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I have a different set of concerns. The clause starts:
The second stabilisation option is to transfer all or part of the business of the bank to a company.
I want to talk briefly about partial transfers. In our evidence sessions concerns were expressed about that remedy. Angela Knight was particularly vocal. Responding to a question from the hon. Member for Gosport, she said that
we would like to see an entire bank move... Partial transfers come rather a long way down the list. Our preference would be not to have a partial transfer unless there has been a default. If it is the decision of Parliament that a partial transfer must remain as part of the SRR tools before a default is triggered, it is absolutely essential that the creditors rights are not reordered, that the netting is properly taken care of and that the decisions taken at the time cannot be retrospectively changed by clause 65.[Official Report, Banking Public Bill Committee, 21 October 2008; c. 48, Q136.]
She was a particularly eloquent witness. She gave some reasons for her stance and her distaste for a partial transfer earlier in the proceedings in answer to a question from the hon. Member for Fareham. [Interruption.] I am sorry. My phone is ringing. It is not a call from the British Banking Association, although one would have been helpful.
Angela Knight told the Committee that
other peoples intervention regimes do not interfere with creditors rights, and netting agreements are preserved so that there is not the problem of not being able to net off your capital. Certainly, we have been told by a number of our members that if they could not net off, they would no longer be able to do that business here in the UK, so we would see a commensurate loss of a significant amount of business out of London.[Official Report, Banking Public Bill Committee, 21 October 2008; c. 38, Q109.]
The allegation is that there is a possibility on the horizon that fewer people will engage in banking activities in the City of London or in the UK.
I reiterate those concerns because they were legitimately brought up by the British Banking Association in a particularly eloquent and telling way. It may be that the concerns the association is voicing are well addressed by subsection 3, which provides for a code of practice that may allay the associations concerns about what might be regarded as an unfair or improper partial transfer. We can return to the debate about toxic and non-toxic assets and how we treat them differently, but the Minister has heard the concerns of the BBA. Has he had time to consider and respond to them? The concern is primarily about the first sentence of the clause; the association has a distaste for partial transfers because it thinks that as long as they are in the toolkit there will be detriment to City business, so I would like the Minister to respond to that concern.