Banking (Special Provisions) Bill

The House is confronted this afternoon with a new and rather interesting situation. In front of the House is the question—in a sense, it has been there to be debated and thought about since last September—of what sort of bank this will be in the future. The reason why I have been very sceptical about nationalisation as an option is that the people who put forward the case for nationalisation, as I think the hon. Member for Twickenham (Dr. Cable) will be honest enough to acknowledge, clearly saw it as a transitional move—a more decent option than bankruptcy. They saw it as a kind of state-organised wind-down, with some of the less attractive features of bankruptcy removed. The nationalisation that has been offered to the House by Mr. Sandler in Newcastle over the last 24 hours and by my right hon. Friend the Chancellor in the House yesterday and today may prove to be a different beast. That prospect gives me some optimism about the outcome of the affair. The Conservative Front-Bench spokesman's policy was clearly to have a rapidly managed run-down of the bank; I think that that was the phrase he used—““managed run-down””. As I have discovered in the past couple of days, one has to check Hansard very carefully for the words that people use. Rapidly managed run-down is just about the worst possible outcome of the affair for the taxpayer, who will get less value out of the bank; for the jobs in Newcastle and in Durham, which will all be lost; and for the human resources that have been built up in the bank, which have proved quite remarkable and have sustained the difficult experiences of the past few months. Such action would fire into the markets at one of the most difficult moments to dump assets and to undermine savings. It is the worst possible course of action that we could adopt at this moment.