Financial Services Bill

My Lords, if one thing has been clear in the economic chaos of recent times, it is the failure of the tripartite agreement set up by the present Prime Minister. The curious thing is that effectively the Bill seeks to enshrine in legislation more precisely the same arrangement. It is not an effective way of proceeding. In particular, representations from the British Bankers’ Association state that despite the provisions in the Bill, ""The key here as far as we are concerned is that the responsibilities of each entity in times of crisis remain unclear"." That is the case. I certainly understand the frustration of the noble Lord, Lord Barnett, and, as regards the remarks of the noble Lord, Lord Newby, it is absolutely clear that this part of the Bill is not something that we on this side of the House believe we should support. In particular when we come to later stages, it is absolutely clear that it was a mistake to take responsibility for what is now called macroprudential regulation—I am not absolutely clear what that means—away from the Bank of England. Far better that it should reside where it used to, particularly as much of this macroprudential regulation is involved to some extent with general macroeconomic management, where the FSA has no useful function to perform whatever. My noble friend is right to ask who is in charge. I worked for Unilever many years ago. It had a tripartite management board and no one was quite clear who was in charge. The crucial thing was to find out which of the three had the resignation letters of the other two in their right-hand drawer. In this context, it is fairly clear who is in charge: it is the Chancellor of the Exchequer. At the end of the day, he must be in charge since he is the one who is accountable to Parliament. If that is so, it is not clear what this amendment will significantly add. All it effectively says is that the structure is the same but this council will ensure they do their jobs properly. That is in essence what it seeks to do in legislative form. As I say, the structure itself is wrong and simply having a co-ordinating arrangement of this kind does not get us any further forward. Finally, as far as the structure is concerned, what is the position with regard to officials? Presumably the council is going to have some form of secretariat. As far as the operational decisions are concerned, are the Bank of England, the FSA and the Treasury going to have their own staff who all then put up briefs saying what ought to be put to the council, or are there going to be independent people in the council seeking to co-ordinate the representations which come up from the three bodies?