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Banking Bill

Clause 26: Supplemental instruments Amendment 53 53: Clause 26, page 12, line 9, leave out subsection (4) I shall speak to the other five amendments in the group as well. They all address the same issue as it arises in Clauses 26 to 31. Those clauses deal with supplemental share transfer instruments, supplemental share transfer orders, onward transfers, reverse share transfers, bridge bank share transfers and bridge bank reverse share transfers. I am sure that these are all essential powers to deal with how to put right things that are not right in the first attempt. I could have drafted similar amendments to Clauses 42 to 46, which deal with the equivalent powers for property transfers, but it was tiring enough going through the various permutations for share transfers. My amendments focus on the provision in Clauses 26 to 31 that Clause 7 and either Clause 8 or 9, as appropriate, do not apply to those clauses. Clause 7 requires the FSA to be satisfied about the threshold conditions; Clause 8 requires the Bank to be satisfied about various things such as financial stability or the protection of depositors; and Clause 9 requires the Treasury to be satisfied to a slightly higher level. These conditions are necessary to trigger the stabilisation powers under Clause 7 and then for the Bank to exercise its private sector purchaser and bridge bank powers under Clause 8, or for the Treasury to exercise its temporary public ownership powers under Clause 9. Various conditions have therefore to be satisfied for the stabilisation powers to be initiated and for the initial share transfers or property transfers to be made, but that is not the case when it comes to all the variants set out in the clauses to which I have referred. I have proposed the deletion of the subsections on a probing basis. The Minister in another place explained in Committee that, if the initial action had stabilised the bank, the conditions could not be met at a later stage. That may well be the case, but the new powers are therefore set to apply in a void. As the Bill is drafted, the Bank or the Treasury can use the powers as and when they choose without context or constraint—there is no purpose driving those clauses as there is for the clauses on share and property transfers. Does the Minister think it satisfactory that these powers are not constrained by words, for example, that link back to the initial exercise of the stabilisation powers? The Bill disapplies the strong constraints applied to the initial powers, but with absolutely no replacement other than general principles of administrative law. I have not sought replacement wording at this stage—as I have said, my amendments are probing for today—but I urge the Minister to look again at whether the removal of the framework that exists for the initial transactions is correct or whether it should be supplemented by some other framework to guide the exercise of the powers that come up in the later clauses. I beg to move.