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Banking Bill

My Lords, I thank the noble Baroness, Lady Noakes, for her amendment. Noble Lords will be aware that the Government have tabled an amendment of their own on this subject and that there is now little, if any, difference between us. I am grateful to the noble Baroness for the strength with which she has urged the case for continuity, and I am pleased that we have been able to accept the validity of her arguments and incorporate them into our amendment. As the noble Baroness said, the issue here relates to continuity of banking services. I spoke at length on this matter both in Committee and on Report. Noble Lords will be relieved to hear that I do not wish to return to these arguments in full, but I will summarise the Government’s opinion on these points. The Bill already includes, at its heart, provisions aimed at ensuring continuity of services. The very purpose of the stabilisation tools of the special resolution regime is to ensure that banks do not fail completely, thereby maintaining full continuity of banking services. This is reflected both in the objectives set out in Clause 4 and the draft code of practice, which explains them. That said, the Government are, as always, prepared to listen to the views of the House and to respond as constructively as possible. We have therefore tabled an amendment that meets the concerns expressed on Report. This amendment makes it expressly clear that the special resolution objective includes the concept of continuity of banking services. Noble Lords will note that this is included as part of objective 1, to protect and enhance the stability of the financial systems in the UK. As I have said, the continuity of banking systems is implied in different ways in each of the first three objectives. Therefore, in making explicit provision for the continuity of banking services, we have done so under the broadest of them. To be absolutely clear, this drafting is entirely consistent with the fact that this concept also relates to the objectives of protecting and enhancing confidence in the banking systems, and of protecting depositors. I also make it clear that continuity of banking services is not the only element to be considered under objective 1. The amendment does not, therefore, limit the scope of that objective in any way. However, the amendment now makes it explicit in the Bill that this concept is at least one of the elements that needs to be considered. I hope this demonstrates, once again, the Government’s commitment to listening to the views of the House and responding constructively. I will therefore, most respectfully and—to take the names of two horses in the 5 o’clock at Kempton this afternoon—in a way that is both Faintly Hopeful and with a Straight Face, ask the noble Baroness to withdraw her amendment. If she will do so, I will move the government amendment which I have just described. The noble Baroness asked me one question relating to the FSA. The authorities must have regard to all the objectives. This includes objective 1, which now references continuity of service and objective 3 on protection of depositors. I believe that the introduction of the continuity of service is something that the FSA will need to take into careful consideration in framing all its policy responses to the Bill. Therefore, I hope that my answer provides the comfort that the noble Baroness sought in her question.