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

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 for legal certainty and market confidence that the safeguard order provides adequate protection to the use of these powers. 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 BPL. 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 we look to the BLP to do. The key point is that the Treasury’s drafting has the desired effect and reflects the substance of the panel’s requested changes to the definition of "relevant financial instrument". 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. Motion agreed.