Ian Pearson (Parliamentary Under-Secretary, Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)

None of the enforcement powers proposed in the Bill should be taken lightly. I am happy to confirm that we anticipate their being used only in unusual and exceptional circumstances. The power to make a closure order is necessary as the ultimate sanction in cases of a compliance failure that is considered so serious that the Bank of England believes that the continued operation of a recognised inter-bank payment system could destabilise the UK financial system. It is entirely appropriate for the Bank to have such a power in such circumstances, because it will have to act decisively to address such threats by closing down all or part of a recognised inter-bank payment system.

I say again that that could happen to a payment system on the wholesale or retail end of spectrum, but it would have to be of systemic or system-wide importance. The combination of this power and the others that we have discussed on publication compliance failures and financial penalties provides a suite of tools that may be applied, depending on the severity of the compliance failure.

The hon. Member for Wellingborough raised an interesting point. It is not likely that the circumstance he described could or would ever arise, but I have in the back of my mind that there are already powers that could deal with it. If I find that that is not the case, I will think about whether anything needs to be done in that area. However, I am pretty confident that the matter is covered.

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