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Banking Bill

Effectively, the valuation principles which the independent valuer will have to use may, as my noble friend has just pointed out, be in conflict with the views of the independent valuer. More particularly, the compensation scheme order, again set out by the Government, will presumably specify what the principles are which the independent valuer has to apply. In short, the Treasury is writing the rule book. The independent valuer is told he has to do this or that, apply average values or on specific dates, and so on. This seems to be far more restrictive than ought to be the case. The matter ought to be dealt with by the independent valuer; I should have thought that there is a well established body of opinion on how this ought to be done. Like my noble friend Lady Noakes, I have some doubts with regard to subsection (4). It says: "““Valuation principles may require or permit an independent valuer to make assumptions; such as, for example, that the bank—""(a) has had a permission under Part 4 of the Financial Services and Markets Act…varied or cancelled””." I would not have thought that this is something one makes an assumption about. I would have thought it is a fact: either such an order has been varied or cancelled or it has not. If not, I do not see that the independent valuer can then be compelled to say otherwise. Similarly, while I can see that one may need to make assumptions about whether a bank is able to continue as a growing concern—that seems reasonable—it seems odd to make an assumption about whether it is in administration. I would have thought it either was or was not in administration. The same applies to being wound up: I should have thought either it is being wound up or it is not. I simply do not understand what subsection (4) has to do in relation to an independent valuation of what needs to be paid to compensate those affected by the action which has been taken.