Banking Bill — Committee (4th Day)

Part of the debate – in the House of Lords at 5:30 pm on 20th January 2009.

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Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords) 5:30 pm, 20th January 2009

With pleasure, I agree with the noble Lord. It is important to link the use of this power with the Bill's objectives. However, I do not take the view that a change of drafting along the lines suggested by his amendment is required. First, in using or considering the use of stabilisation powers, it is of course necessary for the authorities to have regard to the special resolution objectives, so the stabilisation powers are already targeted on achieving outcomes which best meet the special resolution objectives considered in the round.

Secondly, the clause already requires the Treasury to have regard to the special resolution objectives when making an order under this provision. But the making of the order in isolation is unlikely to achieve special resolution objectives, as it is a power ancillary to the powers of the special resolution regime. It is the powers of that regime which are used to achieve its objectives and this power, which we are discussing here, makes changes to make the use of those powers more effective.

The Government consider that the existing provision best reflects the underlying importance of the objectives in this context, but reconciles that with the supporting role which this clause plays to the main powers of the regime. I hope that the noble Lord appreciates that we are thinking along similar lines as regards the importance of linking with the objectives of the special resolution regime, but that is already in the Bill. Therefore, I hope he will feel that he can safely withdraw his amendment.