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Banking Bill

My Lords, the purpose of Clause 227 is to give statutory cover for public expenditure in support of various schemes which the Government consider necessary in these extraordinary times. Subsections (1) and (2) are fairly routine parts of the Bill. Clause 227(5) is less ordinary. It allows for direct access to the Consolidated Fund in urgent cases. This subsection is unusual, but it is not unprecedented. First, there are already what are called Consolidated Fund standing services provided for in Acts of Parliament. A Consolidated Fund standing service is a service where the money to finance the service can be taken directly from the Consolidated Fund rather than being voted first in supply estimates. There is also provision in some Acts for direct access to the Consolidated Fund to meet government commitments where estimates provision is not available. A good example is the Export and Investment Guarantees Act 1991. But direct access to the Consolidated Fund for expenditure does not mean that it is not subject to proper control, reporting or accounting. No payment may be made out of the Consolidated Fund without the prior approval of the Comptroller and Auditor-General. The amounts paid out will, suitably aggregated, appear in the annual accounts of the Consolidated Fund. There will be National Audit Office scrutiny and the Treasury will have to answer to the Public Accounts Committee in the normal way. Turning now to Amendments 76 and 78, subsections (6) and (7) of Clause 227 provide for reporting of expenditure to which the special provisions in subsection (5) apply. Your Lordships were concerned about aspects of these provisions and I specifically promised the noble Lords, Lord Higgins and Lord Turnbull, that I would look at the issue of anonymity again. We have done so, but we have come to the conclusion that the provisions of Clause 227(6) need to be retained. I fully appreciate, not least as a Treasury Minister, that it is not ideal for anyone concerned with public finances to be told that one cannot be informed about what happened with public money. The plain fact is that some of the schemes or arrangements could not operate or would never be taken up by institutions concerned if there was any chance that their identity might become known. There may be cases where knowledge of public support could precipitate the kind of crisis we were seeking to prevent. I say to the noble Lord, Lord Turnbull, that I believe that that applies even in cases where, after assistance was received, the amounts were fully repaid. The disclosure of that fact would raise questions about the structure, efficacy, governance, risk controls, and so on, of the recipient institution. There may also be instances where it is essential to keep payments under a guarantee or similar commitment confidential. As well as a need to be able to delay or dispense with a report on grounds of public interest, we must be able to assure participants in some schemes that we can keep confidential their participation and any payments we have made under any guarantees or similar financial commitments entered into for their benefit. The noble Lord, Lord Turnbull, also asked about disclosure in the Bank’s annual report. To the best of my recollection, the Bank's annual report now discloses that no financial assistance has been provided since a certain date. Obviously, that may well change in the Bank’s next annual report. I am speaking here on the basis of my recollection as a member of the Audit Committee of the Court of the Bank of England, but my experience is somewhat out of date, and I was not sitting in court when the last set of annual reports and accounts were approved, because I had taken leave of absence. If I am incorrect in my explanation, I will write to the noble Lord. The noble Lord, Lord Blackwell, asked about the obligations that would fall on the directors of a bank if the bank was a public company under listing regimes. I would rather give him a very precise and correct answer, so rather than anticipate the answer, which I am tempted to do, I prefer to take guidance and will write to the noble Lord and copy my reply to others who have spoken to the amendment. I fully accept the point that he makes: if there were an obligation to disclose under the listing requirement, part of the argument in favour of anonymity here would be undermined for public companies. To close, we have, therefore, to keep the anonymity provisions in Clause 227(6), and I am afraid that the Government cannot accept Amendments 76 and 78 , tabled by the noble Baroness, Lady Noakes. I hope that in the light of that explanation she will feel able to withdraw the amendment.