Banking Bill

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The purpose of proposed new section 221A is to allow the compensation scheme to delegate its decisions to a contractor, referred to as the “scheme agent”. The person might be the liquidator appointed under the bank insolvency procedure, another firm of accountants or a suitable firm, but the key point is that the decisions necessary for enabling speedy payouts from the FSCS have to be made quickly, in large numbers and in an automated way. That could not happen if all decisions had to be referred to the FSCS itself, even if all that took place was that the decisions were then ratified by the FSCS computers.
The decision-making process will therefore have to be delegated. Of course, the FSCS will keep the ultimate responsibility for the decisions. The scheme agent will be an agent of the FSCS and carry out functions on its behalf, not an independent decision maker. Rather than appoint a person to perform its functions, proposed new section 221A would simply provide that arrangements may be made with another person to perform any of the FSCS functions. Those arrangements are likely to take the form of a normal contract for services rather than a contract of employment and, if the contractor fails to perform, the FSCS will be able to take action for breach of contract in the normal way through the courts.
I appreciate the probing nature of amendment No. 10, but the mechanism that it proposes is unnecessary and could cut across the normal ways of dealing with breaches of contract in an unhelpful way. I hope that my explanation of proposed new section 221A has been helpful to the hon. Gentleman.
Mr. Breed: I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 165 ordered to stand part of the Bill.
Clause 166 ordered to stand part of the Bill.
Further consideration adjourned.—[Mr. Blizzard.]
Adjourned accordingly at twenty-four minutes past Three o’clock till Tuesday 28 October at half-past Ten o’clock.
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