Banking (Special Provisions) Bill

Part of the debate – in the House of Lords at 4:00 pm on 21st February 2008.

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Photo of Lord de Mauley Lord de Mauley Shadow Minister, Cabinet Office 4:00 pm, 21st February 2008

I am grateful for these government amendments but, as I have pointed out before, it is unprecedented for a Government to ignore a recommendation from the Delegated Powers and Regulatory Reform Committee. It is all the more worrying that the Government are resisting the control of transfer orders in Clauses 3, 4 and 6. Even the Minister gracefully admitted that he had some difficulty with that. Although we all understand the ability of the noble Lord, Lord Goodhart, to take sides, his report stands before us.

We have listened carefully to the Government's arguments for why these orders should remain under the negative procedure and remain unconvinced by them. The Government's defence of inadequate amendments is another part of their gradual admission of what the Bill is for.

The wider points have been fully covered today by many noble Lords but they are relevant to these amendments, so I hope your Lordships will forgive me if I highlight them one more time. We promised that the necessary emergency provisions for the nationalisation of Northern Rock would pass through Parliament by the end of this week and we have now considered the Bill for three consecutive days in both Houses. We on these Benches and our honourable friends down the other end are quite happy to consider it again tomorrow, if necessary, to fulfil that commitment. However, what we have rushed through Parliament has been something completely different. We would almost be justified in rejecting the Bill outright, so far is it from what we were expecting. I hope the Minister and his colleagues in another place will acknowledge that at no point have we threatened to do so, nor have we taken anything other than a genuinely constructive approach to the proceedings.

These proceedings have been successful in a rather sad way, in that they have finally teased out of the Government their admission that the Bill is not just about Northern Rock but about the whole of the next year, a year in which they are clearly anticipating yet more instability and more crises in the financial sector. I state again, as I stated last night, that it is right and proper that Parliament should be involved in any future decision to nationalise another financial institution. The Government's claim that they need to be able to instigate another nationalisation on the sly and the provisions that make that possible are far more damaging to the public confidence in our financial sector than any possible parliamentary involvement.

I accept that a normal affirmative resolution procedure may in some cases be too lengthy; however, the DPRRC has, in its customary thorough way, given a perfectly adequate alternative. We will be tabling amendments on Report to put the order-making powers in Clauses 3, 4 and 6 under the same sort of procedure as was implemented in the Northern Ireland Act 2000. That will allow the Chancellor, when he considers it expedient, immediately to make an order overriding the usual draft affirmative procedures, which would remain the default option.

The Minister will no doubt tell us that even this slight involvement of Parliament will make it impossible for the Government to effectively resolve a looming crisis. Is he also telling us that, if the Government had had the powers in the Bill last summer, Northern Rock would have been handled differently?

I have made my position clear. We will return to this issue on Report in the hope that the Government will finally acknowledge that either they are creating a man of straw in order to demand a big stick with which to beat it or they are cynically exploiting Northern Rock in order to grab exceptional powers on the sly.