Mr.
Hoban: It is neither relevant nor controversial. That is
absolutely right. I hope that whoever championed the private
Member’s Bill in 1999 will get satisfaction from seeing this
clause in the Bill. I return to the point that I made earlier. While
this may not be an area of huge controversy, I suspect that clause 226
was probably more controversial. I do not think it appropriate to use
the Bill in this way to tidy up an unsuccessful private Member’s
Bill. Someone missed out on the opportunity to get a gift in the next
ballot for private Members’ Bills in the next Session. I am not
going to press the matter to a
vote. Question
put and agreed
to. Clause
231 ordered to stand part of the
Bill.
Clause
232Regulations Question
proposed, That the clause stand part of the
Bill.
Mr.
Hoban: Why is this in the
Bill?
Angela
Eagle: I should like to take a little time to explain
that. The clause enables the Government to make future regulations
relating to financial collateral, which is a key underpinning of modern
financial markets. It is a way to allow collateral takers to borrow at
more advantageous rates than otherwise and is a key risk management
tool in credit risk. That is why it is relevant.
The power is
retrospective as regards the current scope of the regime. This is a
contingency measure in the light of a potential legal challenge to the
power to make existing regulations. It is a retrospective power that
could not be used outside the current scope of regulations other than
to provide for matters following from a situation where the existing
regulations were to be quashed. This is a relevant piece of activity
which relates directly to financial collateral which underpins modern
financial markets, so it is an important aspect of what we are
discussing
today.
Mr.
Hoban: As I understand the numbering system used by the
EU, the directive is from 2002. Why has it taken the Government until
2008 to get round to thinking about introducing a power under
it?
Angela
Eagle: I cannot answer that question as I have not been
involved in this area since 2002. I can tell the
hon. Gentleman, however, that clause 232 provides the power to make
future regulations relating to financial collateral. That is an
important aspect of underpinning markets and has to do with stability
and current UK financial collateral regimes. A threatened court case
does have some implications, but this is a key updating part of
underpinning assumptions. A question about whether the understanding
behind those assumptions was ultra vires was taken to court. It would
have been
very threatening had that been found to be the case, but this puts the
issue beyond doubt.
Question
put and agreed to.
Clause
232 ordered to stand part of the Bill.
Clause
233 ordered to stand part of the Bill.
Further
consideration adjourned.—[Mr.
Blizzard.] Adjourned
accordingly at nineteen minutes to Four o’clock till Tuesday 4
November at half-past Ten
o’clock.
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