Clause 179
Banking Bill
4:30 pm
Stewart Hosie (Spokesperson (Economy; Home Affairs; Treasury; Women); Dundee East, Scottish National Party)
As I was saying before lunch, the clause is similar in form to a clause we considered on another Bill. That clause gave Her Majesty’s Revenue and Customs officials the right to access and seize documents. I argued that if a document was an electronic document hosted on an overseas computer, it would be wholly unreasonable to expect that the person being asked to provide it could necessarily do so. Such legislation, because it could be seen as extraterritorial, might be unenforceable. The same argument applies in this case.
The clause states that the Bank of England may appoint someone to inspect an inter-bank payment system and that the operator of that system must
“grant an inspector access, on request and at any reasonable time, to premises on or from which any part of the system is operated”.
Clearly, if the data centre is overseas, that might be impossible and legally unenforceable. However, although the extraterritorial argument is a real one that needs to be addressed, the issue of the operator is more important in terms of the Bill. The operator may be a fairly junior member of staff in a bank, certainly not a senior figure, who may not have access or be able to arrange it.
If an overseas data centre forms part of the system that is to be inspected, it would make more sense for the legislation to suggest that failure would be only if all reasonable efforts to gain access or to allow the inspector access were not made, rather than the pretty blunt description in the clause that the operator of a recognised inter-bank payment system must grant an inspector access even when the centre may be overseas or he or she simply cannot organise that access. I should like to hear what the Minister has to say about that. I would not like to see a piece of legislation that could land someone in court, or subject them to an inspection warrant, for something that they physically cannot do, or do not have the status to do. Would not the phrase “make all reasonable efforts” be better than the wording in the clause? I will listen to what the Minister has to say before we look at other amendments to this part of the Bill.