CANCELLATION RULES (Hansard, 12 June 1986)

Mr. Deputy Speaker
With this it will be convenient to consider Government amendment No. 78.

§ Mr. Cash
I have had a communication from the Committee of London and Scottish Bankers with regard to the proposals contained in these amendments, with particular respect to the question of clients' money. Clause 50 provides for the Secretary of State to make regulations with regard to clients' money. It is a matter upon which the committee has written to the Minister in the past and I would particularly like to hear what he has to say because the banks feel that they will be placed in an invidious position if clause 50 is enacted without amendment.
594 The banks' difficulties arise from the uncertain state of the law in relation to the operation of trust accounts, including clients' accounts. I believe that there are many complicated legal matters which arise in that context, which I do not think it would be helpful to go into. I believe that at this stage the Minister is in full possession of the facts and, if he is not, I am sure that during the course of the proceedings in another place this matter could be looked into and a suitable opportunity taken to put things right.
The banks are seriously concerned that the bank holding the clients' account in an authorised firm could be held liable if the firm does not conduct the account in accordance with the rules, and losses result to its clients.
The banks seek statutory protection on the same lines as they already enjoy in respect of solicitors' clients' accounts. I understand that, although a letter has been written to the Department in respect of this matter, the Department has not yet replied. The indications are that the answer will be in the negative. I understand that if the Department does not produce a satisfactory outcome to this question, it is highly probable—indeed certain—that the committee will press the matter vigorously in another place.

§ Mr. Howard
I have heard with great interest what my hon. Friend the Member for Stafford (Mr. Cash) has said on this matter. The representations to which he referred are being carefully considered. That is why no reply has yet been forthcoming from the Department to those who made the representations. Clearly, if the Department is persuaded by those representations, we shall introduce an amendment in another place. I understand the import of my hon. Friend's remarks to be that if we do not, others will, and we must look forward to the outcome of any debate in the other place with interest and expectation.