---

Banking Bill

We shall certainly ensure that the valuer is independent. We seek to distance authorities from the appointment as far as we can. The noble Baroness appears to be saying that a further safeguard needs to be inserted. I shall look at that but I make it absolutely clear that we seek to take the appointment away from government bodies directly to ensure that the procedure will be carried out by someone who is independent of the authorities in order to further guarantee that the person appointed will be considered independent. The appointing person can either make the appointment having regard to any criteria specified in the compensation scheme order, or must select a candidate from a list supplied by the Treasury. This allows for an independent person or panel to appoint a person who has the appropriate skills and expertise to carry out the process of valuation. Subsection (4) ensures that an independent valuer can be removed only by a person specified by the Treasury and on the grounds of serious misconduct or incapacity, ensuring that the independent valuer has security of tenure and a level of independence as far as any removal from office might be concerned. Clause 55 provides that the independent valuer may do anything necessary or desirable for the purpose of, or in connection with the performance of, the function of his office in order that he may carry out his role effectively. Clause 55 further provides that the Treasury may confer other functions on the independent valuer. For example, the Treasury may enable the independent valuer to apply to a court or tribunal for an order requesting information from parties, should this be necessary. The Treasury may also enable the independent valuer to publish, disclose or withhold information at his discretion. The clause therefore provides the valuer with the powers to gather and deal with the information that he needs in order to conduct effectively his valuation function. Finally, Clause 56 sets out the remuneration procedure. Under the provisions of this clause, the Treasury must appoint a monitor to oversee the remuneration and allowances of the independent valuer, which again seeks to bolster the independence of the valuation process. At every stage, the Government have been at pains to ensure that the Treasury is one stage away from decisions that relate crucially to the appointment, performance and remuneration of the independent valuer. We have set out in the primary legislation factors that ensure the independence of the valuer, in particular the conditions surrounding appointment and removal, the powers that we have given, or could give, to him, and the framework for remuneration. We believe that these factors will ensure that any valuer is genuinely independent—which is the objective that we seek, in common with the noble Baroness in her amendments—and has sufficient powers to undertake his functions, which in turn ensures the compatibility of the compensation scheme process with Article 6 and provides confidence to the market in the compensation procedures in the Bill. As these provisions are included in the Bill—I have identified three consecutive clauses in which this is spelt out in considerable detail—I do not believe that further criteria on the independence of any valuer are needed in secondary legislation. The primary legislation is very clear about the nature of the independence of the valuer and how that will be identified and protected in his actions. I reassure the noble Baroness that the independent valuer will be appointed in accordance with the principles of fairness, as prescribed under Article 6 of the European Convention on Human Rights. Accordingly, the independent valuer will be independent from the interested parties, including the authorities and the Bank, and independent of other conflicts of interest, such as those derived from his own shareholdings. This is a requirement in terms of the international position in the European Convention on Human Rights. Of course, we will be fulfilling that requirement in the way in which the independent valuer is appointed. I entirely appreciate the noble Baroness’s concerns that this role must meet the strictest standards of independence. We are governed by the European convention and, of course, by our concerns that are shared with the noble Baroness that this crucial role should have its independence guaranteed. That is why so much is spelt out in primary legislation and why we, therefore, do not accept that additional legislative provision needs to be made in secondary legislation. I hope that the noble Baroness will feel that I have given her the reassurance she needs to withdraw her amendment.