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Appointment of Spencer Dale to the Financial Policy Committee House of Commons Treasury Committee Appointment of Spencer Dale to the Financial Policy Committee Eleventh Report of Session 2013–14 HC 1236 House of Commons Treasury Committee Appointment of Spencer Dale to the Financial Policy Committee Eleventh Report of Session 2013–14 Report, together with formal minutes relating to the report Ordered by the House of Commons to be printed 30 April 2014 HC 1236 Published on 02 May 2014 by authority of the House of Commons London: The Stationery Office Limited £0.00 The Treasury Committee The Treasury Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of HM Treasury, HM Revenue and Customs and associated public bodies. All publications of the Committee (including press notices) and further details can be found on the Committee’s web pages at www.parliament.uk/treascom. Current membership Mr Andrew Tyrie MP (Conservative, Chichester) (Chairman) Mark Garnier MP (Conservative, Wyre Forest) Stewart Hosie MP (Scottish National Party, Dundee East) Andrea Leadsom MP (Conservative, South Northamptonshire) Mr Andy Love MP (Labour, Edmonton) John Mann MP (Labour, Bassetlaw) Mr Pat McFadden MP (Labour, Wolverhampton South West) Mr George Mudie MP (Labour, Leeds East) Mr Brooks Newmark MP (Conservative, Braintree) Jesse Norman MP (Conservative, Hereford and South Herefordshire) Teresa Pearce MP (Labour, Erith and Thamesmead) David Ruffley MP (Conservative, Bury St Edmunds) John Thurso MP (Liberal Democrat, Caithness, Sutherland, and Easter Ross) Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via www.parliament.uk. Publication The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at www.parliament.uk/treascom. Committee staff The current staff of the Committee are Chris Stanton (Clerk), Anne-Marie Griffiths (Second Clerk), Adam Wales (Senior Economist), Hansen Lu, Thomas Francis (on secondment from the FCA), Gregory Stevens (on secondment from the Bank of England), and Callum Saunders (on secondment from the NAO) (Committee Specialists), Steven Price (Senior Committee Assistant), Alithea Williams and Paul Little (Committee Assistants) and David Foster (Media Officer). Contacts All correspondence should be addressed to the Clerk of the Treasury Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 5769; the Committee’s email address is [email protected] Appointment of Spencer Dale to the Financial Policy Committee 1 Contents Report Page 1 Introduction 3 Our inquiry 3 2 The appointment of Spencer Dale 4 Background on Mr Dale 4 Our evidence 4 Conclusions 4 Formal Minutes 6 Witnesses 7 Published written evidence 7 List of Reports from the Committee during the current Parliament 8 Appointment of Spencer Dale to the Financial Policy Committee 3 1 Introduction Our inquiry 1. This Report considers the appointment of Spencer Dale as a member of the Financial Policy Committee. On 18 March 2014, the Bank of England announced that, under its new Strategic Plan, “Spencer Dale, currently Chief Economist and Executive Director for Monetary Analysis, will become the new Executive Director for Financial Stability strategy and risk. He will be a member of the FPC and will report to the Deputy Governor for Financial Stability”.1 2. We took evidence from Mr Dale on Wednesday 30 April 2014. He provided a CV and answered our questionnaire prior to giving oral evidence. We thank him for his evidence. 3. In our previous Report on the Appointment of Dr Donald Kohn to the interim Financial Policy Committee, we concluded that: At present, we see no reason to differ from the practice undertaken at appointment hearings into the MPC and the OBR. Personal independence and professional competence are the criteria we will use to assess the suitability of the proposed candidates to the interim FPC.2 These are the criteria we have used to assess the suitability of Mr Dale’s appointment to the statutory FPC discussed in this Report. 1 Bank of England, Strategic Plan: Background information, 18 March 2014, p5 2 Treasury Committee, Appointment of Dr Donald Kohn to the interim Financial Policy Committee , Thirteenth Report of session 2010-12, HC 1052, para 7 4 Appointment of Spencer Dale to the Financial Policy Committee 2 The appointment of Spencer Dale Background on Mr Dale 4. Spencer Dale has worked as an economist at the Bank of England since 1989. From 1997 to 1999 he served as Private Secretary to Mervyn King, who was then the Deputy Governor for Monetary Policy. In that capacity, Spencer Dale participated in the design and implementation of the structures and processes established to support the newly- created MPC. From 2000 to 2006, he was Head of the Bank’s Conjunctural Assessment and Projections Division. From 2006 until 2008, he worked as a Senior Adviser at the Board of Governors of the Federal Reserve System in the United States of America, attending policy meetings of the Federal Open Markets Committee. Since 2008, he has been the Chief Economist and Executive Director, Monetary Analysis & Statistics. He has an MSc in economics from the University of Warwick and has written or been co-author of articles relating to monetary policy strategy, central bank communications and financial markets. Our evidence 5. In oral evidence, we questioned Mr Dale about his new role, the issues facing the FPC, and how he saw himself responding to those issues. The topics we questioned Mr Dale about included: • Whether the MPC and FPC should be one Committee; • The process of his appointment; • The implementation of the Strategic Plan; • Independence and consensus on the FPC, and how consensus should influence FPC members’ communications; • The outlook for the housing market and the responsibility of the FPC towards it; • The FPC’s response to changes in regional house prices; • Concerns about, and the quality of information about, household debt; • Risks to financial stability from IT; and • Public understanding and awareness of the FPC. Conclusions 6. We are satisfied that Mr Dale has the professional competence and personal independence to be a member of the Financial Policy Committee. We wish him every success in this role. Appointment of Spencer Dale to the Financial Policy Committee 5 7. The usual practice of the Bank of England—which the Treasury Committee supports—is to fill Executive Director posts by fair and open competition. This was not done in this case. On this occasion, a case could be made for an exception to the usual practice because of the wider reorganisation of the Bank that was being undertaken and the recent expansion of the Bank’s responsibilities. Nevertheless, we would expect the usual appointment process to be followed in future. 6 Appointment of Spencer Dale to the Financial Policy Committee Formal Minutes Wednesday 30 April 2014 Members present: Mr Andrew Tyrie, in the Chair Mark Garnier Mr David Ruffley Mr Andrew Love John Thurso Jesse Norman Draft Report (Appointment of Spencer Dale to the Monetary Policy Committee), proposed by the Chair, brought up and read. Ordered, That the draft Report be read a second time, paragraph by paragraph. Paragraphs 1 to 7 read and agreed to. Resolved, That the Report be the Twelfth Report of the Committee to the House. Ordered, That the Chair make the Report to the House. Ordered, That embargoed copies of the Report be made available, in accordance with the provisions of Standing Order No. 134. [Adjourned till Tuesday 6 May at 9.45am Appointment of Spencer Dale to the Financial Policy Committee 7 Witness The following witness gave evidence. The transcript can be viewed on the Committee’s website at www.parliament.uk/treascom. Wednesday 30 April 2014 Spencer Dale, Executive Director and Chief Economist, Bank of England List of written evidence The following written evidence can be viewed on the Committee’s web page at www.parliament.uk/treascom. 1 Spencer Dale’s response to the Treasury Committee’s questionnaire 2 Spencer Dale’s CV 8 Appointment of Spencer Dale to the Financial Policy Committee List of Reports from the Committee during the current Parliament All publications from the Committee are available on the Committee’s website at www.parliament.uk/treascom. Session 2010-2012 First Report June 2010 Budget HC 350 Second Report Appointment of Dr Martin Weale to the Monetary Policy HC 475 Committee of the Bank of England Third Report Appointment of Robert Chote as Chair of the Office for HC 476 Budget Responsibility Fourth Report Office for Budget Responsibility HC 385 Fifth Report Appointments to the Budget Responsibility Committee HC 545 Sixth Report Spending Review 2010 HC 544 Seventh Report Financial Regulation: a preliminary consideration of the HC 430 Government’s proposals Eighth Report Principles of tax policy HC 753 Ninth Report Competition and Choice in Retail Banking HC 612 Tenth Report Budget 2011 HC 897 Eleventh Report Finance (No.3) Bill HC 497 Twelfth Report Appointment of Dr Ben Broadbent to the Monetary Policy HC 1051 Committee of the Bank of England Thirteenth Report Appointment of Dr Donald Kohn to the interim Financial HC 1052 Policy Committee Fourteenth Report Appointments of Michael Cohrs and Alastair Clark to the HC 1125 interim Financial Policy Committee Fifteenth
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