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Banking Bill

I understand why this clause has arisen but, like other noble Lords, I have come to the conclusion that the Bill probably does not require it. The issue I have most sympathy with is whether the valuer should be required to make the determination of whether the bank would have been viable in the absence of government action. That is a decision which, under the Bill, we are requiring the FSA, in the first place, to make. The independent valuer is required to rely on the judgments that have been made but, in fact, under Clause 7, the institution will be in this process only if the FSA has determined that it does not pass, or is unlikely to pass, the threshold requirement of continuing as a financial institution. In effect, therefore, the valuer can start with the presumption that it is not a viable ongoing entity without this being spelt out by the valuation principles. The other aspects of the principles that the Treasury or others might want to put to the valuer are perfectly reasonable parts of the evidence that the valuer would be perfectly entitled to take into account. They do not need to be laid down as principles which are required to be taken into account. The problem is that, in order to satisfy the Treasury that all these principles are going to be considered, the clause leaves open such wide scope for the valuer to be dictated to that the whole notion of an independent valuer begins to be undermined. If this clause is to remain in the Bill, I should like to understand how the dictation of these valuation principles affects any grounds of appeal. Would an appeal be able to take account of whether the valuation principles that had been dictated were appropriate, or would it have to start from the basis that the valuation principles were outside the appeal process?