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House of Lords Hansard
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Banking (Special Provisions) Bill
21 February 2008
Volume 699

Report received.

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moved Amendment No. 1:

1: After Clause 7, Insert the following new Clause—

“Management schemeWhere an order is made under section 3 the Treasury shall, not later than the day that the order is made, lay before both Houses of Parliament a Minute setting out a scheme for the management of the authorised United Kingdom deposit-taker, including provisions setting out the strategic objectives for the business as determined by the Treasury and further provisions to ensure the independent day-to-day management of the business of the authorised deposit-taker to achieve these objectives.”

The noble Lord said: My Lords, when the amendment was discussed in Committee it was appropriately grouped with two Liberal Democrat amendments dealing with similar, but not identical, matters. Whereas the amendments of the noble Lord, Lord Newby, focused on the business plan that Northern Rock would follow, our amendment looked in addition at the framework agreement that would govern the relationship between the Treasury and the board of Northern Rock. I know the Minister addressed the matter to a certain extent during the debate, but whereas I was pleased to note his categorical assurance that the business plan would be published and laid before Parliament, I did not catch the same assurance for the framework agreement.

It is quite possible that the amendment is unnecessary and that he did indeed make that assurance. It is unfortunate that Hansard has been unable to keep up with the debates earlier today to the extent that I could check the on-line text before returning to the Chamber. Indeed, it is one of the many disadvantages of rushing legislation through in this manner that on entering the next procedural stage one has hardly the time to recover from the previous one, let alone fully assimilate what has or has not been conceded.

I would be grateful if the Minister could either repeat his assurance that along with the business plan the framework agreement will also shortly be laid before both Houses of Parliament; or, if he has no intention of doing so, perhaps he could explain to the House why he cannot do so? I beg to move.

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My Lords, I am grateful to the noble Lord for giving me this opportunity to return to this issue. The amendment rather sharpens up the perspective of the Opposition of what should be in the Bill. The idea that we would be able, at the same time as we were making the order, to produce the business plan in the way in which the noble Lord envisages—

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My Lords, I am asking about the framework agreement, not the business plan.

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My Lords, I am sorry. I misrepresented that point. The idea that we would be able, on the same day that we are making the order, to produce the framework agreement underestimates the nature of the emergency with which we would be likely to be confronted. The House will appreciate that, in this whole discussion on the amendments that were tabled this morning relating to this issue, we are talking about an emergency provision called into action in the direst circumstances. The noble Lord is suggesting that we can both make the order and have an agreed framework to present at that time. I accept entirely the point he is emphasising, that the framework agreement is important, and we have said that we will produce that agreement. However, the noble Lord’s amendment would give a very limited time for that framework agreement to be presented. I emphasise that we do not dispute the importance of the agreement being produced or of the agreement being subject to external public scrutiny and to parliamentary consideration in due course. To put it into the order as the amendment suggests, however, syncopates the process in such a way as to present an unrealistic demand upon a Government trying to respond to any such emergency provision.

I reassert what I said this morning in responding to these issues: we are seeking to get a framework agreement for Northern Rock in the very near future, and we intend to place copies in the House. I have made it abundantly clear that we regard the framework agreement as an important point for public consideration and we will present it before Parliament as soon as possible. But we would have the greatest difficulty in accepting what the noble Lord suggests, whereby any order would necessarily have the framework agreement involved with it and that agreement would have to be published—while disagreeing with neither the importance of the framework agreement nor the importance of laying such a framework agreement before Parliament as soon as possible and making it public. We intend to honour the commitment that I made earlier today. Although it may not have been made as assertively as the noble Lord would have wished, I welcome this opportunity of assuring him that that is what we intend to do.

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My Lords, I can hardly believe my ears.

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Order, my Lords. We are on Report. The Minister has responded.

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Keep going.

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My Lords, I understood that on Report it was perfectly in order to ask the Minister a question.

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My Lords, I can hardly believe my ears. The Minister has responded to this by indicating that this was an emergency procedure for an emergency. All along we have been told that this legislation was general but was related to Northern Rock. We have known about the circumstances of Northern Rock for some time—the Government have been negotiating for five months—so why do they have difficulty with this amendment, which would simply require the framework document to be laid before the House at the same time as the order was made? I would have thought that was perfectly reasonable. The argument that this is some kind of emergency procedure takes us way beyond what the Minister has been telling us at the earlier stages of the Bill.

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My Lords, the noble Lord is perfectly in order to ask me a question. I will do my best to answer him. I want him to accept that, in fact, there is no dispute at all between us and the Official Opposition and the amendment that is before us on the desirability of the framework agreement being made and being published as soon as possible. However, the noble Lord will recognise that the Official Opposition’s amendment gives a very specific tie to it in terms of the making of the order. I am maintaining, from the Government’s point of view, that that is an unrealistic demand, while at the same time I am giving the fullest assurance that if we are able to meet that kind of timetable, we will. But, should we fail on that timetable, we will produce the framework agreement as rapidly as we can. I cannot offer much more than that.

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My Lords, like this whole process, this is extremely disheartening. The order has clearly not been prepared since last Sunday. A framework agreement could, I suggest, have been prepared in the same timescale as the order. I came away from this particular debate in Committee feeling that we had made some progress, not only in gaining some clearer understanding of the Government’s intentions, but also in persuading the Government of the wisdom of involving your Lordships and other colleagues in another place more fully. We now discover that this is not the case. Instead of the assurance I was hoping for, I discover that the Government are still unable to be as open and transparent about their dealings with Northern Rock as they should be. While I will not press the amendment, I am afraid that this does nothing to reassure your Lordships or the public at large as to what the management arrangements will be. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15 [Orders and regulations: general]:

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moved Amendment No. 2:

2: Clause 15, Page 13, line 7, leave out “5” and insert “3, 4, 5, 6”

The noble Lord said: My Lords, I make no apologies for returning to this subject. I just want to make three points. The first is that our protest about the speed with which the Government are rushing these proceedings through is against the Government. I would just like to say how much we all appreciate the strenuous efforts of the staff of the House and all those involved in producing so quickly the documentation. It is quite remarkable that we have public servants of the quality we have and I am very grateful to them. If we criticise the speed, it is not in any way critical of those who have done such hard work; it is the speed with which the Government are trying to rush through procedures. My second point is that we have here a very important move by the Government to ignore the recommendations of the Delegated Powers and Regulatory Reform Committee. That is, as I understand it, the first time that the Government have decided to ignore such recommendations. When I press further on these amendments, it might be right for the Government to set out their policy on the committee.

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My Lords, I am sorry to say, in my capacity as chairman of the Delegated Powers Committee, that this is by no means the first occasion on which our recommendations have been rejected.

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My Lords, it is the first important occasion. It might be—when we are faced with such a key issue—that the Government might just indicate in a little more detail why they have taken this step. The recommendations of the committee, which have been very well set out in the report it produced so quickly, contained a number of really important recommendations. I would like to hear from the Government why they are refusing to accept them.

The third reason involves a question that has run through all of our debates; namely, why the rush? I can well understand the other place—it is used to being asked to omit the detailed debate that is necessary on legislative provisions. In my experience—I have been in this place only for just over 10 years—

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My Lords, I thought that that was going to be a counterbid.

I have been in this place for only 10 years but I cannot recall being placed under this sort of time pressure before. We are now rushing into the Report stage. Normally, one would have time to reflect on what the Minister had said. I might want to say, “I have heard what the Minister said but I may want to return to this at Third Reading”; that is perfectly possible under the rules and procedures in certain limited circumstances. How on earth will that be possible here?

I register the strongest possible protest about the way in which this House is being treated. The other place can make its own case on this but we should register, from all sides of the House, the view that the Government might perhaps think again before proceeding with this sort of haste. The shares are suspended in Northern Rock; there is time for careful scrutiny of whatever the Government are proposing. That is why I return to this amendment and Amendment No. 3. It is perfectly possible for us to adopt the procedure that was used under the provisions affecting Northern Ireland; that would give the Government all that they need. However, the Government have not—so far—accepted that.

Finally, today’s message to the public has been that the public and parliamentarians in both Houses are not really being given the information that they need. That goes considerably against all the democratic principles that I have been brought up with—that Governments have to explain what they are seeking to do. May we please now at last have a more detailed explanation of why the rush is necessary and why this amendment cannot be accepted? I beg to move.

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My Lords, I agree with the noble Lord’s final point. The House and the country still find several aspects of the situation facing Northern Rock pretty obscure. Despite what seems like many hours of discussion of Granite, we are not much clearer than we were when the issue first broke on to the scene.

For reasons that I gave less than two hours ago, I do not believe that any great purpose is served in this case by having affirmative resolutions. There are strong arguments for having negative resolutions. To make a general point that I have made many times in the past in your Lordships’ House, there is a bit of a myth about the affirmative resolution procedure and the degree of scrutiny that it allows. I have sat through many debates involving affirmative resolutions. They are short, desultory affairs because we know that we cannot amend the instrument; we know that we cannot throw out the instrument except in extreme circumstances. Affirmative resolutions do not give this House the power that is sometimes ascribed to them. That does not mean that in all circumstances we say that they make no difference but, in this case, and combined with the other arguments that I gave earlier, we cannot support the amendments.

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My Lords, I rise briefly to support my noble friend’s amendment. I hope that the noble Lord, Lord Newby, will permit me to make one observation: in so far as he shares our concern about the way in which Parliament is once more being ridden over by the Executive, I cannot help but point out that had his party been a little less reluctant to join in the dance, we might have had an opportunity for more careful scrutiny of the Bill.

In this respect, the Government are their own worst enemy. We have seen how this Government have progressively destroyed Cabinet government in our country and marginalised Cabinet Ministers, who discover from the newspapers what policy is. Now we are seeing the same thing happening to Parliament with this kind of roughshod procedure. It results, in the end, in Governments making mistakes and in weak government.

I am sure that because this House has not had a proper opportunity to scrutinise and consider the legislation and that there will be no proper opportunity to scrutinise the secondary legislation, the sweeping powers that are provided will result in the Government making mistakes that will damage them. It is no part of my brief to try to save the Government from themselves. Unfortunately, the taxpayers and the people of this country will pay the price.

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My Lords, I remind the House that we sat for 36 hours when there was urgency on the Prevention of Terrorism Bill and that this is not the first time that we have been made to sit for long hours. I am perfectly willing to sit for another 36 hours if that is what will satisfy the party opposite.

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My Lords, I would like to seriously support—I am sorry: I split an infinitive. I would very much like to support my noble friend on the question of the Government’s abuse of Parliament and all the rest of it. Time and again in the Criminal Justice and Immigration Bill, chunks of things have gone wrong. The House of Commons is guillotined, guillotined and guillotined—Robespierre would be proud. I remember when I was first here the row when Michael Foot introduced a fifth guillotine in one Session and it was considered to be appalling. This Government do not pay attention to Parliament and anything that we can do in this House to make them pay more attention and to listen to our tiresome and irritating voices—which is the point of Parliament—the more we should stick to our guns and do something about it.

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My Lords, I urge the noble Lord, Lord Newby, to reconsider the position that he stated a few moments ago. I speak with some hesitation having not been in this House for as long as he has, but I find myself amazed at his proposition. I understood his argument to be that we should not have an affirmative resolution because it did not give any serious opportunity for scrutiny. If that is his view, surely that must be a view of general application. If that is the view that he takes, he must surely take the view that there is no point ever having an affirmative resolution procedure in this House. I find that an astonishing proposition.

The noble Lord says that he does not think it is worth having an affirmative resolution procedure because you cannot amend the order. I agree that that is a serious defect in procedure. It would be a good thing if that defect was remedied and the opportunity was there to amend affirmative resolutions. But one surely cannot use that limitation in our procedure as a reason for throwing out affirmative resolutions as desirable things.

Furthermore, I remind the noble Lord that the conventions committee, in its consideration of this matter, recommended that this House should be prepared more often to use its power to reject affirmative resolution orders. The House has been properly cautious in approaching that matter, but who is to say that that caution will remain at its present level? I am sure that at some point in the future, cautiously no doubt, the recommendation of the conventions committee will be followed and that orders subject to affirmative resolutions will be rejected.

We should consider those factors plus the importance in this situation of ensuring that there is some debate. On a negative resolution, there is no debate. There is no doubt about the importance of this matter and ensuring that parliamentary accountability goes a little further than dropping a piece of paper on to the Table in front of us. A proper debate is surely desirable.

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My Lords, I am sorry to rise again, but I do not think that the noble Lord was here when I made my points earlier. The main one was in respect of Northern Rock. We have spent far more parliamentary time in detailed consideration of all aspects of the nationalisation of Northern Rock this week than we would have had regardless of whether there had been an affirmative or a negative resolution to consider. The argument for an affirmative resolution on Northern Rock, where urgency is of the essence, therefore does not hold as it would in normal circumstances. As for the generality, like the noble Lord, I agree that we should be able to amend affirmative resolutions. The view of the House ought to be that rejecting an affirmative resolution is anything but the nuclear option. Rejecting an affirmative resolution within your own party or more generally in the House is not seen as an acceptable way of proceeding except in the most extreme circumstances. I am very happy to join with the noble Lord on moving to a situation where it can be done more regularly. But I was talking about the situation and practices of the House with which we currently contend.

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My Lords, I will address the import of the amendment in a moment, although most of the arguments that I have against it I rather exhausted this morning; but first let me deal with some of these extraneous matters. The noble Lord, Lord Forsyth, seems to predicate that a Labour Government foreshadow the death of parliamentary democracy. The noble Earl, Lord Onslow, has one supreme advantage over many of us here in that if he was not here in 1971 someone connected with the family certainly was, and in 1971 the upper House permitted the Government to nationalise an important company in a single day. The outcome of that development, as was attested by the Opposition earlier, was regarded as wholly beneficial by the nation and enabled Rolls-Royce to succeed subsequently.

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My Lords, the Rolls-Royce (Purchase) Act 1971 was a single-paragraph Bill. Does the Minister not think that was a different situation from the one we are faced with today?

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My Lords, it might have been a single-paragraph Bill but the significance of that decision was such as to engage the nation in very great debate. The upper House at that time delivered within the space of 24 hours. I am therefore not going to receive lectures about it being a decline of parliamentary democracy to ask this House to consider this Bill which has emergency provisions within the timescale that we have put forward. As for the contentions put forward by the noble Lord, Lord Trimble, with regard to affirmative resolutions, that is easily said but there are issues with regard to this House being able to negative or even amend affirmative resolutions. That would represent quite a shift in the balance of power between the two Houses. That may well be broadly accepted, but let the noble Lord not think that that decision would apply to this House alone. Elected Members of the other House would look askance at the regular arrival of negative action against affirmative resolutions, and rightly so. Anyone would think that it is only a Labour Government who use such devices. I know it is a long time since noble Lords opposite have been in government but they are lively and have green and verdant memories and they can surely recall the fact that they have used these instruments many times and certainly would not have tolerated regular rejection by the Upper House at that stage. If they say, “We would not have anticipated rejection of our instruments in such circumstances”, then a real issue of democracy arises—that when one party is in power at the other end, certain conduct is acceptable in this place, but when another party is in power, a rather different strategy is pursued. I give way to the noble Earl.

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My Lords, I can assuage some of the noble Lord’s doubts about what will happen when there is a Conservative Government. I sincerely hope that this House would pose as many difficulties for a Conservative Government as it would for any other Government.

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Yes, my Lords; that has been the case, and I hope it will continue because I regard this House as a body that makes life difficult for all Governments, including my own.

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My Lords, I regret that the former Chief Whip is not sitting next to me because he would give me the document here and now showing the extent to which opposition to Labour measures in the upper House occurs now and the contrasting exceedingly lower levels of opposition during the previous Conservative Administration over the 18 years that they were in power. The noble Earl is a very good historian and, if he is fair, he will not challenge those statistics.

But enough of this banter; we are, after all, here to discuss immediate and serious issues. This issue before us in the amendment is a serious one. It derives also from the serious report of the Delegated Powers Committee, which, as I said earlier today, the Government respect fully. We discussed the issues with some members of that committee. Earlier this afternoon—I nearly said this morning, but it was earlier this afternoon—the House recognised that the Government had made considerable movement. I tabled amendments that showed we had accepted certain parts of the committee’s report.

However, I hope that the House will appreciate why we cannot accept this amendment. We are dealing with an emergency position. As I sought to emphasise this morning, the emergency position is different even from that of Rolls-Royce. Rolls-Royce involved the expenditure of a considerable sum of public money to buy out the company. We should not pretend that the situation at Rolls-Royce was trivial. Although it involved a one-clause Bill, it was a mightily significant asset. But we are dealing here with confidence in the financial institutions of this country and with confidence, potentially, in one institution. The issue is all about—

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My Lords, I apologise for interrupting the Minister, but how can he describe a situation where it has taken the Government five months to make up their mind as an emergency? If you waited five months for an ambulance it could not be described as an emergency. What is the crisis? What is the emergency? The shares have been suspended. The Minister has still not answered the question that was asked repeatedly at Second Reading. What is the emergency? What is the urgency? Will he explain why he is using terms such as “emergency”? I cannot see any immediate emergency.

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My Lords, we are not talking just about the immediate position; we are talking about the way in which the Act—if this Bill becomes an Act—will operate in any future circumstances. This has been the contention all along. When we talk about confidence in financial institutions, what is at stake is the confidence of depositors in an institution. That is not something to be trifled with. In fact, the very definition of the emergency is the likelihood of any such development. That is why we are concerned to protect the procedures that we envisage here.

Of course we recognise that the Delegated Powers Committee had a substantial argument, and we recognise the Northern Ireland precedent. No one will underestimate the importance of the emergencies and the provisions that were necessary in response to the Northern Ireland situation. But I ask the House—I must have great confidence in being able to appeal to such knowledgeable Conservative Members with regard to the City and City finance—to recognise that the Bill is about emergency in a particular industry and with regard to a certain kind of way in which the emergency would manifest itself; namely, potentially, in the loss of depositors’ confidence.

If noble Lords opposite are saying that the procedure they envisage is one in which Parliament will in due course validate this position, that individuals only have to recognise that this emergency will be resolved, that the Government are taking action, and that both Houses may well eventually endorse the required order, all I would say in response is that that is scarcely conducive to action by those who have anxieties. It is scarcely conducive to their acting with confidence. I recognise the pressure that the Government are under. It is very rare indeed for the Government to argue against a case put by the Delegated Powers Committee, and I cannot pretend that I undertake the task with the greatest enthusiasm. I have great respect for the committee, as do we all. I know how much it means to this House and to Members of the other place. However, that is the circumstance for a particular industry that requires particular consideration. I therefore hope that the noble Lord will recognise why I am asking him to withdraw his amendment.

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I rise to respond fortified in the knowledge that, as I understand from an authoritative source, the title of the Bill as originally drafted was the Banking (Emergency Provisions) Bill. However, officials decided that it could not be called the Banking (Emergency Provisions) Bill because there was no emergency. If that is the case, I think that the Minister has already conceded.

I always enjoy being in opposition to the Minister because, as I said before, you can tell when he does not believe the case he has been asked to put. His voice rises, the volume increases and the party politics leap out at all of us as he seeks to justify what he has been asked to say. It was a marvellous speech for the noble Lord, who of course was previously Chief Whip; it is the sort of speech that every Chief Whip would love, because it was arguing with passion. But the Minister was quixotically chivalrous, if I may say so, in tilting at the windmills posed to him by my noble friend Lord Trimble, who set out a spectre which he quite rightly sought to tilt at. We are dealing here with some quite simple amendments which make it perfectly possible for the Government to proceed. I do not think that we have really heard a justification today for why all this rush.

The noble Lord, Lord Goodhart, who undertakes this vitally important task with the committee, has set out that there have been other occasions, but I do not think that I have ever seen—I am talking only from my memory and not his—such a strong report so clearly rejected by the Government as this has been. That sets an unfortunate precedent. I must say in defence of the Minister that he did say that he found it a very uncomfortable position to be in, to be arguing that we should ignore some of those provisions.

I am very grateful to my noble friend Lord Forsyth, who once again reminded us of the context in all this. The noble Lord, Lord Desai, said, “But we passed the terrorism provisions in 36 hours”. I have only two things to say. First, this is not about guns, bullets and terrorism. Secondly, I do not think that the legislation to which he refers can be held up as a shining example of the best legislation in the circumstances. It would have been far better to have had more detailed scrutiny. That is the great thing about this House. We take things really seriously and go through legislation line by line. We are not being given that opportunity on this occasion.

I say to the noble Lord, Lord Newby, that I recognise his argument. However, I think that my noble friend Lord Trimble countered it. Of course we currently have limited powers on statutory instruments, but it is not necessarily the amendment or the refusal to accept a statutory instrument that is important—it is the opportunity of debate so that the issues can be brought out and considered carefully. I thank my noble friend Lord Onslow for the point he raised.

In summary, this is a sad day for parliamentary democracy. I do not think that we in this place have been treated with the respect that we deserve. This is legislation being rushed through. It is not an emergency. We should have had more time to consider it carefully. The Minister’s rejection of these amendments is probably a classic example of what I am trying to put across. If he had more time, these are just the sort of amendments that he would want to accept. But he said “No”, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 3 not moved.]

Bill read a third time, and passed, and returned to the Commons with amendments.