|Back to Table of Contents
|Lords Hansard Home Page
These amendments meet the vast majority of the market's concerns, and demonstrate that the Government are committed to working with the industry to ensure that the regime is as effective as possible. I would like to put on record the Government's thanks to the Banking Liaison Panel, and in particular the panel's subgroup on safeguards, for their very hard work and thorough advice. I hope that noble Lords will agree with this order, and I beg to move.
Baroness Noakes: I thank the Minister for introducing the order, which we are happy to support. In large measure it responds to the points that I made during the debate on the initial partial property transfer order back in March, following briefing from the BBA, LIBA and ISDA. In March, the Minister committed to bringing forward an amending order, if that proved desirable, before the Summer Recess on the basis of the work to be carried out by the Banking Liaison Panel. I congratulate the Minister on achieving that.
When we debated the Banking Act 2009 orders in March, I raised the point that the consultation, while greatly enhanced by the effective working of the Banking
29 Jun 2009 : Column GC9
That made me think that the terms of that advice would not be available to your Lordships' House in considering this order. I was pleasantly surprised to find that the advice was on the website when I researched it at the weekend, but that raised further issues. I am not sure exactly on which day the draft order was laid before the House, but it appears in the House of Lords Minute on 11 June. The advice from the liaison panel subgroup, however, is dated 17 June. This suggests that the Treasury had no intention of taking formal advice from the subgroup. Will the Minister say how we can be confident that the processes are robust and not simply window dressing to allow the Treasury to carry on doing what it wants to do?
The Explanatory Notes also give the impression that the only issue between the subgroup and the Treasury is that of the small companies that are a part of larger groups that have set-off or netting arrangements. The Minister addressed that, but in fact the formal advice shows that the subgroup offered drafts of alterations to the original partial property safeguards order that were not adopted by the Treasury. This applies in particular to the widening of the definitions of transactions included in netting and set-off arrangements.
Neither the Treasury in the Explanatory Memorandum nor the Minister today has explained how the Treasury's own drafting, which is very much less extensive than the drafting proposed by the subgroup, meets all the issues which the subgroup identified as giving rise to concerns. Will the Minister put on record why the Treasury rejected the subgroup's advice so that we can be clear about what happened?
The biggest difference-the Minister has referred to this-between the subgroup and the Treasury is the issue of small companies, as I have mentioned. The Minister said that it was the subgroup's fifth recommendation. In fact, it is its first recommendation. Indeed, the subgroup devotes nearly half its formal advice to the issue of small companies. Paragraph 17 of the advice states:
"The BLP subgroup believes that the case for excluding from the carve-out small companies that are part of a larger group is compelling. Extending protection to the small companies in question would reflect the commercial decisions taken by the companies themselves in the best interests of their company. We do not think that extending the protection to these small companies would weaken the attainment of any SRR objective".
That view is diametrically opposed to that of the Treasury, which has simply given its version of the practical difficulties that were rejected by the subgroup in its formal advice. Furthermore, the subgroup raised several other issues around small companies, such as the position of special purpose vehicles, which the Treasury, and indeed the Minister, seems to have ignored completely.
I note that the Treasury will ask the BLP to continue to consider this point but, given that the subgroup's view in its formal advice is unequivocal, how does the Minister see this proceeding? Is there a timetable for this, or is the long grass about to sprout up around it?
I also note that the Treasury's website still has no documentation in the form of minutes or anything else about the work of the Banking Liaison Panel itself. Those of us of a cynical disposition are well aware that bringing critics within the tent is a sure way of neutralising them. The Government refused to impose a requirement on the panel to publish its minutes, but we were given various assurances that something would be available. Either the panel is doing nothing, which I doubt, or it is conspiring with the Treasury to keep Parliament and the public unaware of its deliberations. Can the Minister say whether there is any genuine desire to achieve transparency in the work of the Banking Liaison Panel?
Lord Newby: The issues that are covered by this extremely arcane statutory instrument were among the most vigorously debated and contested when the Banking Bill was going through Parliament. The question of set-off and netting at one point was of huge concern to the banking industry but, during the passage of the Bill and subsequently, the work of the Banking Liaison Panel has largely resolved those differences.
As the Minister has said, this instrument takes forward the work that was covered by the earlier instrument in March and deals with many of the outstanding points. To the extent that there is a remaining issue around small companies, I, at least, am reassured by what the Minister said about the ongoing work of the panel in trying to resolve that issue.
Although I have some sympathy with the noble Baroness, and naturally share some of her cynicism about the attitude of the Treasury towards openness, the Banking Liaison Panel process has been remarkably effective in dealing with intricate issues which I suspect very few officials-and certainly very few politicians, whether in government or opposition-understood at the start of the process. We therefore support the order and hope that the panel will continue its work to resolve the one outstanding issue that has been raised today.
Viscount Eccles: Perhaps I may make a brief intervention as a Member of the Merits Committee. I reinforce what my noble friend Lady Noakes said on the matter of the advice being published on the Treasury's website. On the morning of the meeting, if I remember right-it might have been the day before-we asked whether we would be able to see this advice on the website because it did not look as though we would. In fact, we were not, although it did come on the day that the Merits Committee met.
The Treasury assumes-one understands why-a level of understanding among the people who look at statutory instruments in the Merits Committee that they may not always have. You could argue that from time to time the Treasury takes advantage of the fact that the chances are that the members of the committee are not as sophisticated as it is itself and minimises the explanation it gives us, rather than thinking of how to make it clear to the average Member of the House of Lords.
Lord Myners: I open by noting that the partial property transfers are an essential part of the authority's toolkit for resolving failing institutions, and it is important
29 Jun 2009 : Column GC11
The noble Baroness asked about timing, as did the noble Viscount, Lord Eccles. The Government have been consulting with the BLP on an ongoing basis since the first meeting shortly after the Act received Royal Assent. I agree with the noble Lord, Lord Newby, that the BLP has made significant progress in resolving what we all recognise to be technically complex and challenging issues. The panel's advice to the Treasury is the formal output of that consultation.
The Government's decisions were made on the basis of that advice and they have taken on the overwhelming majority of the panel's recommendations in the amendments that have been tabled. The order was laid as soon as the substantive policy discussions with the BLP were completed. This was necessary to allow Parliament time to debate and agree the order before the Summer Recess in line with the BLP's wishes and ministerial commitments. The advice itself was published shortly afterwards and is now of course available on the Treasury website.
I note the comments of the noble Viscount, Lord Eccles, about the explanations that are given in the papers that go to the Merits Committee. I shall communicate those comments to my colleagues in the Treasury who are responsible for these matters and ask them to bear in mind the need to recognise that, in preparing papers which of necessity deal with highly complex issues, we should make every effort to provide an enlightening context and explanation.
A question was raised by the noble Baroness about special purpose vehicles. The issue of whether SPVs should receive special protection is important. As the panel notes in its advice, it seems counterintuitive that SPVs should be treated as small companies for the purpose of the safeguards order. However, this is a practical question of whether it is possible to identify SPVs quickly enough in the timeframe of a resolution, which will usually of necessity take place over a very short period-frequently over a weekend. We are taking this work forward in the context of the small companies carve-out and we will no doubt hear more about that in due course.
The panel meets quarterly and the minutes will be approved at the next BLP meeting, at which point they will be published. There is a genuine desire on our part that there should be transparency about the process of the work of the BLP. Certainly there is no ground for suggesting that the BLP either is doing nothing, as it has evidently done a great deal, or is somehow conspiring with the Government, save that it is conspiring with the Government to ensure that we have the best possible arrangements in place to deal with the type of situation that this legislation is designed to handle.
The Treasury has not rejected the subgroup advice in respect of the small companies carve-out. It is completely appropriate for Treasury legal advisers to draft the order as necessary. BLP members include trade body representatives and commercial lawyers, who have brought a considerable expertise in a number of areas, but legislative drafting is not something that
29 Jun 2009 : Column GC12
Perhaps I may reply also to the noble Viscount. I am sorry that the BLP was only received on the day of the Merits Committee meeting. I can understand how frustrating that would have been for the committee. I will make every effort-inasmuch as it is within my power-to invite colleagues to arrange things in a better way in the future. I commend this order to the Committee.
That the Grand Committee do report to the House that it has considered the draft Transfer of Functions of the Consumer Credit Appeals Tribunal Order 2009.
Lord Tunnicliffe: I shall speak also to the draft Transfer of Functions (Estate Agents Appeals and Additional Scheduled Tribunal) Order 2009, the draft Transfer of Functions (Transport Tribunal and Appeal Panel) Order 2009 and the draft Transfer of Functions of the Charity Tribunal Order 2009.
These orders transfer the entire jurisdictions of the consumer credit appeals tribunal, the estate agents appeal panel, the charity tribunal and most of the jurisdiction of the transport tribunal into the first-tier tribunal and upper tribunal created by the Tribunals, Courts and Enforcement Act 2007. This is a further phase in a series of transfers.
The need to re-examine the tribunals system was first set out in Sir Andrew Leggatt's review Tribunals for Users-One System, One Service. Accepting his proposals, the Government created the Tribunals Service in 2006 and this was followed by the Tribunals, Courts and Enforcement Act 2007. It provided for the first-tier tribunal and upper tribunal, creating a unified appeal structure.
In November 2008, three first-tier chambers commenced work: the social entitlement chamber, the health, education and social care chamber and the war pensions and Armed Forces compensation chamber. The administrative appeals chamber of the upper tribunal was also established. In April 2009 the first-tier tribunal tax chamber and the upper tribunal finance and tax chamber were established, and this was followed by the creation of the upper tribunal lands chamber this month.
These transfer orders provide for the first transfers into the new general regulatory chamber of the first-tier tribunal, which will be established on 1 September 2009. Part of the jurisdiction of the transport tribunal will also transfer to the upper tribunal administrative appeals
29 Jun 2009 : Column GC13
A separate order, which is subject to the negative resolution procedure, will amend the existing chambers order to establish the general regulatory chamber and assign functions to the chambers as appropriate.
Each chamber under the Act is required to have a chamber president, whose role is the maintenance and improvement of the chamber's expertise. The first-tier tribunal general regulatory chamber will have a chamber president selected by the Judicial Appointments Commission. An acting chamber president will be appointed by the senior president of tribunals under his powers in the Act until an appointment can be made.
Each of the transfer orders provides for the transfer of existing judges and members to the first-tier tribunal or upper tribunal as appropriate, which is essential for ensuring that a good service is maintained and existing specialist expertise is protected. The provisions of the Act mean that judges and members can be invited to sit in another jurisdiction within the tribunal to which they have been transferred, but that will happen only if the individual has the necessary qualification, is acceptable to the chamber president and has undertaken any necessary training, and if there is a business need.
Rules for the general regulatory chamber will be made by the tribunal procedure committee, which was created under the Act. The committee is chaired by a Lord Justice of Appeal, Lord Justice Elias, and includes representatives from a number of organisations, including the Administrative Justice and Tribunals Council, the Bar Pro Bono Unit and the Free Representation Unit. The rules are made with the agreement of the Lord Chancellor and laid before Parliament under the negative resolution procedure. Rules for the upper tribunal administrative appeals chamber are also made by the tribunal procedure committee and replace existing functions for the transport tribunal.
Transitional provisions in each of the orders ensure that cases currently being heard by the transferring tribunals will not be adversely affected by the transfer. A hearing that has commenced but not completed will be completed by a panel comprising the same members. Directions and orders made by a transferring tribunal prior to each of these orders coming into force will continue in force as if they were directions or orders of the first-tier tribunal or upper tribunal, as appropriate.
I turn to the detail of each order. I will take the consumer credit appeals tribunal and estate agents appeal panel together. Article 2 of the Consumer Credit Appeals Tribunal Order 2009 and the Transfer of Functions (Estate Agents Appeals and Additional Scheduled Tribunal) Order 2009 transfers the jurisdictions in their entirety to the first-tier tribunal and abolishes the consumer credit appeals tribunal and the estate agents appeal panel.
Article 3 of both orders provides for members of the tribunal and panel to be transferred to hold offices in the first-tier tribunal and, in the case of the president of the consumer credit appeals tribunal, in the upper tribunal.
Article 4 of the consumer credit appeals tribunal order 2009 and Article 5 of the Transfer of Functions (Estate Agents Appeals and Additional Scheduled Tribunal) Order 2009 provide for consequential amendments to and repeals and revocations of primary and secondary legislation, and transitional and saving provisions. These are set out in full in the schedules.
Article 4 of the estate agents appeal panel order adds the London service permits appeals panel to the table in Part 4 of Schedule 6 to the Tribunals, Courts and Enforcement Act 2007. That brings the London service permits appeals panel within the scope of the Lord Chancellor's power to transfer tribunal functions to the first-tier tribunal or the upper tribunal. The functions of the panel are transferred to the first-tier tribunal in the transport tribunal order.
I move now to the draft Transfer of Functions (Transport Tribunal and Appeal Panel) Order 2009. Article 2 transfers part of the jurisdiction of the transport tribunal to the first-tier tribunal and part to the upper tribunal. That is in line with our proposals in our consultation Transforming Tribunals in 2007. The jurisdiction to hear appeals from decisions of traffic commissioners transfers to the upper tribunal administrative appeals chamber.
Traffic commissioners are in effect an appeal body when they make a decision in cases that can be appealed to the transport tribunal and, in that capacity, are subject to the oversight of the Administrative Justice and Tribunals Council. It is therefore more appropriate to transfer appeals against decisions of traffic commissioners to the upper tribunal, to preserve the current status of the transport tribunal as a superior court of record when dealing with these types of appeals. The remaining jurisdiction transfers to the first-tier tribunal and generally deals with appeals from the Driving Standards Agency. Such appeals are appropriate for the first-tier tribunal, given its first-instance jurisdiction. Appeals to the London service permits appeals panel are also transferred to the first-tier tribunal.
Unlike most other transfer orders, this order does not abolish the transport tribunal, as it is necessary to retain the tribunal to hear appeals under the Transport (Scotland) Act 2001. As a devolved matter, that function of the transport tribunal cannot be transferred in the order. An amendment by way of primary legislation is needed before that can be achieved. The Scottish Government will consider whether they wish to transfer the appeal route in the Transport (Scotland) Act 2001 to the upper tribunal when an appropriate legislative opportunity becomes available.
Additionally, the transport tribunal will retain jurisdiction to hear appeals in relation to quality contract schemes introduced by the Transport Act 2000, as amended, which have yet to be brought into force. We are unable to transfer those provisions at this time as no decision has been taken on where the appeal should lie. A decision will be made after a forthcoming consultation has considered responses to the question. We intend to make an order transferring the functions of the transport tribunal in relation to quality contract schemes as soon as we are able, following completion of the consultation. A separate order will provide for this jurisdiction to be dealt with in the general regulatory
29 Jun 2009 : Column GC15
Article 3 of this order provides for judges and members of the transport tribunal to be transferred to hold offices in the upper tribunal. Since all members of the London service permits appeals panel are also members of the transport tribunal, there is no need to transfer the members of that panel separately. Article 4 provides for consequential amendments to, and repeals and revocations of, primary and secondary legislation, and transitional and saving provisions. Those are set out in full in the schedules.
I turn to the transfer of the charity tribunal. The jurisdiction will be transferred in part to the general regulatory chamber and in part to the finance and tax chamber of the upper tribunal. Cases will be heard in the first-tier tribunal except where it is decided by or under tribunal procedure rules that the upper tribunal is better suited to hear a particular case-for example, where the case raises complex or unusual issues or its importance merits it being dealt with in the upper tribunal, which is a superior court of record and can set precedent.
Onward appeals from the charity tribunal are currently dealt with by the Chancery Division of the High Court. Onward appeals from the first-tier chamber will be dealt with in what is currently the finance and tax chamber of the upper tribunal. This chamber is headed by a judge from the Chancery Division, and other Chancery Division judiciary may sit in the chamber alongside upper tribunal judges. To reflect the extended remit of the chamber, it will be renamed as the "tax and chancery chamber" in the amendment to the chambers order that I referred to earlier. Onward appeals from the tax and chancery chamber, as with other chambers of the upper tribunal, are direct to the Court of Appeal.
I turn to the detail of the order. Article 3 provides for members of the tribunal and panel to be transferred to hold offices in the first-tier tribunal and, in the case of the president of the charity tribunal, in the upper tribunal. Article 4 of the order provides for consequential amendments to, and repeals and revocations of, primary and secondary legislation, and transitional and saving provisions. These are set out in full in the schedules.
The Government are committed to the ongoing transformation of our tribunals, placing the user at the very heart of the service. The unified system will have greater flexibility in absorbing new work and responding to fluctuations. The orders that I bring before the Committee today are another significant step towards achieving this. I commend these draft statutory instruments to the Committee. I beg to move.
Lord Henley: I will be brief. I thank the Minister for introducing these four orders. We have had a number of transfer of functions orders over the past few months, some of which-for example, those dealing with war pensions-were somewhat more controversial than others. These come at the bottom end of the scale
29 Jun 2009 : Column GC16
Secondly-I really ought to be able to remember this from whatever assurances the Government gave at the time of the 2007 Act, or when Sir Andrew Leggatt's report originally came out-but presumably the department will make savings as a result of this streamlined system of tribunals. What estimate did the Government make of those savings at the time of the 2007 Act? Are they on target to meet those savings when all this comes into effect?
|Back to Table of Contents
|Lords Hansard Home Page