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Clause 7

Part of Banking Bill – in a Public Bill Committee at 9:45 am on 6th November 2008.

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Photo of Mark Hoban Mark Hoban Shadow Minister (Treasury) 9:45 am, 6th November 2008

Indeed, that is part of the problem. I tabled my amendment to delete subsection (6) because I interpreted the clause to mean that the general conditions would be exercised very differently from the powers exercised by the FSA under the Financial Services and Markets Act. However, the Minister says that there is a boundary or demarcation line, and that the FSA will consider the threshold conditions in the context of the FSMA and its rulebook. That will be one part of the boundary, and then it will flip over into the powers granted by the Bill to the Bank and the Treasury.

However, that demarcation line does not actually exist. There is no clear line. It is more of an iterative process among the tripartite authorities—I do not think that one can have a circular decision tree—that will affect how the FSA exercises its powers under the FSMA and how the powers in the Bill will work. We are trying through a legal process to impose clarity where clarity does not necessarily exist, and part of the challenge is reassuring people about how the powers will be exercised when that degree of clarity is lacking.

That is part of the Government’s challenge in communicating how the Bill will work in practice. The explanatory notes do not make the process clear, so it is again up to our old friend the code to elaborate on that slightly circular process. We need to work a bit harder on explaining how the initial process will work in practice. However, I beg to ask leave to withdraw the amendment.