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Banking Bill

Clause 11: Private sector purchaser Amendment 33 33: Clause 11, page 6, line 22, leave out ““commercial”” and insert ““private sector”” Amendment 33 replaces ““commercial”” in Clause 11(1) with ““private sector””. I hope that it is a straightforward amendment which the Minister can accept. The Bill uses ““private sector purchaser”” in the early clauses in describing the stabilisation option. When we get to Clause 11, which is the first place where it is spelt out in detail, the clause is headed ““Private sector purchaser”” but subsection (1) says: "““The first stabilisation option is to sell all or part of the business of the bank to a commercial purchaser””." The term ““private sector”” is very clear and has a clear reference point. So far as I can see, ““commercial”” is not given a particular meaning in the Bill, so we must try to see what it might be in ordinary interpretation. It is pretty clear that ““commercial”” is not synonymous with ““private sector””. We may not have the full range of nationalised industries that existed before my party embarked on privatisation in the 1980s but there are still many examples of bodies that operate from within the public sector on wholly or partly commercial lines. Of course, the Government have added to their number recently by acquiring Northern Rock and Bradford & Bingley’s residual business and, more recently, by taking control of the Royal Bank of Scotland, which I believe has been classified to the public sector. We agree with the Government that the first stabilisation option should be a transfer to a private sector purchaser but we do not think that this option is appropriate in order, say, to transfer a failing bank to one of the other banks that is now in public ownership, which would be commercial but not private sector. However, that is what Clause 11 would allow if the wording remained. If the Government want to increase the number of failing banks in public ownership, they should be prepared to use the powers in Clause 9 and meet the slightly tougher conditions set out there or, indeed, introduce separate legislation. I expressed the hope that the Minister could accept the amendment and I hope that I am not mistaken. I beg to move.