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Banking Bill

Clause 36: Continuity Amendment 62 62: Clause 36, page 16, line 39, leave out subsection (4) I shall speak also to Amendment 63. These are both probing amendments that would delete subsections of Clause 36 that deal with continuity provisions with regard to property transfer instruments, in order to ascertain the meaning and extent. These subsections do not exist in Clause 18, which applies to share transfers, so I seek to understand what the differences might be. Subsection (4) is deleted by Amendment 62. It says that a property transfer instrument that transfers or enables the transfer of a contract of employment may include provision about continuity of employment. Why is this provision necessary? The Transfer of Undertakings (Protection of Employment) Regulations already provide for continuity of employment when employees are transferred with an undertaking. That term has been tested many times in the courts and in tribunals, and it has been established that an undertaking applies at a fairly granular level within a business. Are the Government saying that they need this clause to provide for rights which exceed those in TUPE? If that is the case, why are they doing it for bank property transfers and not more widely? In addition, subsection (4) is permissive and does not require the instrument to contain continuity provisions. Do the Government expect continuity provisions to be made in every case or do they expect the general law to operate in most cases—the general law being TUPE and any other provisions? Subsection (7), which is deleted by Amendment 63, provides that a transfer instrument may apportion liability to tax between transferor and transferee. Will the Minister explain at what this subsection is aimed? Are particular taxes expected to cause a problem? Will the Minister say what limitations there are, if any, on the term ““liability to tax””? Does there have to be a liability in existence at the date of the transfer or can it extend to liabilities which may arise in future? Is it intended to cover only taxes which arise as a consequence of the transfer, or can it cover other tax liabilities? Can the Minister say how this subsection is to be read alongside tax law? There are many pages of tax law on how taxes are to be paid and by whom as well as on the consequences of non-payment. Does this subsection bind HMRC, or is it intended to operate only as between the transferor and transferee? These amendments were prompted by the disparity between Clauses 36 and 18, but the Minister will see that I also have some substantive probing questions to ask in relation to their operation.