Banking Reform

Baroness Kramer Excerpts

Monday 4th February 2013 Lords Chamber

[Lord Newby]

My Lords, I smile with amusement when the noble Lord accuses the Government of not taking this issue seriously. When his party was in his power, and we and I suggested to it and him that they do exactly that, we were told that it was irrelevant to the problems that we were facing and that we should definitely not do it. I will certainly not take any lessons from him about the importance of this issue.

As for whether the legislation should include reserve powers to implement full separation across the sector, this was put to the Governor of the Bank of England, who said that he did not want such reserve powers. More importantly, general reserve powers would give huge power outwith Parliament to tear up the provisions of the Bill as we envisage it, and fundamentally change some of the ways that we see it working. The Government think that if you got to the point where that was a possibility, or you wanted those powers, the appropriate way to do it would be to come back to Parliament, rather than leaving it to the regulator to exercise what would be very sweeping powers indeed.

[Baroness Kramer]

My Lords, I will not repeat the question on reserve powers. I have a feeling that this House will take it on if the Government do not.

May I ask a question about the competition aspects of the Chancellor’s speech? His comments were welcome but to be able to change from one bank to another when all those banks are essentially alike is not real choice. Will the Government look seriously at splitting up some of the major banks, especially those in which we have ownership? I have not read the Statement but can he comment on whether Chancellor or the legislation will allow the FPC to set the level of the leverage back-stop so that it could be higher than the rather modest levels proposed under Basel III?

Economy: Growth

Baroness Kramer Excerpts

Tuesday 29th January 2013 Lords Chamber

[Baroness Kramer]

My Lords, the Minister is going to be tired of being welcomed to his new role, but let me join with others there. I also want to congratulate him on sponsoring what is not an easy debate so early in his ministerial career. It speaks of leadership and this House, on all sides, likes and appreciates leadership. I also want to thank the House for its indulgence. After the first four speeches, I had to join the Parliamentary Commission on Banking Standards or it would not have been quorate. I think we can all agree that getting the banks into a stable financial situation is a priority. Everything else that we may do for growth in the economy will all be reasonably for naught if we cannot sort our banking structure out, so again I thank the House for that.

I was able to hear the first four speeches and was then in plenty of time to hear the noble Lord, Lord Desai. Those speeches were all a sort of tour de force with the combat of different schools of economic thought. I dare not trespass into that territory—that is not where my intellectual capacities are—but I found it fascinating and I suspect, like many people, that I concluded that is very hard to listen to abstract theory and come away with conclusions. I hope that the House will not mind if I try to be simpler and perhaps a little more practical.

I do not think you have to have a grasp of economic theory to recognise that the previous Labour Government hideously overspent from about 2004, ramping up public spending so that when the financial crisis hit in 2008, because of our spending and debt levels we had no resilience and no cushion to deal with that crisis. I do not think you have to come with a background in economic theory to recognise that the very laissez-faire attitude towards the banks essentially led to the booking of absolutely false profits by those institutions and ephemeral tax revenues, which were taken as a permanent tax stream by the Labour Government.

I do not think you have to have an economics background to recognise that over a longer time than the Labour period—over a generation—we allowed our economy to become unbalanced. The noble Lord, Lord Desai, described that exceedingly well. We became overly dependent on the financial services sector. We failed to make sure that vigour extended beyond the south-east and covered the rest of the country. In perhaps the cruellest rub of all, we neglected providing the kind of skills to our young people who were not going to take the academic route but needed vocational training and apprenticeships. They could have generated the kind of jobs and economic strength that would come from those skills. We chose to neglect all those things; that whole series of imbalances is now being tackled by this coalition. Taking that long-term view and taking on the challenge of dealing with these absolutely fundamental weaknesses in our economy strike me as being some of the most important measures that this coalition has taken.

I want to name check in some sense Vince Cable—he has not been mentioned, at least while I have been here—for bringing forward, fostering and pushing an industrial strategy, something which we have seriously neglected. He has finally provided sector-specific support to industries that can lead us into growth, whether they are pharmaceuticals, green industries or aviation, and the development of the domestic supply chain—an area that really had no focus in the past. There has been investment in innovation and R&D and there is now an absolute sea-change in capital allowances, to encourage investment in new technologies by business. There is action on finance to deal with absolute market failure, which even those changes that we are making will not address. That is, in the Green Investment Bank, the British business bank and very substantial increases in export guarantees.

When the noble Lord, Lord Deighton, spoke, what excited me the most about his extraordinary speech was his focus on doing and delivering. In that context, I would like to add something slightly different to this debate, because as a doer and deliverer I am going to ask him if he might be willing to think small. We have such a bent in this country for looking at the large—the large business, the grands projets and the big bank—while we neglect the heartland of our economy. SMEs as a sector, not just in the UK but overall in the EU, account for all of our new job creation. That is not just in tough times such as these; it has also been true in the years of prosperity. New start-ups and small businesses are absolutely key to our growth and we have an enviable range of SMEs in the UK. Some 20% of all the SMEs in the EU are in this country. I do not think that registers on the general consciousness.

I recognise that this Government have taken steps to strengthen small businesses, from tax breaks to investors through the EIS, regulatory preferences, new support through UKTI and Funding for Lending. However, let me suggest that it is not enough and it is not brought into a coherent strategy and programme. The problems of SMEs are incredibly granular. I listened yesterday to Xavier Rolet of the LSE talking about the problems of raising equity for SMEs, in large part because all the rules are a scaled-down version of those written for blue-chip companies, rather than being designed for the small players.

I am on the SME Select Committee on exports, where I hear about the problems of protecting intellectual property for small exporters, especially for SMEs that decide to try to export to the BRICs. Again and again, this House has heard the complaint that small companies and microcompanies cannot access credit from the traditional banks. We lack those networks that supply such credit in successful countries, such as the community development finance institutions in the USA and the Sparkassen in Germany. This list could go on for several pages; I suspect that in today’s debate many more issues concerning SMEs will have been raised.

There is no point in trying to tackle this as a piecemeal add-on to various different policies in different departments. I wish that the Government would consider having a dedicated team working across departments, going through obstacle by obstacle with the single mandate of releasing growth in our SME sector. Frankly, the big guys can take over themselves; this is where we can make change and with small companies, small changes make an immediate impact. We all know what the impact on jobs would be if SMEs which were planning to expand, perhaps to hire just one more person, did it six months earlier than they had originally planned. The gain that we can get, with its impact on growth, could be tremendous if we agree to focus.

I move into the area of the noble Lord, Lord Deighton, by referring to small infrastructure. I am very supportive of the big infrastructure projects such as HS2. There is a whole range of them. We have neglected infrastructure in this country; I would not argue with that. However, as many people have said, large infrastructure has a long lead time and I want to make a plea for small infrastructure projects. In the Local Government Finance Act 2012, the Government put in place the legal framework for tax increment financing though a structure known as TIF1. This would allow local authorities to receive part of the uplift in business rates resulting from new infrastructure and, on that promise, to obtain the financing to enable those projects to go ahead in the first place. A perfect arrangement, your Lordships might think, for transport links to enable a new industrial park or for an opportunity to finance key housing.

This is not the time to go through the details of the legislation but, in effect, what the Government did was to give with the one hand, by creating the framework for TIF1. They then took away all the potential by severely limiting the period during which local authorities could capture those business rate increases. The argument is about general accounting and the relationship with the Treasury, and whatever else, but given that we need growth this is absolute madness. Just about every local authority in the country will have a few good, but small, infrastructure projects that would stimulate economic development locally. We need those to be breaking ground and I urge the Government to go back and capture that low-hanging fruit of small, local infrastructure projects which could feed quickly into growth.

Lastly, on small lending, this House is well aware that we are quite unique in the developed world in having so much of our banking service dominated by five huge players, all of them so like each other that few individuals or businesses ever bother to move their accounts, despite high levels of dissatisfaction. Everyone recognises that competition for these banks is one of the best ways to challenge what became a tainted culture and a lack of focus on the customer. But while new, big players may have a role, I want to argue for change to include a network of small players. This means community banks, specialist small business banks, crowd funders, peer-to-peer lenders and credit unions—in other words, to have real variety and choice capable of meeting much wider needs than our banks currently meet.

A lot of the enabling legislation is now in place, but to take it from a possibility and a theory to reality, recognition, action and support from our Government and our regulators are needed. It makes for a messier world but, I would argue, a more stable, capable and honest one. That is the argument that I would like to put to the Minister. Of course he must act on large projects and, with infrastructure, they would be a large part of his plate. Will he look at the small and the quick? We need economic growth now, not in 10 or 15 years’ time. It seems to me that we have many quick wins of which we are not taking advantage.

Taxation: Tax Havens

Baroness Kramer Excerpts

Wednesday 9th January 2013 Lords Chamber

[Lord Newby]

My Lords, there has been a lot of activity to increase transparency in relation to the Channel Islands and the Isle of Man so that we can now request information about an individual’s tax affairs. A major change is that we are moving towards what is called an enhanced automatic tax information exchange, the first of which was signed with the Isle of Man. This means that every year we will automatically get details of the tax affairs of UK-based individuals with accounts in those countries. We will find out what payments have been made into bank accounts in those countries so that we can make sure that those people are paying adequate amounts of tax. That deals with individuals, however, whereas the Question of the noble Lord, Lord Dubs, deals more with corporates.

[Baroness Kramer]

My Lords, perhaps I may pick up on the Minister’s comment. On 1 January the Foreign Account Tax Compliance Act, commonly known as FATCA, came into force in the United States. This Act requires all foreign financial institutions—banks, credit unions, pension managers and insurance companies—to find out which of their clients are liable for US tax and to send details of their account balances and transactions to the US authorities. When can we have our own FATCA—and I do not mind if we call it FATCAT—in the UK?

[Lord Newby]

My Lords, we signed the first agreement based on the FATCA principles with the Isle of Man in December. What is very significant about that Act is that places such as the Cayman Islands will be required to provide automatic information directly to the US about US citizens. We are now in negotiations with all Crown dependencies and overseas territories to see whether we can put in place equivalent provisions with them. If we do, it will revolutionise the amount of information that we get about the affairs of British citizens who are due to pay tax here and who have bank accounts in those territories.

Economy: Effect of US “Fiscal Cliff” Solution

Baroness Kramer Excerpts

Tuesday 8th January 2013 Lords Chamber

[Lord Newby]

I think the noble Lord slightly overstates it. The fiscal cliff—elegant or inelegant—has been avoided and the expectations and the forecast for the US are that it will see relatively modest, but substantive, growth in 2013. As the noble Lord will know, the latest employment figures in the US suggest that there has been a significant addition to the number of people employed. Therefore, the chances of the kind of meltdown in the US economy that he is worried about look extraordinarily remote.

[Baroness Kramer]

My Lords, the US faces an even worse fiscal cliff in seven weeks. As the British Government are unlikely to have much impact on Republicans infused by the Tea Party, I suggest that it would be a better strategy for this Government to put their efforts into getting formal negotiations on EU/US trade in order to take away the technical barriers that the US is using at the moment to limit UK exports in pharmaceuticals, medical services and advanced electronics. That might be a more positive way forward.

[Lord Newby]

My Lords, I completely agree with the noble Baroness. That is why the Prime Minister has set promoting a US/EU trade agreement as one of his top priorities for the G8, as well as moving forward on other trade agreements, such as that with Canada, which are already a long way down the pipeline.

Taxation: Avoidance

Baroness Kramer Excerpts

Tuesday 11th December 2012 Lords Chamber

[Lord Naseby]

My Lords—

[Baroness Kramer]

My Lords—

[Noble Lords]

Order!

--- Later in debate ---

[Lord Newby]

We need a greater degree of international agreement and that is why, along with France and Germany, we have just contributed an extra €150,000 to the OECD’s work to change the basis of accounting. We can do only a certain amount ourselves. It would be a counsel of despair to say that we cannot change the rules; the rules exist and can be changed.

[Baroness Kramer]

My Lords, I am glad that the Government are ending Labour’s indulgence to business on tax issues but, like many others here, I would like to play a part with my purchasing power. Is there a way we can find out who the good guys are so that we do not have to use the likes of Amazon, Google and Starbucks and can transfer our business elsewhere?

[Lord Newby]

The Government have yet to establish a good guys’ website but it is an extremely good idea. In the mean time, I suspect that the noble Baroness will just have to read the newspapers.

United States Budget: Economic Impact

Baroness Kramer Excerpts

Monday 10th December 2012 Lords Chamber

[Lord Newby]

Earlier this year, in relation to the US and UK economies, he said that,

“our objectives are common, which is we want to make sure that we have … governments that are lean, that are effective, that are efficient, that are providing opportunity to our people, that are properly paid for so that we’re not leaving it to the next generation”.

[Baroness Kramer]

I ask the Minister not to emulate the US fiscal cliff and to go for certainty in British fiscal and economic policy. However, does he not agree that British exporters should be careful not to overreact to either the fiscal cliff or the eurozone crisis? In the Autumn Statement, there was more than £1.5 billion in additional government support for exports; should not businesses both small and large be seizing those opportunities—and seizing them now?

[Lord Newby]

I absolutely agree. The challenge now is for exporters to continue exporting in markets where they already do that. For example, our exports to the US this year have increased by 4% and are therefore still exploiting existing markets. However, in addition, the key is getting more companies exporting to the newer markets. That is why the increases in exports to China, Brazil and India over the past two years have been so significant.

Banking: National Savings & Investments

Baroness Kramer Excerpts

Wednesday 5th December 2012 Lords Chamber

[Lord Peston]

My Lords—

[Baroness Kramer]

My Lords—

[Noble Lords]

This side!

[Lord Sassoon]

My Lords, there are 26 million savers with NS&I. We take their interests very seriously. They have over £100 billion invested. It is one of the largest savings organisations in the country, and that will continue.

[Baroness Kramer]

My Lords, I would like to challenge the Minister’s comments on NS&I. Funding for Lending is a taxpayer-driven programme which has created the collateral damage of allowing banks to cut the interest rate that they offer on savings products, and NS&I has had to follow by cutting its interest rates on savings products. At this time, when savers are under such pressure, could the Minister consider lifting the best-buy restriction so that NS&I could start leading the industry back into paying decent savings returns rather than following the industry on a downward spiral?

Financial Services Bill

Baroness Kramer Excerpts

Wednesday 5th December 2012 Lords Chamber

[Baroness Cohen of Pimlico]

I, too, am supporting a government amendment, though one that is not nearly as dramatic as that secured by my noble friend Lord Mitchell, whom I congratulate very much not only on doing it but on the thoroughness of his research. He actually took out a loan with one of these companies, an act of true heroism that I hope will not result in his being deluged with peculiar financial products for the rest of his life.

In welcoming this amendment, I remind the House once again that I am a non-executive director of the London Stock Exchange. I very much welcome the Government’s amendments to the powers of direction and the spirit of engagement that HM Treasury and the Bank have offered in dialogue on these matters, and which I know the industry will look to continue. The amendments provide useful further context for the use of the power. They put it mostly outside the scope of a day-to-day power, and reassure us that it will be used only when it is reasonably necessary to do so.

That said, it would be very helpful if the Minister were able to offer any further thinking on the circumstances in which it is envisaged that this power would be used, and took this opportunity to give us his vision for co-operation between HM Treasury, the FCA and the PRA in advising on the powers. All relevant authorities, particularly the Financial Conduct Authority as the market regulator, will need to consider the wider market impact of any proposed direction by the Bank.

Finally, the announcement that the Bank will be consulting on its supervisory approach before the end of the year is very good news. That will be an excellent opportunity for it to explain the intended circumstances under which the Section 296A power would be used, and more generally, I hope, to give an account of the Bank’s approach to capital requirements for clearing houses.

[Baroness Kramer]

My Lords, I rise with a question for clarification for the Minister. Is the net effect of this amendment to make it clear that the owners of the platform that is clearing derivatives—one of the central clearing platforms—are exposed only to the extent of the loss allocation that is defined in their membership agreement; and that, beyond that, the Government will not, in case of a failing platform, force other platforms to take on open, out-of-the-money contracts? If that is so, is the Minister in effect saying that the backstop for the collapse of an exchange is effectively the taxpayer? I ask that not in criticism, but for the sake of absolute clarity.

[Lord Fraser of Carmyllie]

My Lords, I declare an interest as a director of ICE Clear Europe, and I warmly welcome this extremely valuable amendment. It seems to go wider; noble Lords may think that it is a narrow amendment, but they have no idea what a sense of confidence it has given to the City at this time. I regard that as very important.

During the 1970s, we generally regarded the Foreign and Commonwealth Office as having the function of managing orderly retreat. Now we have absolute confidence that within the Treasury there is a very clear understanding that it will look after the best interests of the City of London and the pre-eminence of the City. It is a difficult task and I do not underestimate how important that is. The amendment is to be warmly welcomed. Noble Lords may think that it is minor, but it does a great deal more than simply to change the position of the clearing house and the direction.

I have one simple question, and I will not be worried in the least if the Minister slaps me down. Amendment 20 says,

“to accept a transfer of property, rights or liabilities of another clearing house”.

Does that refer only to a clearing house that still operates as a going concern? Frankly, I would regard that as unlikely. It is much more likely that the Bank of England would want to intervene at a point when it was in administration or in the process of liquidation. If I am told that that line encompasses all those particular circumstances, I will be more than happy to be told to shut up.

Autumn Statement

Baroness Kramer Excerpts

Wednesday 5th December 2012 Lords Chamber

[Baroness Kramer]

My Lords, this may be my only opportunity to pay tribute to My noble Friend Lord Sassoon before he steps down from the Front Bench, so let me do so. As any Minister, he will have expected fire from across the Chamber, but he has also had fire from over his right shoulder on occasion, and he has dealt with it extremely graciously. For many of us, the test of a Minister is how he and his team deal with Back-Benchers. Based on that test, he has been a superb Minister and we will miss him.

The Statement that the Chancellor presented to us today meets the test of being both tough and fair. It is remarkable that, despite the economic conditions that we face, the deficit is still reducing, which will have surprised many of the pundits but I am sure will have pleased this entire House.

As a Liberal Democrat I am most pleased about the decision by the Government to lift the threshold of the starting rate of tax one more time to £9,440. It was utterly unexpected. When this Government came in, that threshold was £6,475. To its credit, the coalition committed to raising it to £10,000. We are only half way through a Parliament, but it is at this point only £560 below its target. The impact is something like £600 more in the pocket of ordinary working people and more than 2 million people taken out of income tax altogether. In this time of economic stress, that is a phenomenal achievement. The Government should be congratulated.

I was pleased that the welfare cuts were well below those that were anticipated; I can see I am being asked to move to a question very quickly, so I will ask one in this way. Growth, as we all know, is now the holy grail that we attempt to achieve for this economy. Does the Minister agree that it now utterly depends on access to credit for the businesses that make up our economy? Will he commit to making sure, when he talks to his Treasury team, that the restructuring of the banks allows a new competitive environment with new entrants and new players that can deliver the kind of credit we need to the small businesses that are the backbone of our economy?

[Lord Sassoon]

My Lords, I am very grateful to my noble friend for her generous remarks and for her support since she has been her party’s spokesperson on the economy. The two parties are joined at the hip when it comes to the key economic work and all the other work of the Government. Importantly, she reminds us of a critical part of the Autumn Statement: raising the tax threshold to the benefit of 25 million people. That is very important.

On credit and access to credit, I draw the attention of the House and my noble friend to the comments of the OBR today. Its judgment is that the funding for lending scheme will lower rates for credit but increase availability. I very much share my noble friend’s concern to see a more competitive banking landscape emerge. In that context, it is interesting to note that the funding for lending facility is being taken up and having a disproportionate effect on some of the new challenger banks. I hope that that continues and that they continue to be able to increase their lending responsibly off the back of that scheme.

Financial Services Bill

Baroness Kramer Excerpts

Wednesday 28th November 2012 Lords Chamber

[Baroness Coussins]

My Lords, I add my support to the amendment introduced by the noble Lord, Lord Mitchell. I declare an interest as president of the Money Advice Trust, which is a charity that helps people across the UK to manage their debts. It does that by offering free advice through the National Debtline and by supporting advisers in the free advice sector.

So far this year, the National Debtline has taken more than 15,000 calls already from people struggling to repay payday loans. In the whole of 2011, it took 10,000 calls for help with payday loans, so that represents a staggering growth rate. Indeed, over the past two years, there has been an increase of 268% in the number of callers asking for help on payday loans. A telephone survey conducted by National Debtline also showed that the OFT guidance is not being followed, notably the part that states that creditors should make a reasonable assessment of whether a borrower can afford to meet repayments in a sustainable manner. The same survey showed that 66% of clients said that their lender had not conducted an affordability assessment.

This is not the right time to go into detail about what the FCA rules should be, but I suggest that they should certainly include a mandatory breathing space, with a freeze on interest and charges, if people are experiencing financial difficulty and have notified their payday lender that they are seeking support from a debt advice agency. In practice, by contrast, there is evidence of letters and requests to cancel CPAs or to freeze interest and charges being ignored, and debt advice agencies bypassed. The recent Citizens Advice conference highlighted examples where payday lenders had routinely refused to engage with advice agencies, had not answered letters, had refused to freeze charges and had not stopped CPAs even when requested to do so. I have sat in as an observer on calls to the National Debtline and witnessed the distress of people in debt as a result of payday loans. The powers for the FSA being sought by this amendment would be a small but very important contribution to the prevention of yet more unaffordable debt that ruins lives.

[Baroness Kramer]

My Lords, almost without exception this House has spoken and is speaking with one voice on this issue. In the United States it is quite common, when an important piece of legislation goes through, to name it after its sponsors. Whether this is the Mitchell-Sassoon amendment or the Sassoon-Mitchell amendment, it will have a very big impact on people’s lives.

However, it is important that the FCA, in the language that is already in the Bill, has the powers to do the acts for which the amendment calls. An amendment such as this ensures that the point is highlighted—that it is understood and not lost—because the FCA will have a wide range of areas to address. In the Bristol study that was commissioned and which we will be reporting in the next few weeks, the FCA and the Government demonstrated a very high level of concern around this issue, and the need to get underneath it to really understand the dynamics.

The importance of ensuring that the clause is an enabling one was well illustrated by the noble Baroness, Lady Coussins, a moment ago. There are many very complex issues around this that will need very direct attention. The devil will be in the detail to ensure that the amendment is effective in the way that the House desires, and that it does not create the opportunity for loopholes. We are talking about an industry that will game legislation if it has the opportunity.

I will pick up the issue that was addressed by the right reverend Prelate the Bishop of Durham, because it is hugely important. Almost all of this will be for naught if we do not ensure that there are appropriate sources of credit for those who need it at a reasonable price. The issue that the House is facing today has been neglected over decades; it is a challenge that the Government are picking up. It means that the clauses have to stand together with those that lower barriers to entry and which enable the community—whether social enterprises, charities, businesses, local authorities or whatever—to come together and take the initiative to build up the sources of finance that exist in many other countries.

The noble Lord, Lord Mitchell, talked about the constraints on payday lenders in the United States. One of the most powerful constraints is that there are community banks where individuals can get credit on reasonable terms. That is a far stronger constraint on any payday lenders in the United States than legislation could be. That is what we need here: the opportunity for market constraint. However, I congratulate all sides on coming together to be effective for some of the most vulnerable people in our community.

[Lord Kennedy of Southwark]

My Lords, I, too, congratulate my noble friend Lord Mitchell, the right reverend Prelate and other noble Lords for bringing forward this amendment today. I also pay tribute to the Member for Walthamstow in the other place, who has done more than anybody else to bring forward this issue. I would like clarification from the Government on the amendment that they will bring forward at Third Reading. Will it enable interest rates to be capped? That is key here; the cost of the charges and the interest rates levied are the nub of the issue. If that matter is not dealt with, we will unfortunately be back here at Third Reading and all sides will be very cross about it. Will the Minister clarify that?

--- Later in debate ---

[Lord Hodgson of Astley Abbotts]

The noble Baroness leapt to her feet very quickly. I know that the House is like a horse running for the stables, and I will not detain the House long. I support my noble friend’s amendment. As regards money-laundering and transferability, I would like to pick up a point made by the noble Lord, Lord Newby, in replying to the debate on 24 October, when he talked about the transferability of direct debits and how that works as regards the Payments Council initiative.

I am afraid that this again involves the charity sector. There is general agreement that there are far too many charities and that many ought to be closed down. There are many thousands of shell charities, which are the result of mergers. There has been a perfectly proper merger and there was no problem as the Charity Commission, the trustees and the lawyers were all happy with it. However, when you ask why this shell charity remains, it is because the banks will not accept the transfer of standing orders and direct debits to the new, enlarged charity. The charity then has to go through the process of asking every single direct debit and standing order signatory to re-sign. Administratively, that is an extremely complicated process and many of course decline to do so.

I am not asking my noble friend to reply tonight but I say this in the hope—it is probably a forlorn hope—that the Payments Council is listening to this debate and might therefore see whether it can find some way to enable this administrative inefficiency to be dealt with. That would enable some of these shell charities, which no longer need to exist and exist only to collect direct debits and standing orders, somehow to be subsumed into the new charity of which they are now a part.

[Baroness Kramer]

My Lords, I will intervene only for a moment but in case the Government are unable to meet the hopes of the noble Lord, Lord Flight, and others today perhaps I might say that I chair the sub-panel of the Parliamentary Commission on Banking Standards which is looking at competition in retail banking. Account portability is a significant part of that and the staff are now on the alert to take the report of the comments made today in Hansard and make sure that it and the amendments are put before the panel’s next meeting

[The Earl of Erroll]

My Lords, this is a very sensible amendment and it should be accepted. I also agree with the comments of the noble Lord, Lord Hodgson, that it ought to be applied to all accounts. We have had to leave some family accounts open just to receive some old shares and such things coming in because we cannot really get around to changing them. If we could change them at the bank end, it would make a lot of sense.