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Banking Bill

At first sight, this is an extremely draconian clause. We have considerable concerns about it because it seems to give the Treasury blanket ability to change the law. However, having read the Treasury memorandum, it is very difficult to see how the operation of the Bill could take place without such a clause. In the case of Northern Rock and Bradford & Bingley, we have seen that the Government had to act very quickly. It was for that reason that, when the Banking (Special Provisions) Bill was going through your Lordships' House, we agreed to the negative resolution procedure. We saw the overriding need for speed in certain circumstances, which was borne out by both Northern Rock and Bradford & Bingley. We therefore accept the rationale for the generality of the clause. Subsection (3) again at first sight looks draconian because it talks about retrospective powers, but the Treasury memorandum sets out why such powers might be needed, and I have to say to the noble Lord, Lord Howard of Rising, that I do not believe the concerns expressed by the banking industry about the subsection. We are here talking only about what happens to a bank that has completely collapsed; we are not talking about the Government being able willy-nilly retrospectively to change the basis on which the generality of the banking sector can operate. Therefore, although we on these Benches have a general aversion to any retrospective powers, without this power and the whole clause, it would be very difficult if not impossible to effect the rest of the powers in the Bill, which I think Members on all Benches agree may be necessary.