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Banking Bill

As the noble Baroness says, this is a sophisticated not to say complicated Bill which assigns within it distinct roles to the bank, the FSA and the Treasury. As the noble Baroness pointed out, the powers that each is given are qualified by the requirement in the Bill that consultation take place at every point. Followers of the sorry saga of Northern Rock would agree that nobody came out of it desperately well, but I do not think that anybody would argue that the Treasury at every point absolutely had its finger on the pulse and that it, better than the Bank or the FSA, was able to exercise judgment in a way that subsequently seems satisfactory. What slightly concerns me about the first of the noble Baroness’s amendments is that although at one level what she proposes is blindingly obvious, at the end of the day the Treasury always does call the tune. For example, during the Northern Rock saga, at one stage the Treasury informed the interim management of Northern Rock that it had to give preferred bidder status to Richard Branson at a time when that was not the view of the management, far less of the Bank or anybody else. The Treasury was calling the shots. But in that case, and in many others, the Treasury was proved to have exercised poor judgment. My shorthand way of opposing the amendment is almost to say, ““Don’t encourage this””. If the Bill says that whenever the Treasury disagrees with the other actors in a saga it will automatically win, that will encourage Treasury officials to believe that they are in charge of every aspect of the workings of the Bill. I do not believe that that is a good idea. We will therefore not be supporting the amendment.