Financial Services Bill

My Lords, I, too, congratulate my noble friend Lord Hamilton on bringing forward this amendment. As the noble Lord, Lord Newby, reminded us, we had an excellent debate at Second Reading in which the topic that lies behind the amendment featured prominently. My noble friend Lord Lawson, whom I am pleased to see in his place, made a very strong case for the Glass-Steagall kind of separation. My noble friend Lord Blackwell, who wanted to be here today to take part in this debate but unfortunately could not be, also made a contribution, which was referred to by my other noble friends. It is to state the obvious to say that it is not our party’s policy to have the Council for Financial Stability. However, if we are going to look at the possibility in the context of the Bill, and if we have to have one, we might as well make sure that it does something useful, which is why my noble friend’s suggestion of a report on the structure of the UK financial system is an excellent topic. Our debate in the past 30 minutes or so has shown that there is an appetite for such a report and such a public debate. As has been said, this topic will not go away. Last summer, when the Government issued their White Paper, Reforming Financial Markets, they set out a number of changes, many of which have found their way into the Bill. However, the White Paper had an element of complacency about it: it did not contain a critique of the structure of the UK financial system, and there was no reference to even considering structural changes to banks. Broadly, the Government’s view seemed to be that they could go forward with more regulation, which would make everything all right. The topic has arisen in your Lordships’ House on many occasions, often during Oral Questions. The Minister’s response has generally been that structural change is not necessary because more capital and more regulation—and sometimes more governance, which today I think is coming out as more management—are capable of solving practically any problem in the banking system. The noble Lord, Lord Desai, gave us another one—that living wills are capable of solving practically any problem that can arise, which shows touching faith in that. My noble friend Lord Northbrook reminded us that this was—