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Banking Bill

My Lords, Amendment 75 amends Clause 227 by placing a two-year sunset provision on the powers in subsection (2). The power in the clause was already very wide when the Government introduced the Bill to the other place in October, but it was intended for financial stability purposes. That was clear from the debates in another place, and that was the basis on which we accepted the power. In Committee in your Lordships’ House, the Government radically changed the scope of the powers in the clause by allowing any Secretary of State, not just the Treasury, to give financial assistance on a very wide basis. That basis is set out in subsection (2). The Minister agreed in Committee that the planned use of this power would go way beyond mere financial stability, public confidence in banking systems and depositor protection. In ordinary times, we would have said that it was inappropriate to include such a power in the Bill; that if Secretaries of State needed legislative cover for their schemes, they should go and get it themselves. However, as I said in Committee, we accepted that these were not ordinary times and we did want to impede the measures that the Government are taking. We did feel, because of the extraordinary nature of the powers, that they should be sunsetted after two years. In Committee, the Minister pointed out that my sunset clause would not have allowed money to be paid out in respect of obligations entered into in the two-year period, and that this would kill off some schemes currently being introduced, which are based largely on guarantees. I had not intended that effect, and my amendment for Report leaves cover for obligations entered into in the two-year period. The idea is that, if there is a continuing need for financial assistance by one of more Secretaries of State at the end of the two-year period, it would be open to that Secretary of State to bring forward his own legislation. Alternatively, in extremis, the Government could bring forward a one-clause Bill to extend the powers in the clause for a further period. Obviously, if circumstances still merited it, I am sure that both Houses would facilitate the passage of such a short Bill. If we allow the Bill to contain this clause without further restraint, we will be giving the Government a power to spend what they like, when they like, for ever and a day. Any power, including a financial power, that is taken in an emergency is customarily sunsetted. I am disappointed that the Government have not yet recognised that. I beg to move.