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Banking Bill

I am grateful to both noble Lords who have spoken in this short debate, but especially to the noble Lord, Lord Newby. Save in one respect, he has already adumbrated the two main arguments that I was going to present on the issue. Of course the Government are sensitive about retrospective legislation, but it is necessity that drives our position. As the noble Lord, Lord Newby, said, provisions very similar to these in the special provisions Act were used to modify legislation to make the transfers of Northern Rock and Bradford & Bingley effective. That reflects the fact that we are not dealing with normal circumstances; we are dealing with crisis circumstances where some element of setting aside the bar on a retrospective dimension to the law is necessary. In our discussion of the previous amendment, the noble Baroness cited the deliberations of the Delegated Powers and Regulatory Reform Committee. We pay due regard to those, but so do the Opposition. They will have noticed that the committee made no reference to the retrospection of the power when it discussed Clause 75, so it did not raise for the committee the concerns to which the noble Lord, Lord Howard, gave voice when he moved Amendment 122. Amendments 123 and 124 are inappropriate. They would introduce considerable uncertainty into the effectiveness of the power provided by the clause, which is of great significance. A vote would involve a significant number of agreements with different parties. At the time of resolution, there is likely to be a considerable number of contracts entered into before the use of stabilisation powers, which will continue to subsist following the use of those powers. If we accepted the noble Lord’s amendments, those types of contract would be covered by different law to those contracts entered into after the use of the stabilisation powers. If anything would create legal uncertainty, it would be that. It would jeopardise the success of the resolution, which could ultimately put off a private sector purchaser from agreeing to buy a failing bank. The amendment is inconsistent with the common approach to change in the law. When legislation is amended, it affects all relevant activities, not just those that commence after the legislation's commencement, otherwise, if a new tax were introduced for a certain type of employee or sector, it would not apply to those employees whose contract was signed before the tax came into force. We all recognise that that does not obtain. I appreciate the noble Lord’s concern about any retrospective aspect to legislation. We should all be on our guard on that issue, and it is the job of the Opposition to probe when there are elements of it, but I hope that he appreciates the Government's defence of the issue and that the necessity for the clause to pass unamended is paramount.