Banking (Special Provisions) Bill

The noble Lord will be the first to recognise that areas of the Freedom of Information Act do not obtain across parts of the public sector—I do not need to innumerate them because the House is well versed in the areas where the Freedom of Information Act does not apply and we are merely presenting the case that Northern Rock fits into such a category. He suggested that banks are exempt under Section 43 of the Act, but that is not an absolute exemption. In applying for an exemption, Northern Rock would need to balance the public interest in maintaining the exemption under Section 43 with the public interest in disclosure. Is a bank meant to be involved in this calculation of where it fits with regard to the Freedom of Information Act? Other banks do not have to, because it is automatic, but Northern Rock would have to make an assessment of what its obligations were in those terms. That would be difficult given the fact that we are seeking to ensure that this bank operates as far as possible like all other commercial banks. It has been suggested that, with its degree of public responsibility, this bank is in the same position as National Savings, but that is an executive agency of the Chancellor of the Exchequer. It is an entirely different body corporate. I want to emphasise that this bank is also meant to be in public ownership for a short period of time—a temporary concept. National Savings, whatever else it is, is not meant to be in existence on the basis of the short-term relationship with government. The arguments underpinning the amendment do not hold up against that background. They would do if the Government were, as the noble Lord, Lord Forsyth, continues to suggest, bent on excessive secrecy with regard to all these relationships. We are not. We are committed to the Freedom of Information Act. We are committed to the application of the Act where it benefits the public. But some areas are excluded and our case is that Northern Rock needs to be one of them. We want Northern Rock to run like other commercial banks: at arm's length from the Government. We want, as far as possible, business at Northern Rock to be on that basis. The bank will not perform a public function that would make it appropriate to apply the Act. This is not a matter to which the Government are determined to keep information confidential, because we enjoy the fact that the Freedom of Information Act will provide for the nation the necessary facts on the operation of Northern Rock. The Treasury, under its framework document, intends to develop effective plans for appropriate publication of reporting information on Northern Rock. That is the basis on which appropriate public scrutiny of Northern Rock can be made. The Treasury is governed by the Freedom of Information Act and will be obliged to make this information public. That is why I deny the concept that the noble Lord is putting forward: that somehow the Government are being excessively secretive about these arrangements. Maintaining commercial disciplines in Northern Rock and ensuring continuity of business are absolutely critical. If we are to maintain the prospect that this bank will be returned to the private sector as soon as possible, it is vital that we do not apply inappropriate public sector requirements which do not obtain to other commercial banks. The noble Lord, Lord Newby, was dismissive about commercial confidence, but there are good reasons why commercial banks have an exemption under the Freedom of Information Act. That was accepted by both Houses when it was debated. Commercial confidence is not a get-out phrase: it is a real issue with regard to the operation of the bank. I am not against the principle behind the amendment, but the amendment is unnecessary. The Treasury is a public authority subject to the Freedom of Information Act. The Treasury's relations with Northern Rock as shareholder and lender will be in the public domain. There will be opportunities on later amendments for me to dwell on this, but I have already mentioned the process by which the Treasury intends to make these relationships explicit and how it reports to both Houses of Parliament. As I indicated, that is what we intend to do with certain crucial formative aspects with regard to Northern Rock. The objectives of the Freedom of Information Act can be met by request to the Treasury about its relationship with Northern Rock. The Treasury would need to consider applications under the Freedom of Information Act in the normal way, including the application of exemptions. But the Treasury continually faces that position. The Treasury is part of a Government committed to open information, supported and promoted by the Freedom of Information Act. I am not saying that the noble Lord’s intention is not benign or helpful, but that the amendments are unnecessary because the Government intend to fulfil the requirements of openness in the proposals that we make.