Mr.
Hoban: I do not necessarily disagree with the
Minister’s logic, as it might be appropriate to disapply the
Freedom of Information Act to bridge banks, and he might be right that
that is what will happen to British banks in future. My question, which
relates to the other aspects of the order, is: why was that provision
not put in place in the Banking Act, rather than in the
order?
Ian
Pearson: That is the final point that I want to address.
The hon. Gentleman asked why the provision and others were not included
in the Banking Act. He will know the position with regard to parts 2
and 3 as they relate to building societies. We had intended to put that
in the legislation, which was the right thing to do, but the provision
was not ready at the time. We are dealing with complex situations, and
I do not want him to think that he was in any way an ineffective
scrutineer of the Banking Bill in Committee. Nor do I want those
following these proceedings closely to feel criticised by the hon.
Gentleman for not spotting some of those issues. I do not think that
the process of scrutinising the Banking Bill was in any way deficient,
but we all learn from events, and, when we discover situations we had
not foreseen, we should do something about them, which is exactly what
we are doing.
Mr.
Hoban: When we debated the Banking Bill in Committee, I
raised the issue of shadow directors. The Freedom of Information Act
and provisions relating to shadow directors had been disapplied to the
nationalisation of Northern Rock, so that learning has not suddenly
popped up in the last couple of months. It has been in legislation
since February last year, so why was it not included in the Banking
Act?
Ian
Pearson: Well, it was not, and perhaps it was a failing on
my part not to listen to the hon. Gentleman more diligently. On the
other
hand— Mr.
Richard Caborn (Sheffield, Central) (Lab): It always
worries me when Finance Ministers address complex issues, so would my
hon. Friend take a simple message back to his Treasury colleagues? The
mistakes that have been made over the years have led to the current
crisis, so they should make it simple so that ordinary people
understand it, because we are dealing with a very complex
issue.
Ian
Pearson: My right hon. Friend is right in seeking
simplicity. Many of the things that we are trying to achieve through
the Banking Act and, indeed, through the statutory instruments that we
are debating today are simple in principle. It is right to have an
FSCS, a bank insolvency procedure, a bank administration procedure, and
a parallel procedure for building societies. It is simple to agree
those basic principles. When it comes down to the detail of the
operation and the secondary legislation—the statutory
instruments—things get a little more complicated. We need that
level of detail, because we are dealing with complex financial
institutions. It
is right that we have probing questions from the hon. Member for
Fareham. Perhaps the Banking Bill
could have included a couple of extra matters, but it is key for anyone
who examines such measures to realise that, when we see situations, we
introduce legislation that deals with them the most effectively. That
is what we are trying to do. That is what we tried to do in
the Banking Act and what we are doing today with the
statutory instruments. As I have outlined, two of the orders will be
consulted on further and there will be opportunities for amendments and
reflections later this year. The consultees are very much aware of that
and agree with the time scale that we are considering for seeking views
from them about how the standing orders can be further
improved. Question
put and agreed
to. Resolved, That
the Committee has considered the Amendments to Law (Resolution of
Dunfermline Building Society) Order 2009 (S.I. 2009, No.
814). Resolved,
That the
Committee has considered the Building Societies (Insolvency and Special
Administration) Order 2009 (S.I. 2009, No. 805).—(Ian
Pearson.) Resolved, That
the Committee has considered the Financial Services and Markets Act
2000 (Contribution to Costs of Special Resolution Regime) Regulations
2009 (S.I. 2009, No. 807).—(Ian
Pearson.) 5.31
pm Committee
rose.
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