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Banking Bill

As she is fond of doing, the noble Baroness began with a sporting metaphor. Earlier she provoked my noble friend to produce a tip for a horse that was running today which came second at 40-1. That shows the virtues of these debates provided people act upon what the Government says. I objected to her sporting metaphor because it is all right the noble Baroness saying that she is glad that we have reached the last lap, but the last lap of a marathon is 385 yards and there are 26 miles before it. I feel today that we have been through that experience and I hope the last 385 yards will not take too long. On the key points of the proposals in Amendment 204, mechanisms are in place to ensure that the arrangements can be reviewed and refined as we go forward. Most notably, the banking liaison panel will have an important role in advising the Treasury in due course on what changes are needed to legislation. The panel’s remit allows it to give advice on the secondary legislation made under Parts 1 to 3 of the Bill and it will be able to keep under review aspects of the special resolution regime, which is a very important part of the Bill, including the partial transfer safeguards and the detail of the operation of the new insolvency procedures established under Parts 2 and 3 of the Bill. An ongoing process of review is surely far more appropriate than a one-off review. The tripartite authorities are bound to be fully accountable to the public, the courts and, where appropriate, to Parliament for their actions. Therefore, each time the special resolution regime tools are used there will be a process of consideration and review. This said, I agree with the principle adumbrated by the noble Baroness in her proposed new clause. While we have mechanisms in place to review elements of the scheme, good governance and our better regulation principles demand that the legislation as a whole is reviewed at an appropriate time. It is therefore, of course, our intention to return to these arrangements and ensure that all elements of the scheme are appropriately covered by a review. I commit the Government to this position and I hope the noble Baroness will feel that that commitment is an earnest of our intent and meets the broad position put forward in her amendment. The noble Lord, Lord Newby, said that he had produced a nuclear weapon. It leaves the noble Baroness’s approach looking relatively mild if I have to tackle the nuclear weapon of a sunset clause. As I recall from past occasions when tests used to take place at various atolls, the atomic bomb produces a rare form of sunset. The noble Lord will appreciate that we have, as I have just indicated, appropriate mechanisms in place to ensure that the arrangements can be regularly reviewed and refined. I, therefore, hope that he considers that the sunset clause is not necessary. We have had a fairly substantial debate on this on two occasions, thanks to the initiative of the noble Lord, Lord Saatchi, on the necessity for a fundamental approach to these issues. He may not altogether agree with the Bill, but he has taken the trouble to contribute this evening because, as he will concede, the Bill has a long-term perspective on banking legislation. It is meant to set the basis for effective control of the banking system against the background of the difficulties of the past 18 months or more. We are not out of difficulty yet and, therefore, this is substantial legislation with a long-term perspective. We had a limited time on the Banking (Special Provisions) Act, which lasted for a year. We all recognised then that we were acting in emergency circumstances relating to localised difficulties rather than the total position. This Bill is not about a partial, small-time solution: it is a fundamental reform of banking and the structure that we need for the future. I hope that the noble Lord, Lord Newby, will accept that a sunset clause, albeit slightly longer than one year, is more appropriate for legislation that has a shorter perspective than this Bill. Therefore, I hope that he will see that the processes that we have in place for review, answerability and accountability, which run right through the Bill, are an assurance and that he does not need to press his amendment. I hope that the noble Baroness recognises that I have accepted her principles and have interpreted them in a marginally different way, so that she is able to withdraw her amendment.