Banking (Special Provisions) Bill

My Lords, I rarely speak in the House. One reason is that, as the noble Lord, Lord Forsyth, pointed out, by the time one gets to speak, everybody has said everything that one was thinking of saying. I will make one simple point; I will certainly allow the noble Lord, Lord Desai, to go home early, because I shall not take up much of your Lordships’ time. Noble Lords will not be surprised that I am opposed to nationalisation and that I shall, therefore, vote against the Bill. When I read what the Government’s policy on Northern Rock would be, I asked myself a serious question. I have always been a huge fan of how the Labour Party recreated its image, changed its branding and got elected as a long-term Government. It struck me as interesting that the fundamental core in the rebranding was the dropping of Clause IV and the abandonment of nationalisation. It seemed odd that, all of a sudden, when confronted with a crisis, the new Labour Government’s answer should be, ““Let’s nationalise it””, albeit for a short time. When the Labour Party abandoned nationalisation, it said that nationalisation was an economic problem, not an economic solution. Yet the Government have suddenly decided that, after all, nationalisation is the solution, with the result that they are now rushing through a Bill giving Ministers the power to nationalise not just one high street bank but any bank. Is it, I ask myself, part of their grand economic strategy? Clearly not. Is it because they believe, like the Labour Party of old, that the public sector is better at running companies than the private sector? No, I believe that the Government have changed their view on that, although that is perhaps evident not tonight. Is it because this has been forced on them by the world banking crisis? Not as far as I can see, because, as far as I know, no other country is nationalising a bank. Nationalisation is not a policy that the Government believe in; it is not what they wanted and I do not believe that they think that it will work best. How on earth have we got to this situation? I can give a simple answer: through sheer incompetence. When the Northern Rock crisis broke last autumn, the Prime Minister was, as we all know, dithering and shilly-shallying over whether to call a general election. He did the same dithering and shilly-shallying over the future of Northern Rock. That was when the scales fell from the eyes not only of the Conservative Party, which for many years had been blinded by the glow of new Labour, but also of the public. The true nature of this Prime Minister is that he simply cannot take decisions until they are forced on him by events. That is the genesis of the Bill before your Lordships’ House. The Government, having struggled for months to avoid nationalisation, are now standing on their head and have the gall to say that a nationalised Northern Rock will be business as usual. What absolute nonsense. The Bill breaks all the rules of good government and good business. The Government say that they believe in openness, but what is their strategy as the 100 per cent shareholder for the bank? Hands on or hands off? Expansion or contraction? They do not know and so they cannot tell us. The Government preach accountability, but to whom will the nationalised Northern Rock be accountable? The answer, in theory, is to everyone, which, of course, in practice means to no one. Then there is the Prime Minister’s old friend prudence—thrown overboard as the taxpayer is saddled with potential liabilities of over £100 billion. What about fair competition? A bank with a government-guaranteed, copper-bottomed underwriting is bound to put other banks at a competitive disadvantage and to distort the market. If you think that the EU will stop that or that the Government can stop it as the shareholder, let me point out as a marketing man that most markets are driven by sentiment—how people feel about something is what leads them in making decisions. Everyone will know that this bank is underwritten and that will drive their decision-making process no matter what is said by the EU or by the Government as the shareholder. There is no discernible principle, no political philosophy, no vision and no clear objective underlying the Bill. It is an accident of a Bill introduced by an accident-prone Government who cannot control events and who, instead, are controlled by events. Every time the Government try to take a decision, they cannot. Whether on Northern Rock, non-domiciles or capital gains tax, each time they delayed and they dithered. These are the hallmarks of an incompetent Government simply living from day to day. No wonder people are asking, ““What is the point of this Government?””. Let me indulge myself by quoting a slogan that I coined some years ago: ““Labour isn’t working””. I urge your Lordships to vote against the Bill.