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Banking Bill

My Lords, I shall speak also to Amendments 41 and 42. These are amendments to Clause 57, which deals with valuation principles. We find this approach to valuation odd. The Treasury is at pains to appoint an independent valuer, or so it tells us—the Minister has repeated that again. But, having appointed him, it then wants to use Clause 57 to tell him exactly how he should carry out his valuation. Clause 57 allows the Treasury to set out various things that it could tell the valuer to do. We have no problem with subsection (3), which mandates the disregard of financial assistance provided by the Treasury or the Bank of England; that is entirely proper in order to protect public money. But subsection (2) allows the Treasury to mandate all sorts of valuation methods, thus begging the question about why an independent valuer has been appointed in the first place if he has to be told in detail how to ply his trade. Subsection (4) allows the Treasury to tell the valuer to make assumptions which might not in fact be true. The Minister gave no specific rationale for this other than the need to protect the public purse. We have to remember that the special resolution regime can be triggered without any actual public money having been committed. It is not a prerequisite of the regime that such a condition is fulfilled. In any event, we believe that it is bad government for the public purse to be protected by the use of valuation principles that are counterfactual or not in accordance with the judgment of an independent valuer. The Minister said that the clause was ECHR-compliant. The Government always say that about their Bills, of course, and sign a declaration to that effect. But he cannot mean that any application of the sweeping powers in this clause would be ECHR-proof. It is highly doubtful that, say, the specification of a counterfactual under subsection (4) would survive a legal challenge. My amendment seeks to change Clause 57 so that the valuer has to have regard to the principles that could be set out in a compensation scheme order but does not necessarily have to apply them and can still have recourse to his own judgment. In subsections (2) and (4), instead of the valuer having to follow the principles, the amendment requires him to consider whether it is desirable to follow them. I believe that this is a more realistic and, indeed, reasonable approach. I beg to move.