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Banking Bill

Clause 4: Special resolution objectives Amendment 8 8: Clause 4, page 3, line 8, after ““to”” insert ““all of”” I will speak also to Amendment 18. Amendment 8 adds the words ““all of”” to Clause 4(2). This would require the tripartite authorities to have regard to all the special resolution objectives set out in Clause 4. Amendment 18 would require the code of practice issued under Clause 5 to set out how the objectives are to be balanced. It was clear from the debates on this clause in another place that the Government are very unwilling to prioritise the various objectives listed in Clause 4. Indeed, subsection (9) says that they are, "““to be balanced as appropriate in each case””." I am not sure what ““balanced as appropriate”” means in practice, and perhaps the Minister will assist the Committee on that. The evidence to date is that the protection of depositors, which is objective 3, has been the dominant objective in the Government’s mind in their various interventions to date. Let me give the Minister an example on which to base his reply in due course. Objectives 1 to 3 may well involve some cost to public funds. How are those objectives in practice to be weighed against objective 4, which is to protect public funds? There is no appeal procedure against the use of the special resolution regime, with the possible exception of a judicial review, which is a blunt tool. Thus it is important to financial markets generally, as well as to those who might be targeted by the Bill, to know how its provisions are to be used in practice. How this process of balancing is to take place is one element of that, which is why Amendment 18 calls for the balancing process to be a part of the code of practice. Amendment 8 is a variant of this, and would make it clear that the relevant authorities must have regard to all the objectives set out in Clause 4. That is important in relation to the need to protect public funds, because objective 4 might be less obvious to those in the FSA and the Bank of England than, say, to those in the Treasury. It is therefore important that those in the Bank of England and the Treasury take that into account when they approach their responsibilities under the Act. Later amendments seek to add to the list of objectives. Of course, my comments on this amendment apply equally to Clause 4 if it is amended in line with those amendments. I beg to move.