Banking (Special Provisions) Bill

My Lords, the guarantees mean that Northern Rock will attract more depositors who are seeking security. But it is very unlikely that it will be able to sustain any uncompetitive rates to depositors in any long term. It is also true that our competition authorities, which have significant powers, will be able to give considerable scrutiny to this. Other banks also will be able to do this. Competition is not an issue that we need to worry about. I do not think that competition will be a serious problem. It is unfortunate that Northern Rock is no longer the competitor that it was, but it will not be anything like it was. It definitely will be a price follower; otherwise, the wrath of all will descend on it. I am sure that Ron Sandler will be only too aware of that and will have to operate in a sensible and conservative way. I should like to make a couple of further points. Lloyds TSB has come up over and over again. When I was at the Competition Commission, I refused to allow it to buy Abbey National, because that acquisition was deemed to be anti-competitive. If the same issue had come before me in relation to Northern Rock and mortgages, it would not surprise me if that had been found to be an uncompetitive merger as well because of the scale of the mortgage book of those organisations. I have no idea what the terms were or the reasons why that was turned down, but I think that it would, in itself, have been deemed to be an uncompetitive merger and probably would never have got past the regulatory authorities. I have a great deal of sympathy for the loyal employees who have had a significant degree of uncertainty over the past five months or more. Those people deserve our concern and our sympathy. However, there is one group of people for whom I have absolutely no sympathy whatever; that is, those shareholders who piled in in such numbers after the bank was so clearly in distress and who now are making what I hope are empty threats to sue. They would be advised to slink back quietly and not to make a great deal of fuss about this. On the whole, this regrettable situation has been handled with as much reasonableness as possible. If it had been dealt with any faster, there would have been a great deal of criticism of the speed with which it was all done. Five months is an entirely reasonable time to consider a merger or takeover by the possible candidates. Now, we will have to watch and see how it all works out, but for the moment, I am feeling reasonably optimistic.