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Banking Bill

My Lords, when the noble Lord, Lord Turnbull, and I reflected on the somewhat unsatisfactory debates on the new financial stability objective and the Financial Stability Committee, we broadly decided that, while we did not much like the Government’s proposals, we would go for a minimalist solution of at least recognising that the Bank’s objective was one that could be delivered only in conjunction with the other tripartite actors. The Government have reached a similar minimalist conclusion and tabled Amendment 86, which is in a similar form. I prefer the formulation that the noble Lord, Lord Turnbull, and I came up with, which uses the words ““in co-operation with””, rather than the words, "““shall aim to work with””," in the Minister’s amendment. However, I shall listen with care to what the Minister has to say about his amendment before deciding what to do with mine. The amendments in this group, while useful, do not go to the heart of the concerns that we raised about the new arrangements within the Bank of England. I shall not argue them in detail, because many will emerge from the next group of amendments in the name of the noble Lord, Lord Eatwell. To summarise, there are issues about the Financial Stability Committee not having the right internal or external people on it and there are issues about it ignoring the FSA. It is working to an objective about which there may be a lack of clarity. There may be a need to appoint members to court to fill the Financial Stability Committee, thus unbalancing court. The terms of reference of the committee are a ragbag of overlapping functions and there is no transparency about the committee’s working. I know that the Governor of the Bank of England wants no change to the proposals in the Bill. The Government did not need to put him up to writing formally to the Minister to reinforce that, as it was already well known. I do not believe that the arrangements will work well in practice and I predict that we may well need another bit of legislation to unwind some of this 2009 experiment. However, as the Government have at least accepted the thrust of Amendment 85, we are prepared to listen to their version. I beg to move.