Lords to scrutinise 'rushed and defective' banking Bill

Reform meant to prevent another crisis may make Bank too powerful, say critics

Members of the House of Lords will today debate major amendments to the Government's far-reaching banking reforms after peers made an unprecedented request to fix what it called a "rushed and defective" piece of legislation.

It is understood that a group of cross-party peers asked the Treasury Select Committee for technical assistance to translate some of its proposals of changes to the Financial Services Bill into amendments in a bid to curb the power of the Bank of England. That's after the TSC first took the highly unusual move of publishing a special report into the legislation last month.

The Committee raised concerns that the Bill – which abolishes the Financial Services Authority and splits its powers between a new Financial Conduct Authority and the Bank of England – was being rushed through Parliament without adequate scrutiny. That's despite the TSC's chairman Andrew Tyrie describing it as "the most important overhaul of financial regulation ever undertaken in this country".

Most of the suggested amendments are aimed at stymying the reach of the Bank of England, which the Bill would make the most powerful unelected institution in Britain. It is believed a significant number of the changes had already been tabled at various stages of Commons scrutiny, but received little consideration due to the relatively short time provided for debate.

Mr Tyrie told The Independent: "It was an unusual step for the Committee to produce a report specifically designed to assist consideration in the Lords. But this crucial Bill warrants it. Despite being very complex, it has been rushed through, lacking clear lines of accountability to the respective roles of Parliament, the Government and the Bank.

"It was clear from the debate in the Lords at the Bill's second reading that many of those peers with most experience of the subject had similar concerns. Many people would not start from this point, but nonetheless there is still plenty of scope for improvement of what is at the moment a defective Bill."

The Committee hopes that the Lords will make changes to the Financial Services Bill before it comes into force next year. The amendments – tabled by peers including the Treasury minister Lord Sassoon, Baroness Wheatcroft, a former editor of the Wall Street Journal Europe, and the economist Lord Peston, propose that the Bank's governance not be left to Threadneedle Street.

They recommend that the Bank of England's court of directors undertake retrospective reviews of the Bank's performance, and that, when taxpayer money is at risk, the Chancellor should be given the power to take over control for regulation.

Another amendment, from the Labour peer Lord McFall, proposes that the Treasury Committee should have a role in the appointment and dismissal of the Bank's Governor. Currently, the post is appointed by the Treasury for up to two five-year terms.

"No explanation has been given for the rush to produce the Bill and place it on the Statute Book by the end of the year," Mr Tyrie said. "Better to take a little more time, and get it right."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Client Services Manager - Relationship Management - London

£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Credit Controller / Customer Service

£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

Guru Careers: In-House / Internal Recruiter

£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Day In a Page

Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project