5 Wider reforms and our final Report
78. In our First Report we expressed scepticism
about the Government's apparent conviction that getting the proposed
Bill on the statute book in 2013 was the best way to ensure all
primary and secondary legislation to implement the ring-fence
was in place by May 2015. We emphasised that it was vital that
there was a full opportunity for parliamentary scrutiny of the
Bill itself and for consideration of crucial proposals for secondary
legislation in draft, and emphasised that "the primary concern
of Government, Parliament, regulators and the affected institutions
should be on getting the new legislation right".[175]
79. If this applies to the Bill as it stands,
it applies in equal measure to the provisions that are likely
to be added to the Bill. In its mid-term review, the Government
has made the following, welcome commitment:
We will introduce any necessary amendments to legislation
arising out of the Parliamentary Commission on Banking Standards,
including any necessary new criminal offences and associated penalties.[176]
The Government has also made clear that it intends
to use the Bill now before the House of Commons for giving effect
to legislative proposals arising from this Commission's work.[177]
80. In his speech on 4 February, the Chancellor
of the Exchequer encouraged us to "come forward with far-reaching
proposals" relating to professional standards and culture.[178]
The Secretary of State for Business, Innovation and Skills has
also suggested that "root-and-branch reform of the banking
sector is inevitable".[179]
81. When this Commission was first established,
we were required to report on the draft Bill before Christmas
and on other matters "as soon as possible thereafter".
In view of the intensity of our evidence-gathering processes and
the number of new issues that have arisen in the course of our
work, we now consider it likely that we will produce our final
Report by mid-May 2013. If we adhere to this timetable, the Government
will need some time to consider our recommendations and to bring
forward the necessary amendments to the Bill. In its response,
the Government has not shown signs of any new flexibility on the
timetable for the Bill,[180]
but the Chancellor of the Exchequer has referred to the Bill's
becoming law by early February 2014.[181]
The Commission considers it
essential that the timetable for the progress of the current Bill
through both Houses of Parliament allows adequate time not only
for the full scrutiny of the current content, but also for the
addition of provisions to give effect to the recommendations in
our final Report. We welcome the Chancellor of the Exchequer's
implied acknowledgement that Royal Assent in 2013 is no longer
appropriate. We recommend that the report and third reading stages
in the House of Commons do not take place before the Summer.
82. The Commission is encouraged
by the positive tone of the Government's response and by the steps
it has already taken or agreed to take to give effect to the recommendations
of our First Report. This augurs well for the Government's actions
in response to our final Report. There is, however, still a long
way to go if the legislation now before the House of Commons is
to provide legislative impetus for a transformation of the UK
banking system. The Bill as presented to the House of Commons
represents not the beginning of the end for the necessary reform
process, but the end of the beginning.
175 First Report, paras 12, 112 - 125 Back
176
HM Government, The Coalition: together in the national interest:
Mid-Term Review, January 2013, p 13 Back
177
First Report, para 9 Back
178
Chancellor's Banking Reform speech Back
179
Speech by Secretary of State for Business, Innovation and Skills
on 6 February Back
180
Banking reform, para 2.9 - 2.10 Back
181
Chancellor's Banking Reform speech: "I'm sending the legislation
to the House of Commons today and I expect them to be passed by
Parliament this time next year". Back
| 
