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Banking Bill

I thank my noble friend Lord Eccles for his support. We on these Benches are not entirely sure that we agree that the noble Lord, Lord Myners, gave a clear and explicit description of the roles of the various authorities. Perhaps the Minister will take it from me that all is not clear so far as these Benches are concerned. However, that is not the purpose of these amendments. The Minister accuses me of overegging the pudding, but I have sought explicitly not to do that because, again, I have not asked for a statutorily binding description of how the threshold conditions would be used. If the Minister looks at the threshold conditions, he will find that they are general and extensive, and it is clear that not all of them would be relevant in the context of a decision under Clause 7. I thought that Amendment 19 was modest because it simply adds to the guidance that is to be issued under the code of practice in Clause 5. Guidance is just what it says: it gives the FSA flexibility to change under given circumstances, but also imposes on the authorities a requirement to make public how they expect to approach the decisions in Clause 7. The problem is that the FSA wants to play its card close to its chest and not reveal to the outside world how its powers might be used. We do not think that that is good administrative practice; rather, it would be better for the FSA to be more explicit about which aspects of the threshold conditions it was likely to prioritise or what tolerances it would be likely to look at. That is the spirit in which the code of practice has been drafted to date, but for some reason the FSA has managed to convince the Treasury that it should be exempted from disclosing anything about Clause 7. We ought to remember that, as the Minister said, this is about the FSA taking significant action. This is not a routine decision where the FSA says, ““We don’t think we’re going to regulate you until you’ve improved some aspects of the threshold conditions””; rather, it says, ““We are going to take everything away from you””. The potential action under this clause is confiscatory in nature, and can trigger action that will run away from the bank’s owners, creditors and managers. That is why it is incumbent on those holding these powers to be more explicit so that the organisations that might be targeted, and indeed the market as a whole, have a clear understanding of how these powers are to be used. For today, I will withdraw the amendment, but I should say to the Minister that I found his response entirely unsatisfactory. Amendment 19 withdrawn.