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Banking Bill

My Lords, the purpose of Clause 254 is to provide the Government with the power to specify assistance that should or should not be included in the definition of financial assistance for the various purposes for which it is used in the Bill. The clause is therefore of considerable significance because it provides what is essentially a reserve power to give clarity and certainty about the definition, if that is required. The power may well need to be exercised at short notice, because there may be an urgent need to make provision on whether something should constitute financial assistance for the purposes of the Bill. For example, should a bank need financial assistance on an urgent basis, it may want to know as quickly as possible how that financial assistance will be treated under this Bill. For example, will the financial assistance be disregarded by the FSA in determining whether the general conditions for the special resolution regime are satisfied under Clause 7? If it is appropriate to make provision under Clause 254 on how financial assistance is to be treated under the Bill, it may well be appropriate, for legal and market certainty, to make that provision quickly. The noble Baroness’s amendment would make the exercise of the power subject to the draft affirmative procedure rather than the negative procedure. I recognise that of course there ought to be parliamentary scrutiny of important changes to the definition of financial assistance, but I am not at all convinced that the affirmative procedure is either necessary or appropriate. The power may need to be used urgently. Of course, there are limitations on the affirmative procedure in those terms. The Delegated Powers and Regulatory Reform Committee did not think that it ought to recommend the affirmative procedure for this power. The committee made no recommendation about procedure, but had it been anxious about it we all know that it would have agreed with the noble Baroness that the affirmative procedure should be used. The fact that the committee does not agree indicates that, as far as that important body is concerned, the Government may well have got this position right. I recognise the anxieties of the noble Baroness on this matter, but we do not think that the power is too broad. The clause does not allow the Treasury to alter the basic meaning of the expression ““financial assistance””, and the power does not allow the Treasury to make something that is obviously not financial assistance into financial assistance. It merely helps in two broad purposes of assisting with definition. As I indicated, because in certain circumstances there may be the necessity for urgency with regard to this, I do not think that the affirmative resolution is the appropriate procedure. I hope that the noble Baroness will think that the Government’s defence of the arrangements in Clause 254 is sufficient for her to withdraw her amendment.