Amendments to Law (Resolution of Dunfermline Building Society) Order 2009

My Lords, I thank all noble Lords who have participated in this debate for their useful and at times challenging contributions. The noble Lord, Lord Goodlad, asked a broad but important question: do we in Government believe that the use of Section 75 powers here was in accordance with the explanations that we gave when seeking those powers. As noble Lords know, I come new to these issues. When Henry VIII powers were first mentioned in my presence, I could tell from people’s body language that I needed to take them seriously. When they were explained to me I realised why that was the case. I recognised that they are not powers that any Government should seek unless they really believe that they are necessary and that they should always use them with great care. That applies in this case and I take some comfort from the noble Lord, Lord Newby, in that respect. The noble Baroness raised a number of questions, including about pensions. I noted what was said in the other place by the honourable Member for Fareham, whose work I study with great interest and whose contribution to debate in the other place on matters in connection with finance and banking is of a high order. She asked why Section 75 and not Section 71 was used to deal with pensions. Section 71 was used to make the provision in paragraph 9 of the banks’ property transfer instrument. The order makes further changes to legislation in consequence of the arrangements made with Nationwide, which do not affect accrued rights. In respect of pensions, the noble Baroness made some observations about an apparently different treatment between the approach adopted at the Dunfermline Building Society and that in respect of Northern Rock. I believe that the answer here is the different standing of the pension fund of a bank compared with a building society. Because of the nature of the capital structure of the building society and the depositors being members of the society ranking behind senior creditors, and the pension fund constituting a senior creditor, the situation of members of the defined benefit pension scheme of the Dunfermline is rather good. They have a significant claim ahead of others on the assets of the Dunfermline Building Society, which should give them considerable comfort in contemplating their retirement.