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Banking Bill

My Lords, the amendment is to ensure that in the event of the powers of the special resolution regime being used, a bank which comes under the regime will not take unfair advantage over the competition. When this matter was debated in Committee, we did not have the benefit of the arguments in favour of ensuring continued competition in the banking sector which were put so ably by the noble Lord, Lord Whitty, in support of his amendment. Although Members of the Committee were not so sure about remedies suggested by the noble Lord, there was strong agreement with the thrust of his argument that competition is essential to ensure that there is no disadvantage to consumers from creating overpowerful institutions. If Her Majesty’s Government are forced to use the proposed legislation, there is clearly a danger that the number of banks will be reduced and that another superpowerful bank may be created. Together these could have a severe effect on competition, so it is only right that there should be a requirement to avoid distorting competition. The Minister pointed out that not only was he a supporter of strong competition between banks, but that the Office of Fair Trading had responsibilities under Parts 4 and 6 of the Enterprise Act 2002. However, as the noble Lord, Lord Borrie, pointed out, in the case of HBOS and Lloyds Bank the Government overrode the express view of the Office of Fair Trading, so there must be some doubt about the effectiveness of that organisation in these circumstances. Another reason is that Clause 75 allows laws to be amended by order, except for those in this Bill, so the Enterprise Act could easily be overridden. If the Minister really is keen on maintaining a competitive, if oligopolistic—a splendid word used by the noble Lord, Lord Whitty—banking sector, I am sure he will accept this amendment and include in the Bill a requirement to avoid the distortion of competition. I beg to move.