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Proposed new subsection 3(8) is simply a clarification that the clause does not apply to these types of transfer. I hope that that amendment will prove acceptable. I beg to move.

Baroness Sharp of Guildford: I am grateful to the Minister for her response. I see that gremlins have got into the amendments. I confess that I did not check it on the Marshalled List, but the amendment that I had proposed refers to:

“Page 3, line 18 “transfer arrangements shall”.

That picks up the point that the Minister answered in relation to the amendment tabled by the noble Baroness, Lady Verma. I note that her amendment relates to line 20, and so refers to subsection (5)(b) and (c) and not to paragraph (a), whereas my amendment related to paragraphs (a), (b) and (c).

I am grateful to the Minister for replying to the amendment as put down in the Marshalled List. I conceived a more or less nonsense amendment, and I apologise for wasting her time. These issues of onward transfer are difficult. I take the Minister’s point entirely that it is an unlikely event but that the Government have to provide for it. If the loan portfolio or special-purchase vehicle were to be bought up by an overseas body would that be a bad thing or not?

It is very difficult to tell. Many of these Middle Eastern states—and China, for that matter—are running large investment organisations. In many senses it would seem not ideal that it should be held by them, but in the modern global village in which we live it could well be.

I shall look with interest at what the Minister said. I shall consider whether it is worth bringing back the amendment that I meant to table.

Baroness Verma: I, too, thank the Minister for her responses. The noble Baroness, Lady Sharp, raises some important points about SPVs. The control of

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borrowers and their loans will go into their hands on multiple sales. It is difficult to see how the Government will be able to put enough safeguards in to be able to assure us that terms and conditions will not be changed. Although the Minister stipulates very eloquently. I have difficulty in envisaging that in the long term with multiple sales.

I thank the Minister for taking away Amendment No. 11 to have a rethink about it. I think that when she has seen the points that we have made about the amendment she will, perhaps, be inclined to see it our way. While the Minister may be able to track the loans, once a loan is sold and is no longer in the Government’s control, what happens to the loan? While it appears that the Secretary of State cannot be involved in every loan sale, there must be some mechanisms in place for tracking loans and monitoring their outcomes.

Baroness Morgan of Drefelin: There will be provisions in the contract to ensure that the Secretary of State is notified of any onward sale, so we will know that an onward sale has been made and where. I stress that the trade and the buying and selling will be of the bonds. The title and ownership of the loans will stay with the special purpose vehicle. One can never say never, but we believe that it is extremely likely that they will stay with the special purpose vehicle and that the buying and selling that happens will be of the bonds themselves. I know that the noble Baroness appreciates that point, but I wanted to emphasise it again.

Baroness Verma: I thank the Minister for that clarification. However, the worry that we have on our Benches, as the noble Baroness, Lady Sharp, has on hers, is that there will be multiple sales and there will be no control from the Secretary of State, even if they are sold in bonds, if those bonds are traded on the stock market with all the ups and downs. The difficulty is that we do not have enough assurances from the Minister. I look forward to reading in Hansard what has been said today. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 12 and 13 not moved.]

Baroness Morgan of Drefelin moved Amendment No. 14:

Clause 3, page 3, line 27, at end insert—

“(8) References in this section to the further transfer of transferred rights do not include references to arrangements under which—

(a) transferred rights become held on trust, (b) other equitable interests are created or transferred in relation to transferred rights, or(c) securities are granted in respect of transferred rights.”

On Question, amendment agreed to.

Clause 3, as amended, agreed to.

Clause 4 [Loan regulations]:

[Amendments Nos. 15 to 17 not moved.]

Clause 4 agreed to.

Clause 5 [Repayment]:

[Amendments Nos. 18 and 19 not moved.]

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Baroness Morgan of Drefelin moved Amendment No. 20:

Clause 5, page 4, line 13, leave out “2(2)” and insert “2”

On Question, amendment agreed to.

[Amendment No. 21 not moved.]

Clause 5, as amended, agreed to.

Clause 6 [Information]:

Baroness Morgan of Drefelin moved Amendments Nos. 22 to 25:

Clause 6, page 4, line 18, leave out “In relation to transferred loans,”

Clause 6, page 4, line 22, leave out from “with” to end of line 23 and insert “loans that have been or may be transferred

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(including onward disclosure by virtue of subsection (4)).”

Clause 6, page 4, line 32, leave out from “disclosure” to “, and” in line 33 and insert “for purposes in connection with loans that have been or may be transferred”

Clause 6, page 4, line 35, at end insert—

“(4A) The reference in subsection (4)(b) to an agent includes an auditor.”

On Question, amendments agreed to.

[Amendment No. 26 not moved.]

Clause 6, as amended, agreed to.

Clauses 7 to 13 agreed to.

Bill reported with amendments.

The Committee adjourned at 4.55 pm

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