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Banking Bill

My Lords, I, too, am most grateful to my noble friend for giving of his time last Thursday to discuss our concerns. We appreciate his patience, and—I repeat what the noble Lord, Lord Goodlad, said—his characteristic courtesy. Retrospective legislation is undoubtedly needed in this context. To envisage the extent and nature of all the facts that it might be necessary to cater for in a fast-moving situation demands retrospective legislation, much as I object to it generally. We have to prepare ourselves for such cases and be able to deal with that fast-moving situation. The Minister may think it is extraneous, but there is a great deal of public concern about what is happening in the banking field. It crosses my mind whether this particular retrospective power might be used for the situation that is causing that concern; namely, the payment of huge bonuses for which the Government seem to say that because there are existing contractual obligations, then nothing can be done about it. I hope that I have misinterpreted what they are saying, but it would appeal to the public if retrospective legislation may have to be used. The Minister may be able to help me on that. I return briefly to the arguments put by the noble Lord, Lord Goodlad, which we adumbrated on Report. We all understand the word ““necessary””. There is a compelling reason for such a matter. ““Desirable”” is a wholly different matter. It may be necessary for me to do something in the course of a working day when it is desirable. Whether I desire it or whether somebody else desires it is another matter. That is the difference between ourselves and the cross-party committee, which has considered this matter in great detail and is concerned about whether the Government have gone a step too far. The Minister was asked, in col. 567 of Hansard of 3 February, to help the House by describing the type of situation that might not be covered by the word ““necessary””. The example he gave—I emphasise that it was the only example that he could give on that day—was where there was a drafting error and, because of confusion or uncertainty, it would be difficult to rely on the word ““necessary”” alone. With respect to my noble friend, I found that explanation singularly unpersuasive. It is curious if that is the only example that the Government can give. They have had time now to think about the matter and I hope that they will do better. However, I would have thought that the example of a drafting error presented the strongest possible case for the use of the word ““necessary””, because nothing else is required. In our experience of legislation, we have seen drafting errors made, and they have had to be corrected. In my experience, those are usually matters that Parliament is prepared to deal with on the nod, because it is obvious when a word like ““not”” or ““where”” has been left out, and easy to understand that there is no intention to legislate in that form. If that is the best example that can be given, it is the weakest that I have come across. Secondly, I ask the Government to give one example—I know we pressed the Minister very hard and he was extremely patient—of where any Government have thought it necessary to use the belt-and-braces approach of using both words, ““necessary”” and ““desirable””. The Minister had had no warning of this and could not give such an example. He has cohorts of advisers and brought a large number with him to our meeting. There was hardly space in the room to house what seemed like the whole British labour force—certainly there were British jobs for a large number of people on that Thursday afternoon. They have had the weekend to reflect—the great minds of the Treasury, their huge legal resources, parliamentary counsel—and I hope that they have come forward with not one but a whole host of examples of situations where they have had to use ““necessary”” and ““desirable””. That would be a valuable precedent for us to consider in this instance. I believe—unless I am advised to the contrary, and I am prepared to listen—that the Government are breaking new ground. I will emphasise one point. In this difficult, contentious field of relying on retrospective legislation, and introducing legislation to cover retrospection, the Government need very forceful arguments that the word ““desirable”” is necessary. We suggested that, in order to avoid the open-ended nature of ““desirable””—which in my view is a blank cheque—that some other words might be suggested. The words put forward in Amendment 21 are, "““if there are compelling reasons to do so””." They appear to limit the open-ended nature of ““desirable””. They certainly put the onus on the Executive when they seek to rely on this. It is very close to, if not almost the same as, ““necessary””. The Government have listened. I hope that they will come forward with some proposals that meet our concerns about the fact that the word ““desirable””, without some qualification, is not one that I am prepared to accept easily.