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Banking Bill

The Minister said the cardinal principle was that there should be contribution by the industry. Of course, that has underpinned the Financial Services Compensation Scheme from the outset. He went on to say that it has to be equitable by those which fail. The proportion that those that fail will contribute will be very much at the margins of the burden on the whole industry. So the Minister constructs a little principle of fairness for the institutions that fail to be set against the inequity of those banks which continue having to fund 1 per cent or 2 per cent of the deposit base—or possibly even more because no details are available—against a possibility, which may be remote, of a major payout. The Minister says that Parliament can debate an affirmative order. He perhaps is not very familiar with the procedures of both Houses. In the other House, a statutory instrument would be programmed into a Committee, which would not be taken on the Floor of the House. There would be a time limit—perhaps an hour and a half—to debate it and it would not be amendable. In your Lordships' House, we would not be time-limited, but it would still not be amendable. We would have only the option of completely rejecting the statutory instrument. A statutory instrument is not an appropriate vehicle for proper parliamentary scrutiny. Since neither the full justification, nor the timing, nor the quantum, nor the impact of the exercise of this power is before Parliament at the moment, we have a seriously deficient proposal in this Bill. Amendment 160 accepts the principle of the Government proceeding in that way. It is a perfectly reasonable approach of requiring the Treasury to make a report to Parliament. Perhaps the report should have covered more things—the Minister said that it was a narrow report—but at least it would allow parliamentary debate to take place outside the confines of the rules of either House in dealing with statutory instruments. I do not think that the Government are taking this issue seriously and I beg leave to test the opinion of the Committee. Division on Amendment 160. Contents 80; Not-Contents 174. Amendment 160 disagreed. Clause 167 agreed.