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Banking Bill

Amendment 17 17: Clause 5, page 3, line 33, at end insert— ““( ) the meaning of the stability of the financial systems of the United Kingdom,”” We managed to stretch the Clause 4 stand part debate to a considerable degree, but with the next amendment I think that we will stay fairly narrow. Amendment 17 would amend Clause 5, which requires the Treasury to issue a code of practice. My amendment adds the new requirement that the code should contain, "““the meaning of the stability of the financial systems of the United Kingdom””," which is the wording that we find in the special resolution objectives. When the meaning of financial stability was debated in another place, largely in connection with Part 7, to which we shall come at some point this year, it was recognised that the term can have several meanings—some narrow and some broad. That emerged from the evidence given to the Public Bill Committee in another place before it commenced its detailed consideration of the Bill. The Government argued in relation to both Part 7 and Clause 5 that a definition of financial stability should not appear in the Bill. In the case of Clause 5, they say that it should be in the code. We do not have a problem with that in principle, because the draft code indeed contains a definition of financial stability; we welcome that. We are concerned that that crucial aspect of the detail underpinning the special resolution objectives as set out in Clause 4 should be a positive requirement of the code. Clause 5(2) sets out quite a lot of process for what should be in the code but not enough meat. My amendment adds a little flesh to the bones of Clause 5. I suspect that we are not far from the Government on this point, because they have included a definition of financial stability in the draft code. The problem is that the current draft may not last for all time. Indeed, it might not even make it to the final version. There is also the possibility that the code will be revised many times over time, and we want to ensure that whenever that occurs, given the importance of the phrase in the context of the special resolution objectives, the code always contains that definition. We agree with the Government that a definition is more flexible in a code than it is in legislation; but, that being the case, we believe that the code should be in legislation. I beg to move.