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Banking Bill (Money)

I have a few questions to ask the Minister on this group of Lords amendments. As he has said, Lords amendment 72 provides that the Bank of England must give notice to the Treasury before making a direction and that the Treasury may confer immunity from liability. I would be grateful if he would elaborate on the relationship between the Bank of England and the Treasury in those circumstances. It would appear that the Bank takes the lead and that this is merely a notification requirement. What would happen if the Treasury objected to a course of action taken by the Bank? What would happen if it objected to a direction that the Bank gives under clause 188? Lords amendment 72 states that the"““Treasury may by order confer immunity from liability…in respect of action or inaction in accordance with a direction.””" Clearly, a degree of discretion is involved in the use of the word ““may””. During the Bill's progress we have had many discussions on using the term ““may”” as opposed to ““shall”” or ““will””. Could the Minister give an indication as to the factors the Treasury would take into account when deciding whether or not to confer immunity from liability in damages? Lords amendment 73 relates to the statement of principles to be applied in determining penalties, which, again, is to be sent to the Treasury. Could the Minister elaborate on the relationship between the Treasury and the Bank of England in this context? Will the Treasury have a formal role in giving its views on these principles? Will it be able to recommend or indeed require that the Bank of England changes these principles? Lords amendment 74 states that"““Banknote regulations must establish a method for determining the maximum amount of a penalty.””" I merely note that there seem to be two separate regimes in parts 5 and 6. The one in part 5, which deals with the inter-bank payment systems, provides for a statement of principles with regard to penalties to be produced by the Bank of England, whereas the one in part 6 provides for banknote regulations to specify the maximum penalty. Will the Minister explain why it is appropriate to have two separate regimes, given that we are addressing both those issues in the same Bill, at the same time and in the same group of amendments? There may be good reasons for the slightly different approach being taken, but it might be helpful for the House to hear them. These Lords amendments attempt to address some of the concerns that we raised in Committee, and that is welcome. We are grateful to the Government for, again, listening to some of our concerns.