Banking (Special Provisions) Bill

My Lords, I do not know whether I am the only one of your Lordships who came to this debate not only to participate but to learn a good deal about the situation, but I find that I now have more questions in my mind than I started with. I want to pick up on one or two points that have been raised and I apologise for any repetition. It is almost 50 years since I began an apprenticeship in the City, where a senior manager with a lot of experience took me aside to give me a little private tuition in what he described as the main principles of good banking. The one that sticks in my mind most clearly went as follows: ““Borrowing short but lending long, don’t be surprised if it all goes wrong””. In the intervening 49 years, it has quite often gone wrong, but never in remotely such a cataclysmic and spectacular way as in the case of Northern Rock, which is an object lesson in the perils of dodgy funding. We have to see what lessons we can draw from the experience that Northern Rock and the whole marketplace have gone through. I wanted to know what the taxpayer has actually bought, or is about to buy. I asked the Minister yesterday whether he could enlighten us but, having listened to the discussion about whether Granite is or is not part of the Northern Rock corporate group, I am completely unsure what I think about any assurance given on the value of its assets. I am sure that the Minister spoke in good faith, but it was not clear. If he would like to clarify that when winding up, it would benefit many of us. The next point has also been made, but I must emphasise it. Why the haste? We are dealing with important legislation at very short notice and with much of the documentation necessary to understand it still not in our hands. We do not know how the Government’s relationship with Northern Rock is to be carried out. We have had a delay of five months since the storm broke back in September and now we suddenly have the opposite—a mad rush to legislate before anyone has had time to understand the background or to read the documents produced. I may have missed a lot but it seems to me on reading through the documents that we are legislating for a very technical process and that such detailed processes are not best legislated for without time and consideration to see what we are actually providing for. It is no good to have letters distributed to us during the debate when other documents and memoranda have not appeared. That is a terrible way in which to treat this House. Quite apart from the need of the House to do its job properly, it is also necessary in our constitution for Parliament to have long enough to consider complicated legislation that will have a widespread effect on important parts of the economy. I want to revert briefly to the Lloyds TSB approach in September. It is difficult to understand what caused the Government to give Lloyds a brush-off. They have spent five months that they now justify as being necessary to explore all avenues of a private sector transaction, yet when there was one—and, on the information that has been given, it did not seem to have any impossible conditions—it does not seem to have been given the same sort of reception. It would be helpful if the Minister could tell us what made the Lloyds approach unacceptable. We have had some press speculation about it, but that is not enough, as by bringing in a major banking name that proposal could have avoided many of the practical problems of managing the Northern Rock business and greatly assisted in retaining the good reputation of the City and its supervision and regulation.