Scottish and Northern Ireland Banknote Regulations 2009

My Lords, the noble Baroness has made explicit her concerns, and earlier I attempted to identify how these concerns were being addressed, not perhaps in quite the way that she wished. She is absolutely right that the regulations do not make a formal requirement to consult on the penalty policy on the issue of appeal. As I indicated earlier, the Bank of England has circulated to the issuing banks the appeals procedure that it envisages alongside the latest draft of the rules. The Treasury can only approve the rules. It does not have the power to approve the penalty policy. The Bank of England is working against the background that, on consultation, the issue with regard to the penalty policy and the right of appeal, which the noble Baroness has stressed, is important. The Bank of England is working closely with the Treasury while drafting both the rules and the penalty policy. The Bank of England remains answerable. If the policy is manifestly unreasonable, if what was created was a structure in which the right of appeal was not a significant right for anyone undergoing the penalty, the Bank could be subject to judicial review. As a public body, it is all too well aware of its responsibilities in those terms. I am sorry that I am not able to take the issue much further than that. The noble Baroness has identified that these are the limits of the regulations regarding the appeal policy. I am stating that that is so, but insofar as the Bank of England wants to act fairly and justly and deal in its consultation with the issues that have arisen, the Committee can rest assured that the Bank is proceeding in a way that guarantees that it acts entirely properly in this regard. The regulations are of the greatest importance. They ensure that holders of Scottish and Northern Ireland banknotes will be afforded the same level of protection as that afforded to the holders of Bank of England banknotes. The regulations are the first step in implementing Part 6 of the Banking Act 2009, which established the framework of the new regime after very considerable consultation. It will be recognised by the Committee that throughout the process the Treasury has worked closely with the Bank of England and with the issuing banks on the evolution of this policy, against a background where we all recognise why we needed a new banking Act and why the wider public needs every confidence to be restored with regard to a matter of such importance as banks that issue banknotes. Motion agreed.