Banking (Special Provisions) Bill

Part of the debate – in the House of Lords at 11:36 am on 21st February 2008.

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Photo of Lord de Mauley Lord de Mauley Shadow Minister, Cabinet Office 11:36 am, 21st February 2008

That is a different situation. It was not a nationalisation in the same way that this is.

As with Amendment No. 1, Amendment No. 2 seeks better answers than we have had so far on why the Government have drawn this Bill so widely. I understand that this Bill cannot be targeted solely at Northern Rock in order to avoid a hybrid procedure but surely the scope does not need to be extended this widely.

In the debates in another place on this amendment, the Liberal Democrats took the view that building societies should be included on the grounds that they should be on an equal footing with banks. I remind them that this Bill is not the banking reform Bill we expect to receive following the conclusion of the Government's current consultation. This is an emergency Bill to address the crisis surrounding Northern Rock. The merits of putting banks and building societies on an equal footing should be given a proper time for consultation and parliamentary scrutiny, and changes should be made via normal legislation. Proposals such as these should not be rushed through on the back of exceptional circumstances.

The debate in another place was also unusual for the Exchequer Secretary to the Treasury's response She, unusually among her colleagues—although the Minister made moves to join her in his winding-up speech last night—made it clear that these provisions were a precautionary measure; that they were not included to avoid hybridity; that they were instead powers that she could contemplate using. To that I can respond only with what I said to my previous amendment: I find it deeply disturbing that the Government can conceive of another crisis occurring within the financial system of a sufficient magnitude to trigger the provisions that allow another nationalisation, without considering it desirable for Parliament's approval to be sought for that step to be taken. I most sincerely hope that the Minister will think again about the wisdom of awarding the Government such extensive powers. I beg to move.