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Banking Bill

In moving Amendment 158B, I shall speak also to Amendments 158C, 158D and 162B. The first three of these amendments amend Clause 167 and the last amends Clause 170. These arrangements ensure that the contingency funding arrangements for the Financial Services Compensation Scheme are confined to banks and building societies. As the Minister has just said in response to the previous amendment, the compensation scheme covers many other kinds of financial service provider. Those which are not banks and buildings societies are extremely concerned to ensure that they do not get called on to pay compensation in respect of failed banks and building societies. They are extremely concerned about having to pick up part of the tab from the current slew of compensation being processed through the Financial Services Compensation Scheme. They are doubly concerned at the possibility that they might have to pay in advance of any compensation payments in order to the allow the FSCS to build up a contingency fund. This is a position of basic equity as between different financial products and service providers. The costs of the Financial Services Compensation Scheme are inevitably borne, ultimately, by customers, but they might initially be paid for by service providers. What is the justification for requiring the customers of, say, insurance or investment management products to bear the costs of bank failure? It goes without saying that the ABI and the IMA have concerns with this, as do other groups of financial service provider which are within the net of the Financial Services Compensation Scheme. I beg to move.