Ian
Pearson: I appreciate the probing nature of the amendment,
but it is the Governments view that it is
unnecessary and almost certainly unworkable. I fear that it might have
arisen from a misunderstanding of what the proposed new section 221A of
the 2000 Act will do and how it will work. I shall explain the
Governments thinking behind it and, if the hon. Gentleman has
further questions, I shall be happy to hear
them. 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withdrawn.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 oclock till
Tuesday 28 October at half-past Ten
oclock.
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