Northern Rock and Banking Reform

That is an interesting question. It was remiss of me not to mention the hon. Gentleman, as he raised the matter in a question earlier today. Members of the Committee might disagree with me, and it might be too cynical, but my point is worth making. It might be the wrong answer, but like the hon. Gentleman I would welcome another answer. The big question is: what on earth happened? Why were no efforts made to bring other banks in? Why, when the Government had a buyer, were the discussions not exhausted? Why was there no record of the negotiations? Those are good questions, are they not? Before I leave the subject of the bank, another question arises on the subject of moral hazard, and leads to that of regulation. Moral hazard has a place in a philosophical discussion. It also has a place in the wider picture, but I prefer what Greenspan said. He said that he saw it as his job not to burst the bubble—although there are questions about that—but to help pick up the pieces. We were in a difficult situation: the bank's going down could have led to a domino effect. The Bank of England knew that, but sent a letter that was several pages long to the Treasury Committee to explain why it was not morally right to put liquidity into the market. A week later, that was done. If I were in the City, I would want security and confidence in people's judgement and I would want consistency, and I would be wondering what on earth was going wrong with the Bank of England I am just throwing that in. It is easy to take a lazy kick at the FSA, but the Bank has to answer questions, too. The hon. Member for Ludlow (Mr. Dunne) asked a question, and I shall respond. I would go to the tripartite arrangements and why they did not work. First, I support the assessment of the ex-chairman of the FSA, which he gave in a speech at Oxford. He said that considering the tripartite arrangement and how it worked, one should forget about structures and look at people. I thought that that was an interesting remark. Everybody in this Chamber, as a politician, knew what he was saying. It was a valuable but not well-reported comment. As everyone knows, it is possible to build a huge structure with huge organisations, but those organisations are only as good as the people inside them. If the people inside them are not working well, there is a difficulty. Let me be controversial. Attacks may be made on me from all sides, but as a cynical and hard-bitten politician I wonder whether the Bank of England saw this as something for which that upstart the FSA was responsible. It is well known that the Bank of England as an institution did not like either those powers being taken from it or the creation of the FSA.