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Banking (Special Provisions) Bill

The Committee will have seen from the consideration of the previous amendments, which I moved on behalf of the Government, that we took the report of the Delegated Powers Committee very seriously and examined its recommendations with great care. That is why we produced those amendments. However, as the noble Lord has indicated, we have concerns about other aspects of its recommendations, and I must resist Amendments Nos. 14 and 15. We have taken powers because it is necessary to facilitate the smooth implementation of temporary public ownership. Amendment No. 14 proposes to remove the power of the Treasury to, "““disapply … any specified statutory provision or rule of law””." It is proposed to exercise this power in the Northern Rock transfer order. For example—the noble Lord pressed me on what the examples might be—Article 7 of the draft order, copies of which have been placed in the House, disapplies Section 24 of the Companies Act 1985 in relation to Northern Rock while it is wholly owned by the Treasury. Section 24 of the 1985 Act requires a public company limited by its shares, such as Northern Rock, to have at least two members and imposes unlimited liability on its shareholders and other persons in certain circumstances for breach of that provision. There will be only one member of Northern Rock after its transfer; namely, the Treasury Solicitor. It clearly is not in the interests of taxpayers for unlimited liability to accrue to him. This power is also to be exercised to exclude Ministers, the Treasury and the Bank of England from the application of shadow directorship provisions in the Companies Acts, the Insolvency Act 1986 and the Financial Services and Markets Act 2000. There are precedents for that in Schedule 2(15) to the Commonwealth Development Corporation Act 1999 and other Acts. It is not feasible to provide narrower powers simply because it is not possible to foresee all the circumstances in which the Bill’s different transfer powers might be used. I emphasise that the use of the powers is subject to parliamentary scrutiny and the Government would expect to explain their use of such powers in the customary way. I hope that I have explained to Members of the Committee why the specific circumstance of Northern Rock raises particular necessities for exemption from Companies Acts and other relevant legislation. That is the basis of the Government’s position and why I am asking the noble Lord to withdraw his amendment.