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Banking Bill

I recognise that this is a challenging area for legislation, but we are seeking to deal with a challenging situation. The Government think that this provision is important because there may be circumstances in which a transfer needs to be made at very short notice indeed. It is therefore necessary to modify aspects of legislation in order to make it effective. We are talking about emergency circumstances. In such circumstances, any prior requirement for each House to approve a draft order before it came into force would cause delay during which time the authorities would not be able to address the emergency of the failing bank. The repercussions of this might be disruption in the financial markets. It might place public funds at unacceptable risk, and it might exacerbate financial instability. Surely recent experience has taught us that this is a real possibility. Events move quickly, and the authorities have to act quickly. Of course I accept the Opposition’s criticisms that this does not fall into the pattern of straightforward, normal legislation. It seeks to deal with potential emergency circumstances. Under the envisaged 28-day procedure, however, the order will be subject to a full debate in this House and the other place. It will need to be affirmed by resolutions in both Houses in exactly the same way as the draft affirmative procedure. The only difference is that instruments under the former procedure can come into force earlier. I could understand noble Lords’ reservations about this power if the Bill were about normal circumstances and Clause 75 related to normal circumstances. However, we are dealing—might be dealing—with issues of such significance and such emergency that prompt action by the authorities is necessary. That is why this provision is in the Bill.