Banking (Special Provisions) Bill

I am grateful for the opportunity to contribute to the Third Reading debate. I had hoped to say something on Second Reading, but Pensions Bill Standing Committee duties took precedence. It is clear from much of the debate that I have heard that the Government's case for the nationalisation of Northern Rock and for the Bill lies in tatters. It has been cruelly exposed, not least by the exchange about the assets in Granite. We can win debates and arguments in the House and lose votes. I shall concentrate on the prospect that despite the shortcomings of the Government's position, by Friday Northern Rock will be in public ownership. What does that mean? There are differences of principle across the Chamber among the region's MPs, who include some of my best friends in this place. We have a difference of principle, but an agreement that Northern Rock is an extremely important financial institution in our region. We are all concerned about the jobs of the people who work for Northern Rock, particularly in the north-east. The fact that the Government have been unable to produce any kind of business plan at this point in the proceedings, after all this time, suggests that there may be some false hope about how many jobs may in the end be protected. In her Second Reading speech, the Chief Secretary said that Northern Rock would grant mortgages in future under public ownership with less virility than it did under the previous board. One hopes that that is true, but it suggests that Northern Rock will be open for business for mortgages. The majority of jobs in Newcastle and Sunderland are in the processing of mortgage applications, so unless Northern Rock is open for business for new mortgages, there will be massive redundancies. That is a fact of life. In addition, we are not clear where the money will come from to lend to new borrowers. Will it come from new deposits? If it does, what impact will that have on the deposit-taking market which, as I pointed out to the Chancellor in an intervention earlier, includes the sale of Government gilts? If that went on for any length of time, it could undermine the deposit-taking market as we know it in this country. I do not know whether that will be the case or not. Without a business plan or any strategic idea about the direction in which Ron Sandler will take a publicly owned Northern Rock, we can have no view on the prospects for jobs of Northern Rock employees or the likely impact of the new publicly owned bank on competition in the banking sector, both in deposit-taking and in lending. The House ought to have been given a much clearer indication about those matters before we were asked to give the Bill a Third Reading tonight. It is disgraceful that that was not done. The lack of preparation has become clear even in the exchanges across the Chamber in this Third Reading debate. One suspects that in the two days during which the Bill will be debated in the other place, those positions will become even more cruelly exposed. The one ray of hope concerns the people whom the Government have appointed to run the business. I know Mr. Ron Sandler very well; he headed up the Lloyd's reconstruction and renewal project, which was supported by the all-party group on insurance and financial services. I chair that group, and the hon. Member for Newcastle upon Tyne, Central (Jim Cousins) is one of my officers. We supported the project in the teeth of opposition from some of my hon. Friends, who had lost money at Lloyd's. Lloyd's was a basket case at that time; the proceedings that Mr. Sandler instituted not only saved it, but recreated it as one of the greatest insurance institutions in the world. It remains so today.