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Banking Bill

I am grateful to the noble Lord for the points he makes on Clause 171. The clause would facilitate the speedy payment of compensation to depositors or facilitate the speedy transfer of their accounts to another bank under the bank insolvency procedure in Part 2 of the Bill. I am sure the noble Lord shares with the Government the objective of speedy restitution, particularly to certain categories of depositors. Obviously, large volumes will take longer, but the whole point of the clause is to respond as speedily as possible to the needs of depositors. I agree with him in that broad concern. Another of the noble Lord’s concerns is about temporary high balances. I agree with him that that is an important point. Experience over the past few months has ensured that the vast majority of those with resources know the nature of existing guarantees, and that to benefit from the guarantees on £50,000 they must put any greater amounts with different institutions. I appreciate the point the noble Lord makes, that because of the nature of a transaction—particularly the selling of a house—people can have a temporary high balance. I emphasise that we are consulting on this, which is rightly a matter for the Financial Services Authority. I cannot comment on the position at present, except to say that the FSA is all too well aware of exactly the point that the noble Lord has made. It has been made in many different quarters and made in another place with some force as well. He is knocking at an open door if he is seeking to bring this debate to the attention of the authorities. At this stage I do not have an immediate resolution of the point but I accept the representation. On the European economic area branches, the Government are bound by the European directive, so the noble Lord is right that if we want to see things change we have to stiffen up the directive, which is subject to review at present. I bring to the attention of the House the obvious point that present problems with the banks are much wider than the United Kingdom. We often mention the United States at this point, but we should not underestimate the problems in Europe as well. The Government are concerned about cross-border payment. We have lobbied for a single point of contact. We accept entirely the noble Lord’s anxiety that talking about passport arrangements is not enough as far as the new position is concerned. He has recommended that topping up should be made compulsory. I cannot promise that immediately. However, he makes two important points which we intend to address in consultation with regard to giving effect to them as rapidly as we can achieve.