A
BILL
TO

Make consequential amendments pertaining to the Bank of England (Amendments) Act 2021.

BE IT ENACTED by the Queen’s Most Excellent Majesty, by and with the advice and consent of the Lords, and Commons, in this present Parliament assembled, and by the authority of the same, as follows –

Section 1 – Definitions

(1) In this bill “the Act” is the Bank of England Act 1998.

(2) In this bill “the amendment Act” is the Bank of England (Amendment) Act 2021

Section 2 – Amendments to section 11 of the act via the amendment act

Section 2 of the amendment act is amended to read as follows:

In Section 11 of the Act replace Clause A with-
To maintain nominal gross domestic product growth with partial consideration of price stability.

Section 3 – Amendments to subsection 1 of section 12 of the act

Section 12, subsection 1 of the act is amended to read as follows:

The Treasury may by notice in writing to the Bank specify for the purposes of section 11—
(a) what the nominal gross domestic product growth is expected to be,
(b) what price stability is to be taken to consist of, or
(c) what the economic policy of Her Majesty’s Government is to be taken to be.

Section 4 – Target monitoring amendment

Insert after subsection 3 of section 12 of the act the following:

(3B) The Treasury may as part of notices as laid out in subsection 1 specify procedures for joint monitoring of a specific target with the bank, provided that those measures—
(a) are limited to a pre-specified and reasonable period of time, and
(b) do not unjustifiably encroach upon the bank’s regular operations.

Section 5 – Amendments on commencement

Section 3, subsection 2 of the amendment Act 2021 is amended to read as follows:

This Act shall come into force on such day as the Treasury may by order appoint.

Section 6 – Commencement, Extent and Short Title

(1) Sections 3 and 4 of this Act shall come into force on such day as the Treasury may by order appoint.

(2) Sections 2 and 5 of this Act shall come into force immediately upon Royal Assent.

(3) This Act shall extend to the whole of the United Kingdom of Great Britain and Northern Ireland.

(4) This Act may be cited as the Bank of England (Consequential Amendments) Act 2021.

This Bill was written and submitted by /u/WineRedPsy PC MP, Chief Secretary to the Treasury on behalf of the 29th government.

https://legislation.gov.uk/ukpga/1998/11/part/II/crossheading/role-of-the-bank

https://www.reddit.com/r/MHOC/comments/prdzqg/b1256_bank_of_england_amendment_bill_3rd_reading

Opening Speech:

The court case on devaluation has given much reason to pour over the BoE Amendment act, and the inevitable conclusion is that the act as passed by parliament was not entirely fit for purpose even as amended by committee. If the amendment comes into force as currently written, I am afraid that the BoE act will become messy, difficult to interpret, and potentially dangerous to the Bank’s operation.

This Consequential Amendments bill aims to preempt this.

While the amendment act changed section 11 to NGDP targeting, it did not also amend section 12. This is the section that previously allowed the government to have the bank interpret “price stability” as the 2% inflation target. The oversight would then mean we couldn’t actually set a proper growth target, as the act would still only allow inflation targeting. This bill fixes this, while also amending section 11 to clarify that the idea is growth of NGDP, as targeting is meant to, and not just maintaining the same product.

The bill also specifies some additional ways for cooperating with the bank given the new complicated economic targeting model as well as changing the commencement mechanism to be the same as the original BoE act. This is to make sure the reform can transpire in an orderly fashion and not act as a ticking clock for the bank.

No amendments were submitted so the bill goes directly to final division.

Vote below by January 16th at 10pm GMT.