Clause 6 — Transfer of property, rights and liabilities

Part of Delegated Legislation – in the House of Commons at 7:45 pm on 21st February 2008.

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Photo of Yvette Cooper Yvette Cooper The Chief Secretary to the Treasury 7:45 pm, 21st February 2008

I thank the Lords for their consideration of the Bill, which has been brought forward in exceptional circumstances. As a result of the consideration by the Delegated Powers and Regulatory Reform Committee, the Government put forward in the Lords a series of amendments to change several orders so that they will be subject to the affirmative resolution procedure. We think that that is the right approach and we therefore accept those Lords amendments.

The Lords passed three amendments with which we wish to disagree and I shall take each in turn. Lords amendment No. 3 is on competition and the role of Office of Fair Trading and—as a result of the consideration both in the Lords and this place—we have had further discussions with the OFT. It may be helpful to inform the House about those discussions.

As we made clear in earlier debates, the Government recognise that we need to ensure that Northern Rock does not enjoy inappropriate or unfair advantages in competition with other banks and building societies. We need to ensure that we are operating in the interests of the taxpayer, but also that we have appropriate competition in the markets.

At EU level, we have been clear that we will need to ensure that the business plan satisfies the EU state aid rules and support for Northern Rock needs to be fully consistent with those guidelines. As we told the House on Second Reading, we will also hold discussions with the British Bankers Association, the Building Societies Association and the Council of Mortgage Lenders before final plans are submitted to the European Commission for state aid approval.

We agreed yesterday that the OFT will publish an annual report assessing any competitive implications of the public support for Northern Rock and, of course, the OFT also has the powers to step in at any time. The OFT is an effective watchdog, overseeing competitiveness in the UK markets. It has wide powers, including powers to investigate whether any market in the UK is distorted by unfair competition. It does not need specific new powers to report on the competitiveness of the banking market. Therefore, there is no need for Lords amendment No. 3, which would be an unnecessary duplication of the OFT's powers under the Competition Act 1998 and the Enterprise Act 2002, and the European Commission's powers under the EU treaties. The amendment is inappropriate and I hope that the House will disagree with it.