Clause 156
Banking Bill
1:00 pm
Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)
As a veteran of your chairmanship, Mr. Gale, I know exactly where the limits are drawn on those matters, and I will seek to confine my remarks on the amendments precisely to how the regulations are made.
As the Minister alluded to earlier, the broad framework for the FSCS is set out in the 2000 Act. In that Act, the FSA has responsibility for drawing up the detailed regulations. Section 213 clearly states:
“The Authority must by rules establish a scheme for compensating persons in cases where relevant persons are unable, or are likely to be unable, to satisfy claims against them.”
The responsibility to draw up the detailed rules therefore rests with the authority. Clause 156 of the Bill states that the Treasury will make regulations, not that the authority will make rules. Amendment No. 34 and the first part of amendment No. 35—I will not address the second part now as it pertains more to the next group of amendments—are designed to reassert the role of the FSA in making those detailed rules. Once the principle of contingent funding has been introduced by the Bill, and once the provision for that funding has been triggered, it is down to the FSA to make the rules and not to the Treasury to set out detailed regulations about how that funding may work in practice. This is therefore a straightforward pair of amendments.