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Banking Bill

My Lords, I am grateful to all noble Lords who have spoken, particularly as their speeches were united with the noble Baroness in her intent. I, too, share that intent. The Government follow the position which she is seeking to ensure through her amendment, that the authorities should provide relevant information about their actions following the use of a special resolution tool. This is similar to a provision we have already included in the draft code. I know the noble Baroness does not put as much store by that as I would wish, but we have stated before that the use of the Government’s powers under the Banking (Special Provisions) Act certainly followed the concept of being as open as possible. The Bill already requires the Treasury to lay a transfer order before Parliament. The Bank of England is to publish its transfer instrument in the public domain and, following an amendment brought forward in response to the debate we had in Committee, such transfer instruments are now to be laid before Parliament. Given this and the requirement in the code of practice, I cannot conceive of a situation where the authorities would not publicly disclose information about their activities. I would go so far as to argue that they would not be credible—the noble Viscount, Lord Eccles, touched upon this point—unless there was a public interest consideration related to confidence in the market. There must on occasion be a possibility that full disclosure of how the authorities are acting cannot be followed because of the nature of the case, and we have to make provision in the legislation for that possibility; but we have clearly indicated that we share the intention behind the amendment and the authorities will be obliged to be open in their activities. The amendment is unnecessary. I do not disagree with the intention behind it, and we are trying to be as constructive as we can be within the framework that I have just identified. The fact that transfer instruments made by the Bank of England must now be laid before Parliament is an earnest of that intent. The problem with the amendment is that it would require the authorities to disclose information about the consequences or likely consequences of their actions. The authorities can be expected to do that in the short and, potentially, medium terms with regard to the bank in question. They would be able to give an account of how the action met the special resolution objectives, which is the intention behind the noble Baroness’s amendment. It would, however, be difficult to require the authorities to give a full account of all the likely consequences of their actions. That is surely too open-ended a requirement to place on the authorities while they deal with a situation in which the extent to which they are able to foresee developments will inevitably be limited and they have a relatively short period in which to act. In general the Government support the principles that the amendment seeks to advance, but I have a specific concern about the drafting and about how realistic it is to place this obligation on the authorities. I hear what the noble Baroness says—the indication in the code is not sufficient, in her terms—but that, coupled with the other statutory obligations in the Bill, means that the amendment is not necessary or even entirely appropriate. I hope she will feel that she has pressed us far and that we have responded constructively, and that she will feel able to withdraw the amendment.