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Banking Bill

The noble Lord, Lord Stewartby, has made a most important point following on from points made by others in this short debate. It would be helpful if the Government could explain the justification for the difference between Clauses 12 and 13 that the noble Lord has drawn attention to. I imagine that, if the current amendment to Clause 13 were carried, ““management, including board membership””, would indeed cover both management and control, and would helpfully align Clause 12 with Clause 13. The noble Lord, Lord Blackwell, asked an important question with regard to the directors of a bank in temporary public ownership; namely, will they be independent or will they be government representatives? The answer to that should be that they will be independent. Today and yesterday the Government have frequently emphasised the need for an arm’s-length relationship for good or ill. Therefore, it is surely evident that the directors should be independent and act in the public interest and in the best interests of customers and the company as a whole. They should certainly not be appointed at the behest of the Government to fulfil government requirements. Noble Lords raised the important point of diversity. My noble friend Lord Sawyer emphasised the need for a wider range of background experience among bank board members than has been customary. It is almost inevitable, and justifiable after the disasters—that is not too strong a word—that have occurred in British banking in the past year, that noble Lords and others should favour a much broader brush approach as regards selecting suitable independent directors. I would not dream of suggesting that there should be positive discrimination in favour of women, as some have proposed. I agree with the suggestion of the noble Lord, Lord Newby, that there should be more diversity than there has been. However, it would be most unwise to go down the route that has been suggested by his noble friend Lord Smith of Clifton of having a certain percentage of women on the board, as is the case in Norway. Above all, merit and value must be the key factors to be taken into account when appointing directors.