for greater independence for the bank and that those arguments exist independent of whether there is any sort of monetary union?

Mr. Mellor

I am aware that there are those who hold that view—I think that quite a lot of other people hold a contrary view. It is by no means demonstrable that a more independent bank would enable the British economy to function more effectively. For instance, the Bank of Japan is one of the least independent banks in the world.

Mr. Boateng

What action do the Government and the Bank of England propose to take to sort out the appalling mess surrounding "swaps" and to prevent any future repetition of that sort of affair in the interests of the City's international reputation?

Mr. Mellor

That matter is under consideration and we are awaiting reports on it. I cannot add anything to that.

Mr. Devlin

What discussions has my right hon. and learned Friend had with the Governor, as the Bank of England is the sole bank of issue south of the Scottish border, about printing its ecu value on one side of a £1 note? If he has had such discussions, will he ask the Governor of the Bank of England for an undertaking that, if such an endorsement is made on every note printed by the bank, the words "Stockton-on-Tees" will not be removed from the back of a £5 note?

Mr. Mellor

With respect to my hon. Friend, the issue of European monetary union is rather more fundamental than what is printed on a note, but I shall bear that matter in mind when we have our future discussions.