Mr.
Gauke: I am grateful to the Minister for those comments. I
do not disagree with him on whether the Treasury should take a leading
role. The question is whether it takes the sole role. I should like to
press him on this matter. Is the origin of the clause a degree of
tension that exists as a consequence of the Northern Rock issue and the
view that the Bank of England took
on the restrictions that applied to any covert action that it
could take? There is a feeling that it took a more
prescriptive view than was generally deemed
necessary.
Ian
Pearson: The origin of the clause lies in the consultation
and the fact that we think it a necessary part of the Bill. Of course,
the Treasury will talk to the Bank of England, and they will work
together on all these matters. It is entirely right and proper that
someone should lead and take final decisions. When it comes
to international obligations, that has to be the
Treasury.
Mr.
Gauke: If the Bank of England took a different view and
said that international obligations prevented it from doing something
and the Treasury said that they did not, would the Treasury view
prevail?
Ian
Pearson: I do not want to get into hypothetical
circumstances, but let me make it clear that the Treasury has the lead
responsibility in this regard. It will be the Treasury’s views
that count when considering what our international obligations are and
how they should be
interpreted. Question
put and agreed
to. Clause
66 ordered to stand part of the
Bill. Clauses
67 to 75 ordered to stand part of the
Bill.
Clause
76Credit
unions Question
proposed, That the clause stand part of the
Bill.
Mr.
Hoban: I have a quick question for the Minister. In what
circumstances does he envisage introducing orders to apply the SRR to
credit
unions?
Ian
Pearson: The clause creates a power to extend the SRR to
credit unions. We will keep the position under review, but we have no
immediate plans to extend stabilisation powers such as bridge bank,
temporary public ownership and private sector purchasing powers to
credit unions at this time. Credit unions have a relatively small
number of depositors, and their failure does not pose the same threat
to financial stability that the failure of banks and building societies
might. Moreover, credit unions are dealt with effectively under
existing insolvency procedures. However, it is important to keep the
matter under review. We have talked about future-proofing legislation,
and that is what this provision does.
Question
put and agreed
to. Clause
76 ordered to stand part of the
Bill. Further
consideration adjourned.—[Mr.
Blizzard.] Adjourned
accordingly at twenty-four minutes past Ten o’clock
till this day at One
o’clock.
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