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Banking Bill

My Lords, I am not an expert on procedure in your Lordships' House, but my understanding is that the rules governing Report stage are significantly more restrictive than the rules governing Committee stage as regards the extent to which a conversation can take place between Members. If I am wrong, I shall stand corrected; but if I am right, perhaps noble Lords would follow that rule. In Committee I argued in favour of Amendment 57. I could see the argument for including the clause in the Bill due to the Bradford & Bingley precedent, when the Government had to act near the beginning of a very long recess. It seemed to me that the clause, which deals with the secondary consequences of taking a bank into public ownership or one of the other special resolution regimes, should be able to come into force so that the whole deal was done. You would bring the bank into the special resolution regime and, depending on the extent to which you found it necessary, you would make other changes to the law to allow that to happen by, for example, disallowing provisions of the Companies Act, which in certain circumstances you might need to do. It would be sensible to get a statutory instrument out at the same time and to have it in the public domain so that all those involved would know the Government’s intention and the likely outcome. The likelihood of a statutory instrument being voted down by Parliament in those circumstances is very rare indeed. When we do attempt to vote down statutory instruments—since I have been here, we have done so probably two or three times—Ministers tell us that we are behaving in a most irresponsible way and it is the end of the constitution as we know it. For that reason, Parliament is very reluctant to vote down statutory instruments. Therefore, by introducing an instrument under this clause, the very strong implication is that that would be the law. In the narrow circumstances of something happening at the start of a recess or when Parliament is not sitting, it would be useful for all involved in bringing a bank into the special resolution regime to have that degree of certainty. That brings us to paragraphs (c) and (d). I have no doubt that the Minister will confirm this, but I thought on rereading paragraph (c) that we need it because if you have undertaken a whole raft of provisions under the power, you could not turn the clock back just in respect of the secondary provisions, as opposed to the major provision: that of bringing the bank under the special resolution regime. I persuaded myself—I hope correctly—that paragraph (c) was necessary. As for paragraph (d), however, in Committee several noble Lords were appalled at the thought that if Parliament slung it out, the Government could bring it back and back and back. Therefore, I propose that we should just amend paragraph (d) because if Parliament has allowed an order to lapse—which really means that Parliament has voted against it—it is highly unlikely that Parliament would want another order to come forward. The Government's response has been to produce their amendment to deal with the point that they cannot just bring the same order back and back and back by inserting in paragraph (d) the words ““in new terms””. That goes some way to improve the position in that it would mean that the Government could not just bring back the same order. I am unclear about two things, the first of which is what ““new terms”” means. Does that mean that they could just change the odd word? How substantive is the phrase ““new terms””? Secondly, in the highly unlikely event of Parliament voting down an order, why would the Government feel confident enough to bring forward any other order under the clause? I am pleased that the Government have moved a bit, but I am still rather curious about the consequences of where they have moved.