POWER TO GIVE DIRECTIONS IN CONNECTION WITH TERMINATION OF DEPOSITTAKING AUTHORITY (Hansard, 14 February 1979)

§ Mr. Denzil Davies
I beg to move amendment no. 3, in page 10, line 19, after 'depositors', insert 'whether'.

Mr. Deputy Speaker
With this we may take Government amendments nos. 4, 5 and 6.

§ Mr. Davies
All the amendments are basically similar.
Amendments nos. 3 and 4 are concerned with the words in the clause regarding the safeguarding of the assets of the institution. The Bank might wish to take steps under the clause which perhaps could be said not to be strictly for safeguarding the assets of the institution, but certainly would be in the interests of depositors, because the moneys deposited with the institution are the assets of the institution. On the other hand, the Bank may still want to take action in the interest of depositors. This prevents anyone taking the point that any action taken by the Bank was not strictly for safeguarding the assets of the institution, although it might very well be for the benefit of depositors. It is a small technical point.
Amendment no. 5 deals with the Bank's ability to issue directions in respect of both existing and new deposits. It gives the Bank a certain flexibility, because the Bank might be quite happy to allow existing term deposits to be rolled over but would not wish the institution concerned to be able to call or advertise for new deposits. As the Bill is drafted, there is some doubt about the flexibility of the Bank. Amendment no 5 deals with that point.
Amendment no. 6 deals with additional licences and also enables a distinction to be drawn, if necessary, between existing deposits and new deposits.

§ Mr. John Moore
I do not wish to cavil on the detail, but would not the Minister of State like to say a little more on that? Am I not right in thinking that amendments nos. 5 and 6 are a little more than technical amendments in the sense that they essentially extend the protection to 1209 potential as opposed to actual depositors? I am not denying it, as I think that it fits into the character and pattern of the debate in Committee, but to the extent that it is something of an extension I should have thought that the point required comment and confirmation.

§ Mr. Denzil Davies
It is more than just a technical amendment.

§ Mr. Ian Stewart
While my hon. Friend the Member for Croydon, Central (Mr. Moore) was on his feet, I was thinking about the implications of what the Minister said on amendment No. 5. As I understood it, he said that there might be a difference in attitude between existing deposits and the seeking of new ones. As the amendment is phrased, it appears to prohibit the institution from soliciting deposits, either generally or from persons who are not already depositors. Does that mean that the powers would enable the Bank to issue directions which would prohibit it from soliciting deposits only from persons who are not already depositors?

§ Mr. Denzil Davies
Yes.

§ Mr. Stewart
It would?

§ Mr. Denzil Davies
Under the amendment, the Bank could look at either existing depositors or new depositors and say that the institution could solicit deposits for rolling over existing deposits, but there might be instances where the Bank would not wish to allow it to get new deposits.