Queen’s recommendation signified.
I beg to move,
That, for the purposes of any Act resulting from the Banking Bill, it is expedient to authorise—
(1) the payment out of money provided by Parliament of any expenditure of the Secretary of State in respect of, or in connection with, giving financial assistance to or in respect of a bank or other financial institution, and
(2) the payment out of the Consolidated Fund, in urgent cases, of expenditure which would otherwise be paid under the Act out of money provided by Parliament.
As the House will be aware, provision for public expenditure in legislation can be considered only if a money resolution authorising a charge to public funds has been passed. Such a resolution was passed by this House at the end of the Second Reading debate on 14 October last year, in the usual way.
However, as the House will also know from amendments made to the Bill in another place, which we shall debate shortly, the Government found it necessary to have the Bill amended there to provide the necessary statutory cover for expenditure on a wider range of matters than had been thought necessary when the original money resolution was passed.
In particular, as I shall explain in more detail shortly, it was necessary to make provision for a number of schemes operated by Government Departments that had, as their object, the provision of support in these difficult times for bodies that are not banks or other financial institutions, as well as for banks and financial institutions themselves. We therefore require a new money resolution to approve this extension of the financial scope of the Bill before we consider the amendments that the other place has made.
The Minister introduced the money resolution as though it were merely a matter of course and something that should go through without much debate. However, the Bill changed significantly in the House of Lords, which widened the scope of financial assistance beyond what is to be given to banks or other financial institutions. Later, we will discuss the effect that those amendments could have on banks or other financial institutions, on the economy as a whole and on particular industries or sectors, and on actual or potential customers of banks or other financial institutions. Those are broad amendments. They cover a number of packages of aid announced by the Government in recent months. It is important to put on record the estimated cost of those packages, so that the House can understand the scale of the liability that the taxpayer could take on as a consequence of those amendments and the money resolution being agreed to this afternoon.
In the other place, it was said that the changes required to the Bill would give legislative cover for: the first bank bail-out; the equity and preference share investments in the Royal Bank of Scotland, as well as in Lloyds TSB and HBOS, now Lloyds Banking Group; the credit guarantee scheme; the asset-backed securities scheme proposed by Sir James Crosby in his report, which was presented to the Chancellor at the time of the pre-Budget report; the £50 billion asset purchase facility, a scheme that authorises the Bank of England to buy commercial papers; and the asset protection scheme, the details of which we still do not know, although it will ensure a portfolio of bank assets in return for a fee. There were reports at the weekend that there could be up to £400 billion-worth of eligible assets in that scheme.
We could add the schemes announced by the other Department that the Minister represents, the Department for Business, Enterprise and Regulatory Reform. They include: the £10 billion working capital scheme, set up to secure £20 billion of short-term bank lending to companies in the small and medium-sized enterprises sector; the £1.3 billion enterprise finance guarantee scheme; the £1.3 billion that is to be unlocked from the European Investment Bank as part of a package of aid to the motor industry; and £1 billion of direct lending to the motor industry. A large financial commitment is emerging as a consequence of the amendments made in the other place.
Is my hon. Friend of my view, which is that we might be talking about half a trillion—£500 billion—of loans and share capital purchases, and another £500 billion of money guaranteed? We could be talking about guarantees, loans and shares of £1 trillion, and all we get from the Minister is about three sentences.
Indeed; my right hon. Friend makes an important point. The scale of the financial intervention that could be authorised by the Bill is much greater than many people anticipated, even six months ago. It is important to make sure that there is proper scrutiny of it. I will not trespass on the subject of transparency, and the reporting measures on which the Government have conceded; we will talk about that later. There are significant amounts of money involved, and it is important that before we proceed to discussing the amendments, we put on record the amounts of money involved.
I was rather surprised at how quickly the Minister sat down; he did not give us an opportunity to question him. If we pass the measure today, will the funds that we are talking about be consolidated on to the Government’s balance sheet, as is required under international accounting standards?
My hon. Friend, a fellow chartered accountant, asks one of the questions that need to be addressed. As I understand it, there will be different accounting treatments for different types of schemes. Schemes that provide a guarantee will be a contingent liability, whereas in schemes in which we take on debt, that debt will be on the Government’s balance sheet. As a consequence of the Government’s majority shareholding in RBS, the Government have had to recognise a significant proportion of RBS’s liabilities on their balance sheet.
As has been noted, the Minister was swift to resume his seat, whereas my hon. Friend, presumably in a bid to whet our appetites for the debate, has already offered us a litany of statistics. I am all agog: I want to know whether my hon. Friend is advising us to vote against the money resolution.
My hon. Friend tempts me, but we have accepted elements of the banking bail-out package. We feel that parts of the package could have been made much more effective at an earlier stage. We welcome the Government’s working capital scheme, which was announced by Lord Mandelson, although it was a pale imitation of a policy that we proposed in November. So although elements of the package may cause controversy, there are elements on which the Government have followed our lead. The important thing is that we hold the Government to account on how the schemes are introduced and implemented. We will refer to ways in which we can do so in the debate on the first group of amendments.
It is difficult to speak of a backdrop in the first debate on a topic, but it is important that hon. Members who wish to participate in the debate on the Bill recognise the cost of the initiatives that the Government have taken already, the potential exposure that that brings to the taxpayer, and the need to ensure that taxpayers are fully aware of the liabilities that they are likely to bear. I, too, was surprised that the Minister was so quick to resume his seat. He announced in the House at least one of those packages, if not two, and I should have thought that he would be happy to talk about their merits and why they would be effective.
Will my hon. Friend give way?
I am conscious that other hon. Members wish to participate in the debate, but I shall give way to my hon. Friend.
A subject that I have been pursuing since at least 7 October is what is a proper measure of the percentage of gross domestic product represented by the debt—it is somewhat along the lines of the remarks made by my hon. Friend the Member for Wellingborough (Mr. Bone). My hon. Friend the Member for Fareham (Mr. Hoban) correctly referred to contingent liabilities as the proper criteria. However, surely the real criteria should be the financial obligations that are entered into. Nobody could seriously doubt that we are speaking of financial obligations, so whatever the measure that may be imposed by virtue of a theoretical definition, the fact is that the figures are up to £2 trillion to £2.5 trillion, as I said in the most recent debate. Does my hon. Friend agree that we need to work that out carefully so that we get a proper measure, not just a theoretical measure, of what is defined?
My hon. Friend makes an important point about trying to quantify the extent of the liabilities that the taxpayer is taking on. Dredging the recesses of my memory, I recall from my accountancy training that there are accounting standards that examine the extent to which a potential liability could crystallise and therefore how one should account for those liabilities. What is more likely to transpire should be provided for, and what is less likely to transpire should not be provided for.
Part of the challenge that we face is that one of the potentially largest elements of the package is the asset protection scheme, which will insure a portfolio of bank assets. Work is going on to try to quantify the extent of the package and what guarantees the Government will enter into with the banks, so we are yet to find out the true scope of the commitments that we are likely to enter into on behalf of the taxpayer in trying to resolve some of the issues associated with the banking crisis.
Building on the point that my hon. Friend the Member for Stone (Mr. Cash) was making—
It was not a thesis, but it was a very good point about contingent liabilities. Equity accounting rules say that if the Government own more than 50 per cent. of a bank or any institution, they should consolidate not just a portion—that is, 70 per cent. of the debt—but 100 per cent. of the debt. Does my hon. Friend agree that if we want transparency, the Government should consolidate 100 per cent. of the debt of anything that they own over 50 per cent.?
My hon. Friend, who has made a great study of the state of Government finances and their on and off-balance sheet liabilities, tempts me down a course which, if he does not mind, I shall not tread at this point. He makes an important point about the extent to which the Government may wish to recognise the liabilities. We are speaking of the liabilities of not just one bank. The Government have nationalised two banks—Northern Rock and Bradford & Bingley—so their liabilities will need to be taken into account as well. In the interests of transparency, we have heard nothing about the condition of Bradford & Bingley since it was nationalised at the end of September. That will be referred to later, in the debate on Lords amendment 83.
I give way to the hon. Member for Thurrock (Andrew Mackinlay).
I shall make a substantive speech.
I do not wish to get in the way of the hon. Gentleman’s making a substantive speech. It will be good to hear comments from Government Back Benchers, but I am sure that the hon. Gentleman will agree that there are significant sums of taxpayers’ money involved and it is right to have a proper debate about it not only now, but as the scale of the liabilities unfolds over the coming months. Not wishing to deprive other hon. Members of the opportunity to speak, I shall conclude my remarks there.
I am pleased to have caught your eye, Mr. Speaker. I am a bit bewildered and concerned that countless Members of Parliament from all political parties will be responding to letters and representations from constituents about the bonuses being paid to people who presided over the banks that have failed. That issue is fully within the footprint of the resolution, which involves Parliament authorising moneys to fulfil the intentions of the Banking Bill, which is designed to bail out and underwrite the banks.
It is inconsistent for us in this Parliament to agree this money resolution when the Prime Minister has failed to ensure that bonuses are not paid to people who have failed both the banks and the wider United Kingdom community. In my view, the money resolution should be contingent on an undertaking that the banks will not pay the bonuses or that the Government will enact legislation to ensure that those payments are not made. I find it bewildering that neither the Opposition spokesperson nor the Government Front Bencher has mentioned the big elephant in the room—that is, the bonuses being paid. At the same time, we are expected to vote this afternoon—
The money resolution does not involve a debate about bonuses. Perhaps the hon. Gentleman can raise that issue at some other point in the proceedings.
I fully accept what you say, Mr. Speaker.
Does the hon. Gentleman agree with me that the consequence of this money resolution is that the House has to supervise a big bank with a medium-sized country attached—a £2 trillion bank and a £1.5 trillion country? That is why the hon. Gentleman is in difficulties.
Maybe. We are being asked to authorise this expenditure by Parliament; it is Parliament’s historic role to make moneys available to the Government. I was inadequately trying to make the point that it would be wrong for me, on behalf of my constituents, to acquiesce, by my silence, in this authorisation of payment just when the Executive branch of the Government, these Ministers, are not ensuring that the rights and interests of our people are protected and promoted to the fullest extent; I am thinking about making sure that the bonuses are not paid to the failed bankers.
I conclude by saying that I am not prepared to let the motion go through without making it clear that it should be a condition of the resolution that the Prime Minister comes to the House to say something about the payments. I am not talking about setting up reviews; reviews that take months are no good—particularly if they are conducted by a man who received bonuses. Working-class people do not receive bonuses, and earlier we debated a Bill about rights to work. It is now time that Parliament exercised its right, and I am tempted to divide the House on the issue. I hope that the Whips are listening in their offices.
This morning, the Treasury Committee spent about three hours interviewing bank executives. Part of the reason for that was our incredulity at how they had made decisions based on information about very complex financial instruments, which we suggested they did not know enough about before they committed huge sums to buying various assets and lending money in a certain way. We suggested to them that perhaps they should have had better training and education so that they could have understood exactly what they were approving.
Now we find ourselves here this afternoon. The Minister has made a statement lasting two or three minutes and is asking us to approve something, although many of us have not got the foggiest idea what it is to fund.
It could well be bonuses. Some of it will be in actual cash, by way of loans; some of it will be by way of guarantees and indemnities; and some of it will be by way of stand-by facilities. However, we do not know what the estimated total exposure at any one time might be. We do not have much idea of what the underlying security might be. We have not been provided with a cash flow forecast to indicate what the peaks of this exposure might be. We do not appear to have any exit routes for how the money will be paid back, in what time scale it will be paid back, or whether it will ever be paid back. There seem to be no dates by when these facilities will no longer be available, how long they will be made available for, or what review periods will be undertaken to ensure that the cash flow forecast is on track, or not on track. Combining all that with the opaqueness of the Government’s own accounts as regards their off-balance sheet items and suchlike, we have no idea whatever of the total exposure that the Government are suggesting we should agree with taxpayers’ money.
To debate all that we have three quarters of an hour, most of which has now gone. We have to decide what could be an unbelievable amount of exposure. As the right hon. Member for Wokingham (Mr. Redwood) said, it could be £1 trillion; we just do not know. I cannot conceive how we could possibly approve it today without a significant amount of additional information so that we have at least some idea of what is involved. If somebody gets us in front of a Committee in a year or so and says, “When you approved it, did you understand what it was all about?”, we are going to look rather foolish.
I am almost tempted to suggest that it is worse than that. One of the component parts of this money resolution is the Government’s insurance for the banks’ excess bad debt, effectively covering the toxic debt, which is a moveable feast—it is completely open-ended. Is it not worse than the hon. Gentleman describes in the sense that debts, or loans, that are good at the moment can become bad as the recession worsens, making this a completely open-ended commitment to an unmeasurable liability?
I thank the hon. Gentleman for that. He is exactly right: it is worse than I was thinking. If we discussed it for another half an hour or hour, we might discover that it is even worse again.
Most money resolutions are relatively straightforward—I think we all accept that—but this is entirely different. We should not just pass it and get on to the Lords amendments, because it is fundamental to the whole question of our bailing out the banking system. Unless we fully understand what the exposures are, this House will not be doing its fundamental task of oversight.
I am following the hon. Gentleman’s remarks with care. Does he agree that there is a marked contrast with the situation in the United States of America, where not so many months ago the Treasury Secretary went on his knees in front of Congress to seek permission for that money?
There is a certain similarity, of course. Althouh I do not want the Minister here, or anybody else necessarily, on their knees, when they come to the Dispatch Box they should at least give us a much fuller understanding of exactly what we are being asked to do.
Is the hon. Gentleman aware that the Japanese bankers went on their knees to apologise for the mess they got the Japanese economy into?
They may have chopped their heads off as well—I do not know.
Perhaps the Minister will be able to explain exactly what he wants us to approve, what amounts and so on, because at the moment I, for one, am not very happy.
This is the biggest, most important and most dramatic money resolution I have ever seen in the House of Commons. It has taken 1,000 years to amass a debt that the Government put at around £550 billion. Under this money resolution and the associated actions that the Government might take, they might double the debt by making that amount of money available as loans and share capital to banks or put the same amount again at risk through their loan guarantee scheme. As my hon. Friends have indicated, if we consolidate on the general balance sheet, as we should, all the assets and liabilities of the banks that the Government are buying, we do not just double the debt but quadruple or even quintuple it when one takes into account the full size of RBS, Northern Rock and Bradford and Bingley—no others, we trust, but this is very open-ended and implies that there could be others.
The money resolution takes the form of two different assertions. First, we are invited to give the Secretary of State power to put out money provided by Parliament under these headings, and secondly, in urgent cases, to authorise payments to be made out of the Consolidated Fund. The Bill that backs up the money resolution contains even more wide-ranging powers relating to the central bank, enabling quite a lot of money to be generated by the bank through quantitative easing and the manoeuvres of its own balance sheets, so the process is literally open-ended. We have absolutely no idea how much is involved.
I was disappointed because I wanted to intervene on the Economic Secretary. He gave the impression of a Minister who was going to make a serious and sensible statement about this weighty issue, but he sat down as soon as he saw me trying to intervene and before he had mentioned a single figure. Call me old-fashioned, but if I were moving a money resolution in the House of Commons, even one for a modest sum of money, I would mention the sum involved and explain why I thought it would provide good value. We have a money resolution that could involve half a trillion or a trillion pounds. On a consolidated basis, if we take all the liabilities into account, it could be several trillion. We might think that it was worth giving a few numbers, or at least some kind of ceiling to suggest that the Government understand that we are talking about big banks in a relatively small country.
Does my right hon. Friend share my concern that the Government do not know the answer because they have not had the time to do their own due diligence on the exact amount of risk to which they are exposing the country and taxpayers? That is why we are now on our second bail-out, and my concern is that we may end up having a third two or three months down the road.
I quite agree. I do not know whether the figure of £37 billion is retrospective, or whether the Economic Secretary thinks it was voted for under some other provision. We know, however, that £37 billion of equity capital was put into banks just a few months ago. The money changed hands only comparatively recently because it took quite a long time to get the approvals and do the final detailed negotiation. In the case of RBS, we believe that £20 billion went in one week, and the following week it announced it had lost the lot and a bit more besides. Again, call me old-fashioned, but I do not feel I got a lot of value out of that £20 billion, and I wonder why the Government put it in in the way they did, why they did not ask a few questions about the future results before they chose a price to put in new share capital, or why they put in new share capital at all, instead of using guarantees and short-term cash loans, which would have been quite sufficient.
To give a sense of perspective about the size of the amounts involved and the speed with which figures can change, on 13 October the Chancellor of the Exchequer told us that the assessment made on the money going into the banks at that point was a cautious one—the FSA had made it on a cautious basis—so the amounts involved were rather larger than might otherwise have been the case. Three months later, on 19 January, RBS had to write off £28 billion, which is the largest amount ever written off by a company.
That is right, and some of us have urged the Government in the past to show a little more concern for the public money involved, to ask more questions and do a little of what is called due diligence in the private sector before committing such huge sums of money to get a better deal for the taxpayer, if they feel that they need to do such a deal at all.
I urge the Economic Secretary, when considering the money resolution, to ensure that next time—I fear that there will be a next time because the Government are looking at a second package of banking support measures—the Government at the very least try to find out the scope of the problem. They should ask what the next set of figures might be. They should take that into account before valuing any share capital or loan capital they intend to put into the bank, and they should understand that a medium-sized country with an annual turnover and national income of £1.5 trillion will find it difficult to stand behind all the London-based banks with their combined multi-trillion-pound balance sheets.
If the Government are not careful, they will undermine the credibility and the reputation of their own debt and public finance by linking themselves too strongly and closely to some large banks, three of which we know have been badly run and have committed themselves to big risks and to big bonus and other contingent payments for no good reason, which have landed the taxpayer with a very big bill owing to the Government’s policy.
I know that others wish to speak. It is a pity that we do not have a three-hour debate on the biggest sum of money ever voted on in the history of Parliament, but I do not want to detract from colleagues’ time. I have made my main points: the Government should show more care, they should provide us with some numbers and they should understand that the total sum involved is too big.
My right hon. Friend the Member for Wokingham (Mr. Redwood) said, “Call me old-fashioned”. I am old-fashioned, as I believe most Members probably are, in the sense that I believe it is not unreasonable to want to know what liabilities one is entering into, or leastways to hear figures suggesting what those liabilities might be. “Due diligence” is a phrase that echoes through almost every transaction in the commercial world.
One problem is that due diligence did not happen in the commercial world when it came to our banks. The lesson for the Government is that they need to be much more wary when dealing with the banks.
That is a very fair correction. Of course we all accept the need for due diligence from those who serve us, professionally and otherwise, in the commissioning and undertaking of the tasks ascribed to them.
This country is clearly frightened. What is happening is without precedent in living memory. Unemployment is growing at an alarming rate, and we are watching companies fold. We know that the liquidity of banks lies behind that. We have already had what I believe was a 90-minute debate on a resolution to make available £40 billion and a further £200 billion. The House has been marginalised in the undertaking of its most fundamental duty, which is the supply of money. We do not know how much we are to supply on this occasion.
I go along with my right hon. Friend the Member for Wokingham in saying that the motion is open-ended, and I am surprised he believes that the Government will even need to return to the House with another such motion. It is pretty comprehensive, yet we know nothing of the figures. The hon. Member for Thurrock (Andrew Mackinlay) asked why we are approving the sums that we are, because they must give bankrupt banks the ability to pay bonuses they would otherwise not be able to pay. Last Thursday, the Financial Times set out the Obama programme for convincing the public why the measures being sought through Congress, which will sit at weekends if necessary to discuss them, should apply to the banks. That programme rests on a condition similar to the one that the hon. Gentleman set out.
Yet this Government have set as their condition the holding of an investigation, which will dribble on until the end of time. How can people be confident that the Government know what they are doing, are on the side of the people and can countenance the payment of such sums? Where in their scheme is correction provided for? The Minister must say more about that. It cannot be reasonable to assume that the House will dance to a tune that it does not even understand. The resolution opens our imaginations to the thought that the Government are as lost as all of us. In fact, they are more lost, as they cannot put a sum on anything.
Does my hon. Friend accept that some of us would be very concerned if we did not put down a marker of protest about this? We would prefer to vote against the money resolution, even though we understand that certain undertakings may have been given.
I want to see Parliament at the centre of what this country decides in relation to the Executive. That has happened throughout our history, and we are elected to ask the Executive for certain informations. We have been hollowed out in the great debate that faces each of our constituents, and we have not even had proper debates on the Government’s economic conduct. They do not want to come to the House to discuss that; they just send a little message, a three-minute speech by the Minister explaining why it is essential that we should bounce along to their drumbeat.
No, no—I agree with my hon. Friend the Member for Stone (Mr. Cash) that we should oppose the motion so that the Government take seriously the intent of Parliament. Each one of us must justify such vast sums, which could bankrupt the nation. The bankruptcy of countries is not unknown in history. When one hears of money simply being thrown around, without ascertaining or establishing conditions, it makes one feel that the Government do not know what they are doing apart from pushing money into the economy somehow. We need to be more intelligent about the matter, and so do the Government.
The Executive are trying to achieve what all hon. Members want—the stabilisation of an economic crisis and beginning of life again. However, that should be done in partnership, so we should oppose the motion.
It is a great pleasure to follow my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd), who speaks with immense sense and with whom I entirely agree.
I had the great pleasure of attending every Committee sitting, where the Economic Secretary, who is also at the Dispatch Box today, would spend five, 10 or 15 minutes discussing some sentence in the Bill. However, when it comes to spending so much money that we do not even know the size of the sum, with the danger of bankrupting the British economy, we get a very short speech. I do not believe for one moment that that was by the Minister’s design—I think he was sat on from on high. The theory is, “Whatever happens, let’s not discuss the Bill but simply get it through quietly; let’s spend billions and billions of pounds, and nobody will notice.” I spoke in a debate in which we spent £42 billion in 90 minutes. The larger the amount of money, the less time we have to discuss it.
Does my hon. Friend share my concern that the Economic Secretary is mute on the matter because he does not know the figure?
I am grateful for the intervention because I intend to be brief to allow the Economic Secretary time to say at least something about the matter. Perhaps he has no idea about the figure, but he has got to do better. He must come to the Dispatch Box and explain the money resolution in greater detail, otherwise I will not support it. I know that that creates some difficulty for my hon. Friend the Member for Fareham (Mr. Hoban). He made many of the points that hon. Members of all parties have raised, but he wants to get the Bill through, as we all do. However, if we continue to allow the Government to railroad Parliament, they will be encouraged to do it again and again.
Will my hon. Friend take into account the fact that our presence here today to discuss the money resolution must be in accordance with the rules laid down in “Erskine May” and in Standing Orders? We are discussing a proposal for new or increased expenditure, which is not already covered by legislative authorisation. We are therefore in a de novo situation. My right hon. Friend the Member for Wokingham (Mr. Redwood), and my hon. Friends the Members for Aldridge-Brownhills (Mr. Shepherd), for Braintree (Mr. Newmark) and for Gosport (Sir Peter Viggers) have already shown that there is deep concern about the fact that the amount is new and increased, and, as my right hon. Friend the Member for Wokingham said, its implications are stupendous.
My hon. Friend speaks with great clarity and is, of course, correct. Time and again, the Executive have performed the same trick. They add things to Bills late in their passage. In this case, they are adding the most massive sum of money.
I realise that I am short of time if I want the Economic Secretary to speak again, and he must make it clear whether we are considering approving expenditure of not only billions but trillions. Will that be incorporated into the Government’s balance sheet? If so, we will be a little country run by a big bank. The Economic Secretary must be clear: will the money be consolidated or not?
The proposal that the Government have put before us is profoundly worrying. It would allow an unlimited amount of expenditure, by authorising
“the payment out of money provided by Parliament of any expenditure of the Secretary of State in respect of, or in connection with, giving financial assistance to or in respect of a bank or other financial institution”.
That is, in fact, a blank cheque.
In January, the Prime Minister expressed surprise and anger that the Royal Bank of Scotland had invested in derivatives—“invested” being a pejorative—and that it had become necessary to write off £2.5 billion of taxpayers’ money, which was irrecoverable from a Russian oligarch. What on earth are we doing surrendering taxpayers’ hard-earned money to a Russian? The Prime Minister expressed anger, but how much more angry should we be that he spent taxpayers’ money on that basis and that he then expressed surprise?
The only way ahead must surely be to tie down the Government, so that they are not so profligate in the expenditure of our money, and to reject the motion. Having said that, I was present when my hon. Friend the Member for Tatton (Mr. Osborne) gave an undertaking that the Bill would go through with our support in February, and on that basis I will not be voting against it.
With the leave of the House, I would like to respond to some of the points that have been raised in this debate, although I appreciate that this gives hon. Members an opportunity to range relatively widely over Government expenditure.
A number of the issues could have been raised in connection with the money resolution on 14 October, which was passed without debate. Indeed, hon. Members will be aware of the convention with regard to money resolutions. Like the hon. Member for Aldridge-Brownhills (Mr. Shepherd), I, too, am old-fashioned.
Will the Minister give way?
If the hon. Gentleman will let me reply first, I will then give way.
I am old-fashioned enough to believe that a money resolution is about providing the cover for expenditure. We are not debating or voting on the expenditure itself. That will happen through the normal process of supply estimates and votes where appropriate. There will be opportunities to discuss the expenditure that the Government are committed to, but we are asking for cover for expenditure, just as we do for other Bills in normal circumstances.
Will the Minister give way?
Let me make just a little more progress and answer some of the substantive points that have been made. Then I will give way to the hon. Gentleman.
The schemes covered by the resolution will be subject to the standard arrangements for parliamentary control and for the reporting of expenditure to Committees as appropriate. The Bill makes that happen and will also put in place additional requirements, in line with amendments made in the other place. Hon. Members will be aware that amendments made in the other place imposed a requirement on the Government to report on expenditure and liabilities made or assumed under the Bill. We have accepted the principle behind that amendment and we will debate it in due course, so there will be no lack of transparency on the Government’s part.
Does the Minister not understand his and my constituents’ bewilderment that we should be giving the banks a blank cheque, as other hon. Members have said? We understand the gravity of the situation but, at the same time, he and the Prime Minister are not insisting that bonuses should not be paid. I ask him again: will he cut away the nonsense about a review and say, “It shall not happen”?
I hear what my hon. Friend says. We all share the public outrage about bonuses that are rewards for failure. Let me say to him that it is not a blank cheque that we are asking people to support today; it is a money resolution that is prepared in the normal way. There will be scrutiny through estimates and votes in the normal way. It is also important to recognise that there are a number of measures in the Bill that are important to people and businesses in his constituency. That is why I hope he will not want to vote against the money resolution, because not passing it would prevent people and businesses in his constituency from receiving substantial support.
Will the Minister give way?
In a moment. I just want to address the point about contingent liabilities.
As hon. Members will be aware, Departments are required to note contingent liabilities in their annual resource accounts. In exceptional circumstances, this may be done confidentially to the Chairs of the Public Accounts Committee and departmental Select Committees. In a moment, I hope we will go on to discuss the transparency and reporting amendment that I have tabled in response to the amendment made in the Lords. It proposes six-monthly reporting requirements. We are not hiding away from wanting to report on our liabilities and the actions that we are taking on this matter; we want to get it right, but we also want to do whatever it takes to maintain stability and support for the economy in this difficult time.
I am pleased with the cross-party consensus that we have had during the passage of the Bill, and I ask hon. Members seriously to consider that there is a difference between a money resolution that provides cover for expenditure and a debate on the expenditure itself, which will be held in the normal way.
Will the Minister tell the House how much money we are talking about for this year and next, under this money resolution and the subsequent resolutions?
We have explained this, in our previous statements to the House on bank recapitalisation, and in our announcements on the asset purchase scheme. We also explained in detail the fact that we were providing £10 billion in contingent liabilities for supporting the working capital scheme, which will allow £20 billion of lending. However, we do not know what the exact figures will be because, in many cases, we are providing loan guarantees, and our final liabilities will depend on the ability of companies to get through the recession and on whether those guarantees are called. The sooner we act, and the sooner we can get more support to businesses, the more likely the businesses will be to survive at this time—
Three quarters of an hour having elapsed since the commencement of proceedings on the motion, the Speaker put the Question (Standing Order No. 52).
10 February 2009
The House divided:
Question accordingly agreed to.View Details
Banking Bill (Programme) (No. 4)
Motion made, and Question put forthwith (Standing Order No. 83A),
That the following provisions shall apply to the Banking Bill for the purpose of supplementing the Orders of 14 October 2008, 26 November 2008 and 17 December 2008 (Banking Bill (Programme), Banking Bill (Programme) (No. 2) and Banking Bill (Programme) (No. 3)):
Consideration of Lords Amendments
1. Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption at this day’s sitting.
2. The Lords Amendments shall be considered in the following order, namely Nos. 83, 1 to 82, 84 to 97.
3. Any further Message from the Lords may be considered forthwith without any Question being put.
4. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Mr. Blizzard.)
Question agreed to.