Commentary on Sections Treasury support for banks Section 228: Consolidated Fund
504.Subsection (1) provides for any expenditure incurred by the Treasury in connection with the exercise of the powers in Parts 1 to 3 of this Act, by the Treasury or Secretary of State (with the consent of the Treasury) in connection with the giving of financial assistance to or in respect of banks or other financial institutions or in connection with the provision of financial assistance by the Treasury to the Bank of England to be paid from money provided by Parliament. Financial assistance includes giving guarantees or indemnities.
505.Subsection (2) makes clear that expenditure in respect of financial assistance in respect of banks or financial institutions falls within subsection (1)(b) where it is expected to facilitate the business of banks or financial institutions generally. But it does not matter if that is not the sole or principal expected effect of, or motive for, the assistance.
506.Subsection (3) provides that “financial assistance” has the meaning given by section 257 and that an order under that section may restrict or expand the effect of subsection (2).
507.Subsection (4) makes it clear that the section has effect in relation to expenditure incurred before or after Royal Assent and expenditure incurred in pursuance of obligations entered into before or after Royal Assent.
508.Subsection (5) provides for expenditure referred to in subsection (1) to be met directly from the Consolidated Fund where the Treasury are satisfied that the expenditure is too urgent for the money to be provided by Parliament pursuant to an Appropriation Act or Consolidated Fund Act.
509.Subsection (6) obliges the Treasury to lay a report before Parliament where it relies on subsection (5). The report must not identify the institution to or in respect of which the money is paid. Under subsection (7) a report may be delayed or dispensed with on public interest grounds.