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Banking Bill

My Lords, on Report, the Government agreed to take a number of issues away for Third Reading. This was in part a consequence of the very limited time between the completion of Committee and Report, which did not allow the issues outstanding at the completion of Committee fully to be resolved. We were grateful for the Government agreeing to take issues away and to the usual channels for allowing these issues to be debated again today. Report concluded on the evening of Tuesday last week, and we had to table our amendments for the outstanding issues ahead of final discussions with the Government and before sight of their own amendments. This means some inevitable duplication between our own amendments and the Government’s, but I hope that it does not inconvenience the House. Amendment 1 is one such amendment. The Government have tabled Amendment 2 in this group. An issue that I have raised throughout our consideration of this Bill is that the need to achieve continuity of banking services is absent from the objectives of the special resolution regime. This concern has been expressed largely by the British Bankers’ Association, but it is supported by consumer groups. Modern life is dependent on continuity of banking services; it is as simple as that. My Amendment 1 is to objective 3 of the special resolution regime, which is set out in Clause 4(6). Objective 3 is about the protection of depositors, which clearly overlaps with the issue of banking services. There is a link here to the separate proposals being pursued by the Financial Services Authority, which are aimed at speeding up payments to depositors via the Financial Services Compensation Scheme in the event of bank failure. However, the BBA believes that unnecessary costs may be imposed by the FSA if insufficient attention is paid to the alternative, and more satisfactory, outcome of continuity of banking services. To this extent, therefore, I am pleased that the Government have, with their Amendment 2, accepted the principle of placing the continuity of banking services in the Bill. I will, of course, let the Minister speak to his own amendment in a moment. While we understand the link between the Government’s amendment and objective 1, namely the stability of financial systems, we remain concerned that the FSA will take insufficient account of the continuity of banking services when it pursues changes to the FSCS aimed at depositors alone. I hope that the Minister will be able to reassure the House that the FSA will be mindful of the banking continuity requirement, which, as a result of the Government’s amendment, will now be an explicit part of the special resolution regime. I look forward to hearing the Minister’s comments. In the mean time, I beg to move.