Gordon Brown was today attacked again over the secretive selection process he uses to appoint external members of the Monetary Policy Committee (MPC), the crucial group which sets UK's interest rates.

He said the process would be more transparent, but George Osborne attacked the measures for not going far enough.

Mr Osborne said today: "The Chancellor is playing catch-up. Last summer I called for reforms to enhance the independence of the Bank. Yesterday I reiterated those calls, setting out four proposals for a more transparent and systematic appointments process. Gordon Brown has belatedly signed up to just one of these reforms, but he has said nothing about crucial questions of non-renewable terms and the role of Parliament in scrutinising appointees."

Mr Brown told MPs at the Commons Treasury Committee that he would invite “expressions of interest” from economists and other relevant experts interested in serving on the nine-strong MPC and, appointments of the four “external” MPC members would follow a clearly set out timetable.

He came in for sharp criticism last year following the resignation of Richard Lambert from the MPC in March and the death of David Walton in June.

For two meetings, the MPC was down to seven members for the first time since the body was set up in 1997. Under the legislation that set up the MPC, the rate-setting body cannot operate without at least six members.

Mr Brown took longer than anticipated to announce their replacements, and Tim Besley only joined the committee in September 2006, followed a month later by Andrew Sentance.

Mr Brown’s appointment of David Blanchflower has also come under fire because Blanchflower still lives in the US and has to commute every month to the UK.

David Kern, Economic Adviser to the British Chambers of Commerce, said: “This is a welcome move by Gordon Brown to make the selection process more transparent. Appointments in the future will now be far less susceptible to accusations of political meddling.”

Mr Brown said his changes would “enhance the openness” of the appointment process.

“We are introducing more transparency and more accountability. We are doing what no other major central bank does,” Mr Brown said.

“Neither the Federal Reserve nor the European Central Bank or other major central bank have a system for publishing a timetable, nor do they invite expressions of interest, and that is what we are proposing to do today.”

Today’s announcement comes ten years after the MPC was first set up and comes after widespread criticism from a raft of Bank watchers.

Last June, Mervyn King, the Bank of England’s Governor, said that the procedure of appointing people to the MPC should be improved. “It’s the timing ... It’s trying to find a mechanism for ensuring that decisions are taken in a timely way,” he said.

A spokesman for the Bank of England said that the Governor welcomed today’s changes.

George Osborne, the Shadow Chancellor, earlier this week urged the Chancellor to go much further. “Appointments of external MPC members should be publicly advertised,” he said. “Applications should be considered by an expert panel chaired by the Treasury. Unlike the current secretive process, the Governor should be involved in the decision. And the decision should be open to formal public scrutiny by the Treasury Select Committee.”

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