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Banking Bill (Money)

The Government brought forward Lords amendments 17 and 31 in direct response to amendments proposed in Committee in the other place by Baroness Noakes. Her amendments proposed that when a share or property transfer instrument is made by the Bank of England, the Treasury should lay it before Parliament. The Government reflected carefully on that, and the additions to clauses 24 and 41 are the result of that reflection. Under the amendments, if the Bank of England makes a share or property transfer instrument, the Treasury would be required to lay a copy of it before Parliament, thereby allowing Parliament direct access to the instrument. The amendments respond directly to concerns raised by the Opposition, and they reflect our constructive response to the recommendation of the Delegated Powers and Regulatory Reform Committee that the House should reflect on the degree to which the instruments are subject to parliamentary accountability. Hon. Members, especially those who were members of the Public Bill Committee, may recall that misgivings were expressed in this House about the term ““subserviate””, and those misgivings were shared by Members in another place. The Government therefore brought forward an amendment to replace the term ““subserviate”” with a new subsection to clause 58. I have no problem with the word. Technically, one could say that the Prime Minister subserviated me to the Chancellor of the Exchequer and the Secretary of State for Business, Enterprise and Regulatory Reform. It is clear what we mean by the term. However, for the avoidance of doubt, and to reflect concerns raised in the Commons and the other place during the Bill's passage, Lords amendment 48 states in plain language our intention, which is that the management should have a duty to manage a bridge bank, or bank in temporary public ownership, in a manner that maximises the proceeds available in a bank resolution fund only so far as the duty is compatible with the special resolution objectives and the code of practice. I hope that the amendments satisfy both Houses' concerns on that point; again, the amendments demonstrate our willingness to respond helpfully on such matters, even though in this case we are talking about a linguistic change, rather than a detailed policy change. Government amendment 58 requires the Treasury every year to lay before Parliament a report on the activities of any bank in temporary public ownership. That is a direct response to concerns, expressed here and in anther place, that there were insufficient reporting requirements placed on banks taken into temporary public ownership. There are numerous ways in which the Government are accountable to Parliament for their role with regard to banks in temporary public ownership. Parliament can already request Treasury Ministers to report on the activities of a bank in temporary public ownership whenever it wishes, including, should it so desire, more frequently than once a year. Furthermore, all the usual accounting and reporting requirements under the Companies Act 2006 will apply to banks in temporary public ownership. However, having reflected on the matter, the Government are persuaded that it would be helpful to include an express requirement to produce a report on the activities of a bank in temporary public ownership. That is why I commend Lords amendment 58, and the other amendments in the group, to the House.