Banking (Special Provisions) Bill

Part of the debate – in the House of Lords at 12:00 pm on 21st February 2008.

Alert me about debates like this

Photo of Lord Trimble Lord Trimble Conservative 12:00 pm, 21st February 2008

One of the pleasures of debate in Committee is that, having looked at an amendment and having thought of a point that you wish to make, you listen to the discussion and further points arise. Listening to the discussion, a further point occurred to me. It is in response to the comments of my noble friend Lord Marlesford who referred to the special investment vehicle, Granite, on which some comments were made yesterday—indeed I made some comments myself—and in respect of which we received no reply. I appreciate the limited time that was available yesterday and the limited time we have to look into these matters. However, will the Minister, in the course of the discussion today, find a way of giving us more precise information about Granite and the other SIV which my noble friend has referred to? If there is another SIV similar to Granite, which has handled the commercial property—we saw from yesterday's technical note that Granite has half of the notional assets; or at least half of what were Northern Rock's assets have gone to Granite—and if another portion of those assets have gone off to Dolerite, I think this is a hugely important point with regard to the nature of the business. If he could find a way to say more about the nature of the SIVs—that may not be entirely relevant to the amendment—during the course of the day, we should all appreciate it.

The basic point that I want to make in support of the amendment moved by my noble friend is simple. With regard to it, I invite the Minister—and Members of the Committee—to leave to one side all of the technical matters that we know about and to try to put himself in the mind of the man on the street looking at this. There was a crisis five months ago. The Government stepped in, guaranteed the deposits, made an unprecedented amount of money available and said that they were going to proceed to try to find a private buyer. That would have reassured the public, who will have taken what the Government said at face value: that we now had a plan in position to try to find a private buyer. They would have heard a little about Branson and others, and various bids which the Government were considering. However, the process of considering those bids was suddenly brought to an end. We had been expecting that the consideration of those bids would take a few weeks more, but the process was suddenly brought to an end and legislation was introduced to be handled as if it were emergency legislation. If the Government had been proceeding according to the plan of considering the bids; if they had come to the view that the bids were not terribly good and that the only thing left was to proceed to nationalisation; and if everything was in order—if the deposits had been guaranteed and the money made available—and stable, there would be no need suddenly to abbreviate the bid procedure or to rush in emergency legislation.

The way in which the Government have acted in the past few days is bound to make people who are not fully informed and who do not have the background information that the Minister has concerned about whether there is some other problem. Ministers have also dropped hints that we need this legislation to deal with other problems that might arise. The noble Lord, Lord Desai, said that this is a matter of prudence and the noble Lord, Lord Eatwell, said that the whole structure of the industry has changed with regard to financing—I will not try to repeat the technical terms that he is familiar with and I am not; I quite accept what he said on this matter. All those comments will reinforce the feeling that people outside have—that there is something else involved; that there are other problems that the Government are concerned about.

There are obviously limits on what the Minister can say, but the Government need to address this issue and explain why we needed to proceed by an emergency procedure and why this has to be rushed through the House in a way that does not give Parliament the opportunity to consider it. The Prime Minister has famously said that he wishes to restore trust in politics and the effectiveness of Parliament, yet his actions point completely in the other direction. Something needs to be said. The man on the street may not be considering this in detail, but the way in which it has been handled is bound to increase the sense of unease and the sense that there are other crises waiting to happen and other matters about which the Government are seriously concerned. The Government need to address this.

The amendment gives the Government the opportunity to make it clear whether they are dealing simply with Northern Rock or with Northern Rock plus other matters about which they have concerns. I know that there is a delicacy involved, but the Minister needs to find ways to make clear precisely what this is about. The amendment focuses the legislation on Northern Rock, which the Government say is the objective of the legislation. If that is the objective of the legislation, let us have that made clear.