Banking (Special Provisions) Bill

The bank will operate at arm’s length on issues such as the detail of interest rates and repossession policy. I am recommending that the Government give a general instruction to Ron Sandler to look closely at the existing rates and other practices of Northern Rock that were and are reckless. I am not suggesting that the Chancellor sits down with his calculator and tries to work out exactly what every individual interest rate should be. Our attitude towards the Bill and the amendments before your Lordships’ House in general is that although we have supported and do support nationalisation, and despite the tight timetable, this House should exercise its normal function in submitting the Bill to detailed scrutiny and in making amendments where they are required. The Government have set aside the princely time of an hour in the House of Commons tomorrow to consider amendments from your Lordships’ House, so they clearly contemplate that there may be some. Indeed, I suspect that, unless the Government make quite a number of concessions, that will be the case. Broadly speaking, we have either tabled amendments or will be supporting amendments tabled by the Conservatives that seek to strengthen the accountability of the Government and Northern Rock, as appropriate, to Parliament. Our amendments call for an immediate independent audit of Northern Rock so that we can get greater clarity of what we are taking on. We propose a regular report to Parliament on the progress that Northern Rock makes against its business plan. We are seeking an explicit provision that Northern Rock—and, indeed, any bank or building society covered by the Bill—should be managed in a prudent manner. We hope that other noble Lords will support these amendments. We also propose to support Conservative amendments that require the Treasury to lay before Parliament, in effect, the business plan of Northern Rock to bring it within the scope of the freedom of information legislation. We will also support amendments that require the OFT to report to Parliament on whether Northern Rock is operating in a competitive manner. On the questions raised by the Delegated Powers and Regulatory Reform Committee, our initial view was that we would support the Government on the negative resolution procedure. However, having had a quick look at that view, I think that the basis on which the Government proposed it was not factually correct, so we may need to revise our opinion on that. We contemplate supporting the Bill more in sorrow than in anger. We have been alarmed at some of the dealings of Northern Rock and the way in which the Government have attempted to introduce this legislation and some of its provisions. Tomorrow we will table amendments and vote for them unless the Government, in their wisdom, accept them in advance of our needing to do so.