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Banking Bill

The Government’s response to this amendment is fairly straightforward, and, I hope, constructive. I hope that the noble Baroness will feel that she has received a proper reply. Clause 61 sets out the sources of any compensation and subsection (2)(c) refers to ““any other specified person””. The noble Baroness has indicated that that gives rise to suspicion. I hope that we have sufficiently identified the Government’s actions in these terms to be beyond suspicion. Nevertheless, I recognise the noble Baroness’s obvious right to probe us on this. Let me provide an example of who are meant by ““any other specified person””. I have not got a little list, a big list or even a microscopic list. I have a category, and if I can I shall provide more, or an illustration of the nature of the situation which has obliged us to set out the Bill in those terms. Where a price agreed between a private sector purchaser and the Bank of England was felt to reflect the market valuation of the failing bank at the time of the transfer, the Treasury could specify in the compensation scheme order that the price agreed was deemed to be the compensation to be paid. The provision would facilitate this by making it clear that the compensation payment—in this case, the price paid by the purchaser—may originate from sources other than the norm—either the Financial Services Compensation Scheme or the Treasury. All that we seek to do in this respect is identify that the norm is envisaged as certainly being those two, but it is possible that an agreement could be struck by the Bank of England which does not involve those. We are seeking to make provision for that eventuality in circumstances where, I hasten to add, yet again we are not in a position to envisage every possible significant development with regard to these negotiations and developments. However, we have to construct the legislation in such a way that it does not inhibit or prohibit action which might be very much in the interests of the parties concerned because it is drafted too rigidly. That is why the subsection is set out in those terms.