Clause 37
Finance Bill
4:30 pm
Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)
I cannot let the clause pass by without making some comments, which I know will be of particular interest to my hon. Friend the Member for Hammersmith and Fulham. The clause gives the Treasury the power to introduce by way of statutory instrument the reinstatement of tax advantages that would have been lost if holders of individual savings accounts in Northern Rock had taken out their money when the run on Northern Rock took place. Although it does not immediately leap out from the explanatory notes, it is clear from the regulations that the Minister kindly supplied last week that they relate to Northern Rock. Indeed, the press notice that was published last year made it clear that, after it was leaked that the Bank of England was acting as a lender of last resort to Northern Rock, a number of members of the public sought to withdraw their deposits from the bank because they felt that it was not a safe place to keep their cash. That triggered queues around the block, both literally and metaphorically, as many tried to withdraw their money over the internet.
Some of those customers held their money in cash ISAs. To lure back depositors and try to rebuild the retail deposit base of Northern Rock, the Minster announced that people who put their money back into the ISA with Northern Rock would have their tax relief reinstated. That also applied to people who redeposited their ISA money with other ISA providers, but as I understand it, the measure was particularly aimed at rebuilding the deposit base of Northern Rock. This debate is one of the rare occasions that we have for parliamentary scrutiny on what is happening with Northern Rock.