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Banking Bill

I thank the noble Baroness for the clarity of her explanation. I shall seek to avoid using the term ““flexibility””, at least on this clause, although as a concept it has considerable merit when anticipating the extraordinary circumstances to which this legislation is relevant. However, I shall subserviate the term, should it appear in my speaking note on this clause, in favour of another one. This clause makes provision for dealing with the tax consequences of a transfer made under the special resolution regime in Part 1. Similar provision is included in the Banking (Special Provisions) Act 2008. The tax affairs of an authorised institution are likely to be extremely complex, and the tax implications of the transfers of shares, property and liabilities of such an institution are no less. It is therefore necessary to have a broad power to deal with the various types of tax charges or losses that would otherwise arise as a consequence of a transfer. I should stress that the purpose of the proposal is not to enable the Treasury to impose a new tax charge or to deprive a taxpayer of the use of any tax loss that might arise from having had their shares transferred away from them. That is a very important point. Rather, the intention is broadly to ensure that the tax advantages or disadvantages that are created because of the transfer can be neutralised and that continuity can be preserved, where appropriate. I turn to the amendments in the name of the noble Baroness, Lady Noakes, and the noble Lord, Lord Howard of Rising. I should stress that the purpose of subsection (7) is to ensure that we can, if necessary, update the list of taxes in subsection (2) by order. The amendments would give effect to a suggestion of the Delegated Powers and Regulatory Reform Committee that these orders should be made by the affirmative procedure rather than the negative one. Although the Government take the committee’s views very seriously, in this instance we feel that it is not necessary to adopt the draft affirmative procedure. In determining the list of relevant taxes, we have sought to limit it to taxes for which it is likely that provisions may be needed. However, we recognise that circumstances may change over time, and the order-making power ensures that the Government will be able make the necessary changes so that that all relevant taxes are covered. I should point out to noble Lords that any regulations substantively amending provisions relating to any tax—regardless of whether it is one included in the provisions of the clause or one subsequently added by order—will be subject to the affirmative procedure. It is these regulations, dealing with amendments to tax provisions of any tax added to the list, that will clearly be of most substantive interest to Parliament and external stakeholders. Given that any substantive amendment to tax provisions will be subject to the affirmative procedure, we believe that it is appropriate to retain the negative resolution procedure for this order, relating to the addition of new taxes to the list of those covered by the clause. I therefore invite the noble Baroness to withdraw the amendment.