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Banking Bill

Clause 129 allows the Lord Chancellor, with the agreement of the Secretary of State and Lord Chief Justice, to modify the provisions of the bank insolvency procedure for banks that are partnerships rather than limited companies. Clause 160 replicates this provision for the bank administration procedure. I should add that Clauses 129 and 160 do not apply to Scottish partnerships, which have a different legal structure from English and Welsh partnerships and are provided for separately under Clauses 130 and 161. These provisions mirror Section 420 of the Insolvency Act 1986, which allow the Lord Chancellor, with the concurrence of the Secretary of State or the Lord Chief Justice, to make orders in relation to the law dealing with insolvent partnerships. Indeed, Clauses 129(2) and 160(2) make it clear that the procedure to be followed in relation to any order is the same as that set out in Section 420 of the 1986 Act. I was rather hoping that if any questions were asked in connection with the Insolvency Act 1986 I would be helped by the noble Lord, Lord James of Blackheath, who I acknowledged yesterday is almost certainly the world’s leading expert on that particular legislation, but I see that he is not in his place, so I will soldier on. The primary reason for such an approach is that partnerships have different characteristics from limited companies and their own unique insolvency provisions. It may therefore be necessary to amend provisions of the bank insolvency procedure or the bank administration procedure for any banks that are set up as partnerships rather than as companies. In addition, setting out legislation for banks that are insolvent partnerships in a separate order will provide greater transparency for users of the legislation. As these clauses simply replicate the provisions of existing insolvency law in making legislation to deal with insolvent partnerships, Clauses 129 and 160 should stand part of the Bill. I should like to have the opportunity of writing to the noble Baroness in answer to her question on limited liability partnerships.