Baroness Noakes (Con)

My Lords, first, many thanks go to the noble Lords who supported my amendment. I thank the Minister for his response but, with the greatest respect, he did not go much beyond what is in the Treasury’s response to the consultation document. He reiterated that the Bank and the Treasury, or the Bank and its entities, are likely to be the ones that have their costs covered. I have no real problem with that—put it in the Bill. Similarly, the Minister talked about the Bank needing to be reasonable but I am not sure that being reasonable about the kinds of expenses that could occur via litigation is going to satisfy the banking sector, which fears that judgments working significantly to its disadvantage are going to be made and that it will have no way of influencing those decisions. There is not even the kind of protection that you get in insolvency, where you get, for example, creditors’ committees that act as a constraint on what liquidators can do. So I do not think that the Minister has really given a proper response on how the sector, which is going to pick up the tab—ultimately borne, as my noble friend Lady Vere pointed out, by the customers of banks—can be satisfied about the judgments made about the huge range of costs that could emerge during the course of handling a failed bank using the recapitalisation power; and how those costs can be seen to be properly incurred and not acting against the interests of the banks. The Minister also did not engage with the issue of whether, in estimating future costs, you should constrain the costs to those that are reasonably foreseen, which is a natural formulation in legislation. Frankly, “any costs that might be incurred” is too big a definition to be used reasonably. I think that that formulation needs to be used again. I will read carefully what the Minister has said in Hansard but my instinct is that he has not added to anything that is already in existence via the Treasury’s response to the consultation. I suspect that we will want to return to this on Report but obviously, for now, I beg leave to withdraw.