Banking (Special Provisions) Bill

This is called the Banking (Special Provisions) Bill, but it should really be called the Banking (Pig in a Poke) Bill. We do not know the price, or the cost, of the whole exercise. We do not know what we are buying into, or for how long. The demise of Northern Rock arose out of the sub-prime mortgage crisis in the United States. However, it happened specifically in this country because of the national situation here. Of course there was managerial excess, but it was the asset-based, overspend economic policies pursued by this Government, and the regulatory system instituted by the Government, which failed. We did not see queues of people in Paris, New York, Sydney or Beijing concerned about their deposits. We were in a unique situation. We have before us no clear business plan, either for our benefit or for that of the European Commission—it will have to wait another month—so we are being asked to sign a blank cheque. What on earth have Ministers been doing? Why did they not develop some sort of plan B over the past five months in case they had to go down the route of nationalisation, when such a huge sum of taxpayers' money is clearly at risk? Now we understand that the very details of how the bank will be faring are to be denied to us through an exemption from the Freedom of Information Act 2000. That is an absolute disgrace. The Chancellor has been tilting at City bonuses recently, yet a whole series of bankers and lawyers will be rejoicing at the opportunity that has now been presented to them. When will we know exactly when fees are being dispensed, and how much they will be? My hon. Friend the Member for Tatton (Mr. Osborne) has dealt with the crucial element in the Bill, which is the right being given to the Government to nationalise other financial institutions. The excuse for this has been hybridity. On a moment's reflection, however, does it not become clear that to keep the power to nationalise in reserve, even if for supposedly technical reasons, sends out a truly incredible message to the outside world? It is no wonder that the Chancellor finds it impossible to say the word ““nationalisation””. Now that depositors are fully protected by the state, will Northern Rock draw savings away from other financial institutions? How will the Financial Services Authority monitor this? The consequences for other financial institutions could be dire. What will they be able to do about it? We have come full circle because of the failure of the regulatory system. We have heard much about the arm's length relationship between the Government and the new management of Northern Rock, but that has come from a Prime Minister whose micro-management is famous. We leave the debate today with myriad questions about how Northern Rock will be run, and about what information will be made available to Parliament, when the situation is at present beyond opacity. Despite the dithering and delay, the fiscal excesses, the regulatory failure and the massive risk to the taxpayer, we can only hope that Ron Sandler and his team will salvage something of the impaired reputation of this country, which has been so brutally and incompetently tarnished by this Government.