Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008

I thank the noble Viscount, Lord Eccles, for that question. As I explained, that is the amount paid over and above the amount covered by the FSCS—the guarantee of all retail deposits. In preparing the permanent replacement to the Banking (Special Provisions) Act, the Government have sought to refine and develop the powers in that Act. This has included extensive consultation with interested stakeholders. The new Banking Bill provides a package of permanent measures which we believe will be a significant improvement on those previously available to handle such a situation. In taking Bradford & Bingley into public ownership, we put in place a number of additional controls to ensure that taxpayers’ interests were protected. The Treasury has published on its website a shareholder framework document with Bradford & Bingley and I have laid a copy in the Library today. This framework document sets out an appropriate corporate governance structure for the day-to-day interactions between HM Treasury and the company and the people who will be managing the company. It sets out HM Treasury’s delegations to the company and where the Treasury’s approval is necessary to protect its interests in Bradford & Bingley. As announced by the Chancellor, there will be no compulsory redundancies, other than the job cuts previously announced, for the six months following 29 September. However, we are working closely with Yorkshire Forward and other agencies to handle that situation as effectively as possible. Bradford & Bingley is currently developing a business plan. I am in awe of the ability of the noble Viscount, Lord Eccles, to produce a business plan in seven days. I have some modest experience in business. However, the circumstances facing Bradford & Bingley are such that a few more days than seven are probably required to produce a viable business plan for the business going forward. Particular care will be required because the business plan will need to satisfy European Commission state aid requirements. A state aid restructuring notification will be submitted to the Commission for approval within six months of the grant of emergency state aid; that is, by March 2009. The noble Viscount, Lord Eccles, also referred to the establishment of UK Financial Investments under the chairmanship of Sir Philip Hampton, and the role that institution will play in overseeing the Government’s investment in Bradford & Bingley. I assure the noble Viscount that, from my perspective, the Government have no wish to manage banks or to have any more banks in their portfolio. However, the risks that we faced as a result of a collapse in confidence as a consequence of the global financial crisis were such that we clearly had to act in order to forestall further problems. Confidence is a fragile flower and if people believe that they cannot be confident in a UK deposit-taking institution, they will begin to query any other institution which they fear is at risk of not being able fully to honour its obligations. The noble Viscount, Lord Eccles, asked what we meant by temporary public ownership. The best answer I can give is, not in permanent public ownership; that is, we will, as our response to Bradford & Bingley’s business plan, and within the framework agreement that we are establishing between HMT and Bradford & Bingley, fully explore all opportunities to realise value from ownership. The noble Lord, Lord James of Blackheath, provided the House with a most informed explanation with smatterings of Shakespearean quotations and historic perspective. I am indebted, as, I am sure, are many others, to the noble Lord for his explanation of the background to consumer credit legislation. I was pleased to be reminded about the rule of 78s, which I had forgotten. He made important points and invited me to consider accounting and auditing issues. I assure him that I will do so. I may well invite him to join me for further discussion on those matters. I respect his considerable knowledge on such matters. I should like to clarify for the noble Lord, Lord Howard, that the existing structures for regulation, supervision and the operation of the tripartite arrangements remain intact. From my perspective, the tripartite structure is architecturally sound and robust. In the case of Bradford & Bingley, the opportunity for Government to be advised by both the Bank of England and the Financial Services Authority certainly proved effective. The noble Viscount, Lord Eccles, asked why the instrument was not signed. I hope that I may reply to him in writing on that as I am not fully advised on it. However, if this was an oversight, I apologise for those who failed to comply with the appropriate process. I hope that I have managed to cover the main points raised by noble Lords. If there are any that I have failed to cover, I will be more than happy to write with a full and complete explanation to those who have taken part in today’s debate. In the circumstances, I hope that the noble Viscount, Lord Eccles, will feel able to withdraw the Motion.