Banking Bill

I welcome the strong cross-party support for the Bill and I look forward to future stages, during which Members will have the opportunity to examine its provisions more closely and to improve it. I will try to reply fully to the key points made in the debate, but I hope that hon. Members who have contributed—12 Back Benchers in all—will not be disappointed if I cannot mention all their names. These are challenging times for financial markets and economies across the world. The Bill is one important part of a package of action and reform to improve the UK's system for ensuring financial stability and protecting depositors. Over the past year, the Government have been working with the Bank of England and the Financial Services Authority to tackle these issues in the UK and also at international level. As the House is aware, the Government have stepped in on several occasions to protect the stability of the UK's financial system—in the cases of Northern Rock and Bradford & Bingley—using the powers provided by the Banking (Special Provisions) Act 2008, but that legislation was only ever designed to be temporary, and the need for long-term arrangements to ensure financial stability and protection for depositors in the UK is clear. I am glad that it is widely supported. The Bill is a central part of the Government's package to strengthen the UK's framework in this sphere. The decisive and comprehensive action that we have taken to improve the capitalisation and liquidity of UK banks, on which the Chancellor has made recent statements to the House, is another fundamental element of the package. I want to emphasise that the Bill is the result of a comprehensive process of consultation, including three consultation documents issued jointly by the Treasury, the Bank and the FSA. We have consulted extensively with key industry players and experts and, of course, we have had valuable input from the Treasury Committee. One of the criticisms from the Opposition has been that we have not moved quickly enough. People in the industry, however, might say that we were moving too quickly. However, as I understand it, there is an urgent requirement to get legislation on the statute book by the time the temporary provisions in the Banking (Special Provisions) Act 2008 expire. The Bill provides a permanent addition to the UK framework for financial stability and depositor protection, and the arrangements will provide the UK authorities with a refined and proportionate set of tools to deal with difficulties in the banking sector that can affect depositors and the wider economy. I accept that it is vital to get these proposals right, ensuring that the UK's framework is sufficiently robust to deal with the future as well as with current challenges. I believe the Bill provides the right framework and range of powers to ensure that, but it can no doubt be improved by debate in Committee.