Banking Act 2009 (Restriction of Partial Property Transfers) (Amendment) Order 2009

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 Bank Act 2009 orders in March, I raised the point that the consultation, while greatly enhanced by the effective working of the Banking Liaison Panel, had effectively disappeared behind closed doors. The Explanatory Memorandum to the order states at paragraph 8.1: ""The Treasury has sought formal advice from the BLP subgroup. The advice will be published on the Treasury’s website in due course"." 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?