Banking Bill — Committee (4th Day)

Part of the debate – in the House of Lords at 6:45 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) 6:45 pm, 20th January 2009

I was about to respond to the point on which the noble Lord, Lord Forsyth, commented. I would have asked how I could possibly respond to this debate without addressing the issue which he raised in regard to the clause and which has been raised many times in this debate. It was said that the banking industry is not interested in these issues. If we are talking about confidence in the financial institutions and the banking industry, it is valid for me to point out that we have received from the important interested parties limited representations that differ from the tenor of the argument that we have heard today.

I reiterate that it is inevitable that there will be some conflict between the public interest objectives of resolving a bank in severe financial distress on the one hand and the provisions of legislation which are designed to work in a normally functioning business on the other. We are concerned to guarantee that the authorities can act in carefully circumscribed circumstances to deal with an emergency. I cannot give an illustration of such an emergency because we are seeking to guard against eventualities that may occur. We are not fighting as generals in the last war; we are trying to anticipate what is necessary in legislation to protect the financial system, because we are aghast at the consequences to the public interest of recent failures.

The Government consider it crucial to take a power to amend the provisions of primary and secondary legislation and common law within this very narrow framework to make the provision work. Are we disregarding Parliament in doing so? The noble Lord, Lord Forsyth, suggests that the Government are taking on not even Henry VIII powers but those of a medieval king—it sounded like a medieval king called Alice, but I cannot recall that historical figure.