Banking (Special Provisions) Bill

Perhaps I may respond to the noble Lord, Lord Eatwell. I happily agree with him that if we were dealing with the same circumstances, the same terms would apply to Northern Rock as applied to Johnson Matthey. But Johnson Matthey was being run down. It was not continuing to trade on a business as usual basis in the market. I would have thought that the noble Lord would have known that. I am sure that he would not want to give an incorrect impression in making that comparison. I very much support the amendment. Now that we have a change of Minister, perhaps I can ask him the question that his noble friend had begun to answer. This is a useful opportunity to do so. The noble Baroness, Lady Kingsmill, is not in her place, but yesterday she assured us that we had nothing to worry about because the European Union and the regulators would deal with these matters. If we can rely on the regulators to deal with these matters, why is it that Northern Rock is continuing to provide the very high deposit rates which my noble friend Lord Naseby referred to? It already has a competitive advantage, because the Government have guaranteed the deposits up to any limit. Were it not for the fact that we are parti pris, I would suggest to noble Lords that they should put their money into Northern Rock, because it has an absolute guarantee and it has a very high rate of interest. The Government should be worried about unfair competition, because they are competing with gilts—they are competing with the Government’s own gilt market. The Government are providing the same guarantee that applies to gilts. On gilts you can get something like 4.5 per cent, but go on to the Northern Rock website and you can sign up to an account for 6.5 per cent. The Government are competing unfairly not only with the market but with themselves. I do not want to talk for too long about this. However, could the Minister tell us what the European Union thinks about these competition issues? It has done nothing about what has happened so far. Can he help us with the criteria that will apply to the business plan? I also return to the question, which I still hope will be answered, of why the Government turned down the opportunity for Lloyds TSB to take on Northern Rock back in September. The noble Lord, Lord Davies of Oldham, gave me an answer in a previous debate; he said it was obvious that the Lloyds TSB offer had to be rejected because it would never have got past Europe. That offer was to borrow £30 billion over two years on commercial terms and for it to be a fall-back facility. That is considerably less damaging an anti-competitive provision than was being suggested by Branson or by any of the other bids. Can the Minister explain why Europe would not agree to that but is prepared to agree to this, which is a whole quantum leap of additional competitive threat to the existing private sector operators in the banking market? We need to have clarity on where the Government believe that the competition rules will apply and on what the European Union’s view is. In the absence of that clarity—which I do not expect to get even with a new Minister—the importance of this proposed new clause is paramount, and I very much support it.