Banking (Special Provisions) Bill

My Lords, it is with deep regret that I rise to make my observations on the amendments that have been made to the Bill since it left your Lordships’ House just a few hours ago. It was clear during the debates at Report and Third Reading here that there was much about the Bill that we regretted we had not been able to change. It was unfortunate that we were unable to remove many of the provisions which the Government had shoehorned into what should have been a Bill with the sole purpose of nationalising Northern Rock. Some of the concessions that we were able to wring from the Government were also rather less than we might have hoped. There were long debates on the proper role of Parliament in the nationalisation of Northern Rock and of any other bank or building society that this Government might take it into their heads to nationalise within the next 12 months. We were, unfortunately, not as successful in persuading the Government as we would have liked. Although we are pleased that many of the orders will now be subject to proper parliamentary scrutiny, the most important powers in the Bill are left subject to no parliamentary scrutiny at all. However, when the Bill left this House there was much to be celebrated. Your Lordships had succeeded in establishing in Committee that the framework agreement between the Government and the management of Northern Rock will be laid before Parliament ““as rapidly as possible”” and that the Government will report, "““on the future strategic direction of Northern Rock regularly””." Although I would have preferred to see those commitments on the face of the Bill, they are nevertheless significant victories for transparency and will I hope encourage the Government to maintain a genuinely arm’s-length relationship with Northern Rock. We also won a notable concession from the Minister that the Office of Fair Trading will report annually on the competitive implications of Northern Rock’s business on the banking market. Of course, not all of our achievements in this House were conceded by the Government. We voted successfully three times, inserting useful provisions into the Bill, such as an independent audit and a statutory commitment on the watching brief for unfair competition, which we believe would have been absolutely feasible. But the most important vote was on freedom of information. The amendment was ably introduced by my noble friend Lord Hunt of Wirral, who whipped up the largest majority of the day and successfully ensured that Northern Rock would not enjoy an exemption from public scrutiny, but would instead be as open as any other government or public body, subject—as your Lordships made sure the Government knew—to an exemption for commercially sensitive information. I opened this speech with a statement of regret. Before I get carried away with my enthusiasm in remembering how successful this House was at improving the Bill, I must bring myself back to earth by considering the Motions before us. It is deeply regrettable that the Government have decided to reject out of hand every one of the votes that your Lordships won on the Bill. It is most regrettable in the case of their rejection of our attempts to insist on the applicability of the Freedom of Information Act. It might seem cruel to put the Minister through the ordeal of defending his party’s line on this matter again, but the Labour Government’s inconsistency on this matter beggars belief. Many of us remember the fine words of the Prime Minister as recently as 25 October 2007, in his speech grandly titled ““Speech on Liberty”” and published on the No. 10 website, where he stated quite clearly: "““Freedom of Information can be inconvenient, at times frustrating and indeed embarrassing for governments. But Freedom of Information is the right course because government belongs to the people, not the politicians””." I promise not to make a habit of saying this about the Prime Minister, but I agree with him. Very shortly Northern Rock will belong to the people, not the politicians, so freedom of information will also then be the right course here. The inconvenience, frustration and embarrassment that the Prime Minister sounded so willing to face last year have now resurfaced to inspire all the Government’s arguments against our amendment. We have heard from the Minister that Northern Rock would be put to some difficulty in resisting demands from its competitors to release commercially sensitive information. That this argument, originally suggested by the Prime Minister on Wednesday at Prime Minister’s Question Time, is still being peddled by the Government despite the comprehensive dismembering it received today, both in this House and in another place, says a lot about how much attention the Government pay to your Lordships and to parliamentary procedure. The alternative explanation is that, although Ministers are listening, they are so incapable of justifying the freedom of information exemption that they are resorting to ever more extreme arguments to avoid admitting defeat. This evening, the government Front Bench in another place even accused this amendment of being a wrecking amendment. That suggests that the Government are so scared of freedom of information that they would rather not go through with the nationalisation of Northern Rock at all than subject the running of it to public scrutiny. The Government practice of resorting to extreme arguments in the face of opposition has unfortunately been a feature of this Bill’s rapid progress through Parliament. Every time we have tried to impose a safeguard or to limit an unreasonable power, we have been told that we are threatening not only the nationalisation of Northern Rock but the entire stability of the United Kingdom financial sector. That we have managed to make what improvements and extract what concessions we have has been nothing short of a small miracle given the pressure of time that we, and particularly another place, have been put under. I can only congratulate noble Lords on showing the Government just how important proper scrutiny is and hope that we have given them reason to think again before they introduce such ill conceived provisions.