---

Banking Bill

Amendment 204 places a requirement on the Treasury to arrange an independent review of the workings of the Act three years after Royal Assent. When we reach the amendment about the review of the Act, we always know that we are on the final lap. We have discussed what reporting requirements are or are not in this Bill at several points in Committee. Our call has generally been for more transparency and our calls have generally fallen on stony ground. Perhaps I may remind the Committee that there are several types of concern about how this Bill will operate in practice. First, there are some very sweeping powers allowing the tripartite authorities to act when they believe that financial stability is at risk. If those powers are used—we probably all hope that they will not have to be used—it is right that how they have been used will be examined, together with the outcomes, whether they are positive or negative. Secondly, there are concerns about the impact of some of these provisions in terms of how they will affect the financial services sector in the UK. The partial transfer provisions and their impact on legal certainty have stirred up much unhappiness. If either or both of the terms of Clause 48 or the provisions of the related statutory instrument are not satisfactory, there could be adverse arrangements on netting, set-off and similar arrangements. We know that the Government do not want that to happen but there is not yet agreement on all sides about the way forward. The BBA, for example, is keen for a review of this area after the Act has been passed. Thirdly, the Government are keen on the breathtaking powers in Clause 75 to rewrite other legislation even on a retrospective basis and with virtually no parliamentary scrutiny. In other places, the Bill will be practicable only if significant secondary legislation is passed. There are other very wide powers and how those powers will be used is largely an open question. My amendment is loosely based on the provisions of Section 14 of the Financial Services and Markets Act, which allows the Treasury to set up an independent review of the FSA’s value for money. I am sure that value for money was one of the prime concerns when that Act was going through. That is not the issue for this Act. Our concerns are much more about the impact of the Act on the financial services sector and whether it has been effective. I have suggested having a review after three years. There is never a right time, but three years should be enough time to reveal the kind of consequences that might arise, for example, if legal certainty on netting and set-off were not achieved. The major secondary legislation should have been made. My amendment requires a review by an independent person. I think that there is justifiable scepticism about internal reviews. The position of the Treasury within the tripartite authorities means that it is parti pris for this purpose. A credible independent review will inform the Government and Parliament about the quality of the provisions in the Bill and whether it remains fit for purpose. It will also contribute to the wider public confidence in financial services. Because of that, I am confident that the Minister will welcome my amendment. I beg to move.