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Banking Bill

My Lords, this amendment deals with the question of who is in charge, which has hovered over the tripartite authorities since late summer 2007. My party has been asking that question since the Northern Rock affair and it was also picked up by the chairman of the Treasury Select Committee in another place. The question has never been answered. We debated this in Committee in conjunction with a further amendment which also sought to require the ongoing co-operative tripartite working that we have been told is the underlying modus operandi of the tripartite arrangements. Many of us have concerns about the tripartite arrangements because the stresses and strains within them were evident for all to see in summer 2007. In Committee on 13 January, the Minister told us that from his experience, "““it works a lot better than many would suggest””.—[Official Report, 13/1/09; col. 1132.]" That is not quite as ringing an endorsement of the tripartite authorities as we, or indeed they, might have hoped for. Indeed, there is evidence in the Bill—notably in the way that the Bank of England expects to work via its new Financial Stability Committee—that joint working will not be the norm. Instead, we have a picture of the tripartite authorities working in silos with occasional interaction between them rather than the reverse. At the end of the day, the tripartite arrangements will be judged by their outcomes. If they do not work well and the Government pass up opportunities in the Bill to make them work better, the Government will take the blame. Amendment 2 is not an optional extra, because it goes to the heart of accountability. As my noble and learned friend Lord Mackay of Clashfern said in Committee: "““I would have thought it a necessary condition of an effective organisation that the buck should stop somewhere. It is therefore important that somebody—some group or institution—should have responsibility for the ultimate decision””.—[Official Report, 13/1/09; col. 1131.]" My noble and learned friend then referred to the FSA's decision under Clause 7. It is clearly the FSA's decision, but it cannot be reached without consulting the Treasury and the Bank of England, and the question must arise: what happens if there is a dispute between the parties? If we faced another Northern Rock case, where there clearly were differences of opinion within the tripartite authorities, we would need to be clear where ultimate responsibility and accountability lie. It is not enough to say that each party will be accountable for its own decisions, because not every decision will have been documented in the Bill or allocated to one party. Nor is it enough to say that there is collective accountability, because that is simply another way of saying that accountability is diluted and weak. I concede that there was a difference of opinion in Committee about who should have the final say. Some favoured the Bank of England. The noble Lord, Lord Newby, conceded that, as a matter of practicality, the Treasury calls the tune, as he put it. However, he most definitely did not want to name the Treasury in case it got above itself. My brief spell in the Treasury many years ago did not leave me with quite that kind of antipathy towards it, although I am not uncritical of it. At the end of the day, we are talking more about the responsibility and accountability of Ministers, not the hardworking and able civil servants in the Treasury. The Treasury Minister, the Chancellor and the First Lord got away scot free in respect of ultimate responsibility for their role in Northern Rock. That is why we must not let that happen again and why I have tabled my amendment again for Report. I beg to move.