Banking (Special Provisions) Bill

Part of the debate – in the House of Lords at 3:45 pm on 21st February 2008.

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Photo of Lord Newby Lord Newby Spokesperson in the Lords, Treasury 3:45 pm, 21st February 2008

I find myself in an unusual situation regarding these amendments because I am not in complete agreement with my noble friend Lord Goodhart. On major issues in secondary legislation, I agree that one should as a general principle proceed by affirmative resolution. However, this is a very particular situation. One of the main arguments for going for an affirmative as opposed to negative resolution is to give Parliament time to think and to debate the issues. We have been thinking about and debating this issue for much longer this week than we ever would if we were simply considering secondary legislation introduced under the affirmative resolution procedure. Therefore, in the narrow case of Northern Rock, is there any advantage to Parliament, or to any of us as individuals, in having a debate on an affirmative resolution, which we could not amend, as opposed to the debates that we have been having this week? Is there or is there not an advantage for Northern Rock and for broader stability in resolving this matter very speedily indeed?

In this case, on balance and somewhat reluctantly, I accept the argument that a negative resolution which enables us to get to the end-point on Northern Rock at the earliest possible moment is desirable. Heaven knows, most of those who have spoken have said that one of the major arguments against the Government's handling of the case has been their dilatoriness rather than their moving too swiftly.

As for any future circumstance, the likelihood of finding ourselves needing to go through this procedure again during the operation of the Bill is very limited and very unlikely. As discussed earlier, it is useful to have this guarantee—as the noble Lord, Lord Desai, described it—on the statute book, but we do not expect to use it. The Minister talked about what happens if we find ourselves unexpectedly requiring to use it in the depths of August. August, incidentally, is a peculiarly unfortunate month. If you plotted the history of great British economic disasters against calendar months, there would be a huge peak in August. That is undoubtedly the case, and no doubt there is a PhD in it. If we find ourselves, in the first week of August or at any point in that month, with a bank or building society unexpectedly in real difficulties, there will be a significant advantage in being able to move quickly without recalling Parliament. For those reasons we support the Government on this group of amendments.