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Banking Bill

My Lords, I shall speak also to Amendments 44 and 46. The amendments seek to amend subsection (6) of Clause 58, which deals with resolution funds that may be set up to pay any balance of funds after a bridge bank operation or temporary public ownership. I have tabled my amendments to subsection (6) but in haste omitted to table mirror amendments to subsection (7), but the issues are relevant to both subsections. The amendments would introduce the concept of maximisation of proceeds, but the resolution fund order is permissive. It is not necessary that the Bank of England or the Treasury must maximise the proceeds, which means that they may not be required to have the residual interests of the shareholders in mind at all, except by reference to human rights issues. Amendments 43 and 44 would make this requirement to maximise proceeds mandatory. It should be noted that the operation of paragraph (a) of the subsection means that the special resolution objectives and the code of practice will always trump proceeds maximisation, and so there can be no argument that the need, say, to protect depositors cannot come before proceeds maximisation, which will always come later in the order of consideration. In that light, I challenged the Minister in Committee to say in what other circumstances a resolution fund might not have the requirement to maximise proceeds, but the Minister did not give me an answer. Amendment 46 would delete paragraph (b) of subsection (6). This is an oddity, because it requires an order to specify the extent of maximisation of proceeds. I do not understand how one can partially maximise anything as a matter of logic. I did not get an answer to that in Committee, either. The Minister said that he would reflect on this prior to Report but his amendments in this group do not appear to deal with the points raised by my amendments. Instead, they deal with other amendments to which I spoke in Committee and get rid of the ridiculous word ““subserviate””. The Minister’s officials asked to group his amendments with mine, to which I agreed, but I have no idea why, as they appear to address a completely different issue. I hope that when the Minister speaks to his amendments he will also manage to address mine. I beg to move.