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Banking Bill

I shall speak also to Amendments 133 and 134, which all concern the liquidation committee provisions set out in Clause 97. In a conventional insolvency, the liquidator has to call a meeting of the creditors as soon as possible and set up a creditors committee. That is the right thing to do because the actions of the liquidator can have a bearing on the amounts ultimately yielded for creditors. However, this process is not followed in the Bill. Under Clause 97, the liquidation committee, comprising the Bank of England, the Financial Services Authority and the Financial Services Compensation Scheme, is set up immediately. I do not challenge that point because it is clear that the payment of depositors could well be a priority in terms of timing, although I would add that I argued earlier in Committee that the transfer of banking facilities is of equal importance. However, the priority of giving depositors the ability to access their money should not be allowed to mask the fact that other creditors also have a real need to be involved in the liquidation process as early as possible. Under Clause 97, creditors do not show up on the scene until there has been a full payment resolution confirming that depositors have been substantially or fully paid out. My amendment would allow creditors to assume their natural place on the liquidation committee as early as possible, notwithstanding that the committee would initially be set up without them. The current clause has the Bank and FSA members stepping down to be replaced by creditors. Under my amendments, they would still step down once the full payment resolution had been passed, but until that point the committee would comprise a mixture of outside creditors, the Financial Services Compensation Scheme, which may be a large creditor, the FSA and the Bank. I see nothing wrong with that, but I wonder whether the Minister does. I do not understand why the regime has to be set up to exclude creditors until the Bank, the FSA and the Financial Services Compensation Scheme have decided that they have finished their task. Depending on the kind of bank involved, the outside creditors could be even larger in value terms than those dealt with under the need to pay out depositors. When the Minister replies, will he deal with a technical point in relation to subsection (6)(d), which provides that the FSCS may resign from the liquidation committee? Under subsection (2), the FSCS has never been a member—the member is only a person nominated by the FSCS. I have tidied that up in Amendment 134 but the Minister may like to reflect on whether the clause as it stands is correctly drafted. I beg to move.