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Banking Bill

My Lords, I supported these amendments and the noble Lord, Lord Eatwell, in Committee and I certainly support the principle behind the amendments. Since the Committee stage, we have received a long explanatory note from the Governor of the Bank of England as to why this committee would be completely impossible. I fear that there are real shades of ““Yes Minister”” in it. It says that, "““implementation of the FS strategy … has implications for the Bank’s balance sheet and risk and control environment””," and that it cannot be left, "““to a Committee that is disconnected from the Court of Directors””," to take decisions in that area. Instead, he suggests that it is all fine, that the Bank works happily within the tripartite framework and that he would be happy to have this stated in the Bill. I assume that this is why we have Amendment 86, which we have just debated. Again, this is a wonderfully drafted amendment. It is the absolute minimum that you could conceivably say while saying anything at all. It covers the fact that the Bank will work with the other relevant bodies, including the Treasury and the FSA, but qualifies it, lest it be thought that the Bank should strive too hard to work with them, by saying that it shall ““aim”” to work with them. The truth is that the governor says that they are happily working together anyway, yet the Bill now says that the Bank will try its best to see whether it can work with these bodies. The implication of both the amendment and the document from the governor is that the Bank is extremely grand, and will work with all the people who want to be involved if it has to, but it is the Bank that really matters. The entire thrust of what the noble Lord, Lord Eatwell, has been saying, and which I support, is that the FSA and the Bank have equal roles in maintaining financial stability, given that financial stability depends very much, as we have seen recently, not on some general collective financial situation, but the position in individual significant financial institutions where the FSA, by common consent, is in a much better position than the Bank to know exactly what is going on. Given that the Government clearly will not accept these amendments, I follow the logic of the noble Lord, Lord Eatwell. It would be better not to have all this stuff about one sub-committee of the Bank in the Bill because it gives it an inflated importance and creates a misleading impression of how the tripartite system both is intended to work and will work.