Clause 6 — Transfer of property, rights and liabilities

Part of Delegated Legislation – in the House of Commons at 8:15 pm on 21st February 2008.

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Photo of Philip Hammond Philip Hammond Shadow Chief Secretary to the Treasury 8:15 pm, 21st February 2008

I am going to make some progress because I do not want to do what the Chief Secretary did and take up all the remaining time.

Lords amendment No. 3 would include in the Bill a statutory role for the Office of Fair Trading, which would address a key concern in the City of London and the financial services industry about fairness and competition. The state aid rules are a constraint, but the Government have acknowledged that they are not in themselves a significant constraint. We have had a significant concession from the Government on that issue in the House of Lords, and I am grateful to the Chief Secretary for that. The Government made it clear during the debate in the House of Lords that Northern Rock will not be allowed to abuse its privileged position to act anti-competitively in the marketplace. That is a great victory for us, and for common sense. We would have preferred to see that clarification in the Bill, because when the chips are down and Granite needs topping up, there will be a great temptation to interpret this self-made and self-policed regime flexibly, but it is, none the less, something that we are pleased to acknowledge, and I thank the Chief Secretary for that.

Finally, the Government amendments to clause 13 represent a partial response to the concerns expressed by the Delegated Powers and Regulatory Reform Committee in the House of Lords, but they do not go nearly far enough. The negative resolution procedure is simply not satisfactory for the approval of orders made under this Bill. Where the purpose of the order is to transfer assets, it is no good us coming back to the order and negating it 30 or 40 days after it has come into effect and the damage has been done. The effect of using the negative procedure would be, in practice, to remove all effective parliamentary scrutiny from the process. It would allow the Government to make a transfer of assets by order that Parliament can do nothing about.

There is absolutely no need for the measure. The Government argued in the House of Lords that they may, in an emergency, need to transfer an asset urgently, but they do not need to act immediately in the case of Northern Rock. The shares are suspended and depositors still have access to their accounts. Life goes on. Mortgage holders are paying off their monthly payments and there is no risk to the system. We on the Conservative Benches maintain that this emergency legislation must relate precisely to the emergency situation—if we can call it that—of Northern Rock, not a wider, general purpose that the Government are seeking.

To fail fully to accept the DPRRC recommendations is, I understand, unprecedented without cross-party support. The DPRRC is not some partisan sniping party; it is a highly respected procedural Committee of the House of Lords. The Government's behaviour on the matter shows up as cynical, hollow rhetoric the Prime Minister's words back in June about respect for Parliament and the returning of powers to it.

The Government's rejection of proper scrutiny not only of the Bill, through their timetabling motion, but of Northern Rock, the company that we are buying, through their refusal to accept the amendments, and their steamrollering of order-making powers in the face of the recommendations of a respected independent Committee of the House of Lords speak volumes about this rotten, incompetent and arrogant Government. I urge my hon. Friends to vote against the Government motions in respect of Lords amendments Nos. 1 and 2, and to support the Lords in their decision.