May I ask the Leader of the House to give us the forthcoming business?

The business for the week commencing 15 October will be:

Monday 15 October—Remaining stages of the Legal Services Bill [Lords].

Tuesday 16 October—A debate on defence policy on a motion for the Adjournment of the House.

Wednesday 17 October—Opposition Day [20th Allotted Day] (First part). There will be a debate entitled “Incompetent Government Handling of the Outbreaks of Foot and Mouth and Bluetongue Disease”, followed by a debate on dealing with bullying in schools on a motion for the Adjournment of the House.

Thursday 18 October—If necessary, consideration of Lords amendments, followed by a debate on the review of the third sector on a motion for the Adjournment of the House.

Friday 19 October—Private Members’ Bills.

The provisional business for the week commencing 22 October will include:

Monday 22 October—Remaining stages of the Serious Crime Bill [Lords]. Straight after the business statement, the Chancellor will come to the House to make a statement about Northern Rock.

I look forward to answering hon. Members’ questions today, but I just want to remind them that I am always available to talk to them in my room at the back of the Speaker’s Chair.

I thank the right hon. and learned Lady for giving us the future business. Yesterday, the permanent secretary to the Ministry of Justice published an update of the Department’s organisational review, in which the National Offender Management Service could be abolished, on the Ministry’s website. Why is that important announcement being made by a civil servant and not by a Minister, and on the internet rather than to the House of Commons?

On Monday the Leader of House said that she was the “policewoman in the Cabinet”, enforcing the “Parliament first” rule, whereby statements are made first to Parliament, not to the media. Will she make a statement to the House about why the Prime Minister went to Basra for a photo call, announced a troop withdrawal to the media before he came to Parliament and shamefully double-counted the number of troops coming home?

The Prime Minister keeps boasting that he has dealt with the outbreak of foot and mouth, but as he crows, the livestock industry has lost £135 million, the EU export ban remains for much of the country and the official inquiry is reported to blame a Government facility for the outbreak. We will, as the Leader of the House has just announced, have a debate on this in Opposition time next week, but when the inquiries currently under way report, can we have full debates in Government time on the lessons to be learnt?

On Tuesday the Chancellor of the Exchequer in his pre-Budget report proposed action on inheritance tax, on non-domiciles, on aviation tax and on the simplification of national insurance and PAYE. Where the Conservatives lead, this Government follow. Can we have, therefore, a debate on the protection of intellectual property rights?

With this Chancellor, as with his predecessor, we always have to look at the small print. The new Chancellor said that his PBR included an “affordable tax cut”, but far from cutting taxes he is increasing taxes on families by £2,600 a year and there is a £2 billion raid on pensions. The inheritance tax threshold has not been doubled; the Chancellor is just taking credit for what half a million families already do. The Prime Minister’s last Budget was a tax con, the Chancellor’s first PBR is a tax con, so can we have a debate on the Government’s tax cons?

Incompetent, lacking in vision, with the same old spin—the Prime Minister is running scared of the people’s verdict. Yesterday in Prime Minister’s questions his excuse for not calling an election was that only 26 people had signed a Downing street petition calling for one. I checked the website this morning and there are now 4,408 signatures and rising. Can the Leader of the House arrange for the Prime Minister to give us an update on the petition every week in Prime Minister’s questions?

The Prime Minister is running scared of a general election and he is also running scared of a referendum on the renamed European constitution. That is despite the fact that the Labour Chairman of the Labour-dominated European Scrutiny Committee says:

“the red lines will not be sustainable…eventually all of the treaty will apply to the UK.”

Can we have a debate in Government time on the report of the European Scrutiny Committee?

Finally, if the Prime Minister wants to prove that he is not a bottler, why does he not keep his word and give us the referendum that he promised?

We had the party political point scoring at Prime Minister’s questions yesterday. Having had the Punch and Judy then, we can spare the House the Judy and Judy show today. This is a statement on the business of the House, and it will be business as usual.

Turning to the points of business that the right hon. Lady raised, on the Ministry of Justice, there is an ongoing review. There has been no announcement. [Interruption.] The announcement was of an ongoing review and it was notified on the website. If there are any proposals for change, we rightly would expect them to be notified to the House by the Secretary of State for Justice. There are no such proposals at present; the matter is simply under review.

The right hon. Lady mentioned the “Parliament first” rule. We in this House all think it is very important indeed that if there is information that the House should hear first, that is exactly what happens. When the House is not sitting, obviously there is not the option of a statement to the House first. I agree with all hon. Members who think that information should be given to the House first. Indeed the Prime Minister came to the House and made a statement of further information about Iraq.

In relation to foot and mouth and bluetongue, I agree with the right hon. Lady that farmers have had a difficult summer. The Secretary of State for Environment, Food and Rural Affairs came to the House on Monday and announced a package of support for hill farmers who are the most seriously affected. I note that the hon. Lady has made this the subject of her Opposition day debate. If there is any further information, it will be brought to the House. This is a serious problem. We need to identify the problems, contain them and eradicate the diseases which are so damaging.

The right hon. Lady talked about the protection of intellectual property rights. I am sure that she can raise that subject with my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform.

The right hon. Lady asked about tax. As she knows, my right hon. Friend the Chancellor will be answering Treasury questions next Thursday, and no doubt her hon. Friends can raise those questions then.

The right hon. Lady mentioned issues relating to the EU reform treaty and European scrutiny. There will be public confidence in how we deal with issues proposed by Europe only if there are processes in the House that we all agree are working properly, and I do not think that that is the case. The point has been raised by a number of hon. Members on many occasions, including members of the Modernisation Committee, and we shall have to look into it further to make sure that we are doing the best we can in the House to scrutinise proposals from Europe.

The right hon. Lady referred to how the House is dealing with the European reform treaty. She will know that if the Government reach an agreement on intergovernmental issues relating to Europe it will come to the House for ratification— [Hon. Members: “That’s not a referendum.”] Perhaps hon. Members will let me finish. It will come to the House. It is for hon. Members to decide the amendments that they want to table and it is for the Speaker to decide which amendments he accepts.

I am glad that I have some say in these matters. I call Mr. Cawsey.

Given the growth in the number of agency workers, will my right hon. and learned Friend find time for a debate on how the law protects agency workers? The welcome improvements that the Government have made through the minimum wage and employment rights need to apply fully to agency workers, not only so that some of the lowest paid people in our economy get all the benefits from their work but so that good agencies, which do the right thing, are not undercut by their less scrupulous competitors.

My hon. Friend raises an important issue that was also the subject of a private Member’s Bill—the Gangmasters (Licensing) Act 2004—promoted by my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan). We all agree that we need to do more to protect vulnerable migrant workers from exploitation, as well as those who have been working hard in this country for a long time, to ensure that their terms and conditions are not undermined and undercut by unscrupulous agencies. Consideration of what more we can do in relation to vulnerable workers will be raised with my hon. Friends at Question Time, but I will bring my hon. Friend’s point to their attention.

I return to the Prime Minister’s welcome statement in July that his new intention would be always to make statements on important issues to the House whenever appropriate, yet within three months we saw him go back to the bad old habit of making a statement that could absolutely have waited until Parliament came back this week. Will the Leader of the House go back to the Prime Minister and Ministers and make it clear that it is not acceptable that statements are made in the recess, willy-nilly, whatever the subject, when they could wait to be made in Parliament. That completely undermines what the Prime Minister said to the House after his election in the summer.

On a similar issue, the Prime Minister indicated the intention to be open-minded—as the Leader of the House has always been—about constitutional reform, which is very welcome. Given the little local difficulty that the Prime Minister got into last weekend, will the right hon. and learned Lady encourage him to let the House discuss the merits of fixed-term Parliaments, with a guarantee that people are on electoral registers and not off them, and possibly the idea that we hold elections on both days of the weekend to maximise turnout? I am sure that people throughout the country would welcome an unwhipped debate on that subject to test the view of the House.

We heard a welcome statement from the Chancellor earlier this week on public sector borrowing and the comprehensive spending review, but there is to be no extended debate about that, as there usually is after the Budget. Will the Leader of the House suggest that in future we have a full, proper economic debate twice yearly, because then we could ask whether Labour was about to adopt our policy on long-term care funding for the elderly and test whether the flood defence moneys would be adequate or, as all the independent experts suggest, inadequate to meet the damage of recent months.

Finally, rather than having to respond on Opposition days when subjects affecting agriculture and rural communities are put on the agenda or as a matter of urgency when there is a crisis, will the right hon. Lady provide regular opportunities to debate agriculture and the rural economy, not just after the latest outbreak of BSE or bluetongue disease? We must understand that unless we have a healthy agricultural industry which feels supported, the UK will face severe economic and financial difficulties?

We can all agree that when the House is sitting and a Minister has an announcement to make, that should be heard first in the House, not read about in the newspapers or heard on the “Today” programme. That is what is important. However, it is perfectly acceptable for the Prime Minister, as he did, to go to Basra and, when he is there, to answer questions about troop numbers.

The hon. Member for North Southwark and Bermondsey (Simon Hughes) asked about the recall and dissolution of Parliament. The Modernisation Committee, which met yesterday, agreed that under the “Governance of Britain” proposals, we should examine the recall and dissolution of Parliament. Indeed, there will a Speaker’s conference on a number of aspects of building public confidence in our democratic system. It is already possible under the law for voting to take place at weekends. That has been piloted in some areas and it is important that we continue to consider it.

The hon. Gentleman spoke about the opportunities for discussing flood defences. I draw his attention to what the Chancellor said in the pre-Budget report about the increase in money for flood defences. We must not only tackle climate change and reduce carbon emissions—the climate change Bill will be important for that—but invest in adaptation to extreme weather conditions and protect people from floods. That was proposed in the pre-Budget report.

The hon. Gentleman mentioned the importance of the House having topical debates. He is aware that the Modernisation Committee has made substantial proposals for topical questions to be asked without notice at Question Time, as in Prime Minister’s Question Time, and for topical debates. I shall shortly present those proposals to the House.

Will my right hon. and learned Friend allow for an early debate on the disgraceful decision by the Liberal Democrat and Scottish nationalist-run council in Edinburgh to deprive thousands of senior citizens of essential home help services from January—services such as ironing, cleaning and even fetching essential messages?

I know that my hon. Friend is extremely concerned about care and support for older people. Despite his criticisms of the provision of services by the local Liberal Democrat-Scottish National party council, he may be aware that the Government are undertaking a review of the support that we give to carers. I invite him to contribute to that review.

Today’s shaming report from the Healthcare Commission shows that 90 people died of c. difficile in Maidstone and Tunbridge Wells, and I am sure that the thoughts of all of us are with the families and friends of those who died in such tragic circumstances. Will the Secretary of State for Health come to the House to debate the lessons to be learnt from this tragedy? In particular, will he reassure my constituents and those of my hon. Friends that patient care will not be sacrificed to Government targets, be they financial or clinical, and specifically that nursing numbers will not be held back because of targets, and also that the new hospital, which will be 100 per cent. single-bedded rooms and therefore a bulwark against such infections in future, will not be jeopardised by any financial consequences from meeting the recommendations of the report?

Hospital-acquired infections, the subject of the report published this morning, have been an absolute tragedy and a scandal. Lessons must be learnt, not only in the three hospitals involved but more widely in the NHS. That is why yesterday the Secretary of State for Health said that he was announcing more investment in provision for isolation, so that when the disease is identified, the relevant patients can be isolated. He also said that there should be an annual deep clean in every hospital, improved cleaning throughout the year and extra screening. Currently, there is screening for planned admissions, but no comprehensive screening for such infectious diseases when people are brought in as a matter of emergency. Our health and social care Bill will strengthen the inspection regime; as the hon. Gentleman will know, that Bill is in the draft legislative programme.

I want to mention a point about targets and patient care. I remember when we did not have targets on waiting lists, and constituents of mine used to die waiting for their heart operations. The targets are to ensure that patients get the health care that they need. The hon. Gentleman asked about new hospitals. He will have noticed that the pre-Budget report included additional investment in new hospital buildings. I conclude by saying that the Secretary of State for Health will give a further written statement on hospital-acquired infections early next week.

When will my right hon. and learned Friend make time available for a debate on the use of the House of Commons communications allowance during any election period? I ask that in the light of the Electoral Commission’s ruling that Plaid Cymru must declare as election expenses the double-page adverts paid for out of its communications allowance. One was placed a week before the Assembly elections by the hon. Member for Carmarthen, East and Dinefwr (Adam Price) in the Llanelli Star, a newspaper read by my constituents.

Order. Did the hon. Lady notify the hon. Gentleman—

Yes.

Order. The hon. Lady should be allowed to answer; I do not need two people to do so. It is best not to use business questions to attack an hon. Member. That is not their purpose; we are discussing next week’s business.

rose—

I would rather leave the matter.

If the Leader of the House had been here earlier, she would have heard a protracted exchange about the problems of our postal services and the current industrial action. I should say that, as a Conservative, I am sympathetic to the postal workers’ position, albeit perhaps not to their leadership. I believe in the universal daily service and that the postal service is essential to the social fabric of this country. Given that there is such protracted industrial action in a national service, should there not be a debate in this House, so that every Member can express a view? Although I believe that managers of postal services need to make their own decisions, this House and the Government should take an interest in matters that in some cases can affect the lives of individuals.

I am aware that the House had an opportunity for protracted discussion during Business, Enterprise and Regulatory Reform questions this morning. I strongly agree that we all respect the work done by the Post Office work force. We all support the universal daily service. We recognise the huge challenges that have faced the Post Office, first, with the advent of the fax and then with the advent of e-mail, which have transformed the situation in which the Post Office works.

I agree that the strike has been damaging, not only to the Post Office but to businesses that depend on it and ordinary members of the public wanting to use postal services. The Prime Minister has made it absolutely clear, as did the Secretary of State this morning, that in view of the fact that a perfectly decent offer has been made, we want the dispute to end. The industrial action is not justified, as the Secretary of State said.

May we have a debate—or, better still, a Bill in the Queen’s Speech—to close the loophole that allows candidates to spend unlimited amounts of money until four weeks before an election? I am sure that my right hon. and learned Friend is as alarmed as I am by the sight of Lord Ashcroft roaming the country signing cheques for £25,000 at the drop of a business plan, for the few candidates who win his approval. Does that not smell of the Victorian era, when landowners controlled strings of rotten boroughs and could spend money to ensure that their candidates were elected?

My hon. Friend raises an important point. All in the House are concerned that there should be full confidence in the House and in our democracy. We should all be concerned that people do not like the idea that big money comes in and assists people in buying seats. That has been pervasive in the United States and has undermined public confidence. This “arms race”, in which all sides have been spending more and more on elections, has simply been correlated with a fall in turnout. The public are turned off—[Interruption.]

Order. The right hon. Member for Bracknell (Mr. Mackay) must let the right hon. and learned Lady speak. She is answering business questions.

Will the Leader of the House arrange for the Department of Health to carry out an urgent inquiry and make a statement next week about how it sometimes answers priority written questions? Can the Department please look into the fact that when I asked an unhelpful question in September about how many scouts at the world jamboree attended Broomfield hospital to be treated and how many were asked to pay for their treatment, the Minister concerned responded by hiding behind the fact that the Department does not collect such information centrally? When I rang up the Minister’s private office to complain that that response seemed to be blocking, people there helpfully considered the issue again. Ten days later, they sent me an e-mail saying that they had checked with the East of England strategic health authority and Mid-Essex hospital trust and that they were unaware that anybody from the jamboree had been treated. Last night, I received a response to my freedom of information application, which told me that 107 scouts had been treated for 173 medical complaints and that 53 of them were not eligible for free NHS treatment. I also learnt that not one had yet been sent an invoice, even though they have all returned to different parts of the world—

Order. We all have a high regard for the scout movement, but perhaps an Adjournment debate on the issue would be appreciated.

The hon. Gentleman raises an important point about questions. Questions tabled by hon. Members to Government Ministers about issues of public concern or of concern in their constituencies are all helpful, so we should back Members up in asking them.

All answers should be prompt, full and completely accurate. Members should not have to resort to freedom of information requests. If a mistake is made—honest mistakes will sometimes be made and misinformation given in a parliamentary answer—the Department itself should ensure that the answer is corrected and sent directly to the Member concerned. We also need to make arrangements to ensure that corrections are printed in Hansard. At the moment, the relevant Member can be invited to retable the question, but that is a bit clumsy. We are thinking about whether to have a corrections page at the end of Hansard, so that people can see when information has been wrong. I do not want us to seem like The Guardian, but when Government Departments get things wrong, they should correct them; it should not be necessary to make freedom of information requests. As soon as an hon. Member has tabled a question, they should be confident that it will be answered accurately.

On Monday, the House debated the Second Reading of the Criminal Justice and Immigration Bill. As two Government statements were made beforehand, the main debate did not start until 5.39 pm. Back Benchers did not have a chance to make their speeches until two hours later; that meant that some of us got to speak for only five minutes or less. What does my right hon. and learned Friend plan to do to take forward the Modernisation Committee’s recommendation that there should be limits on Front-Bench contributions during such debates?

That is a matter of concern to Back Benchers in all parties and, if I might be so bold, it has been a matter of concern to you, Mr. Speaker, as well. As my hon. Friend said, the Modernisation Committee has introduced proposals that the Government will bring forward for debate shortly. Front-Bench spokesmen need long enough to get their argument across, but not so long that Back Benchers do not have an opportunity to intervene or to make their own speeches.

I urge the Leader of the House to allow time for a debate on the report of the European Scrutiny Committee. I draw her attention to the fact that just last week the Northern Ireland Executive and the Northern Ireland Assembly agreed unanimously that there should be a referendum on the European treaty. I urge her to accede to the growing clamour and demand throughout the country for a referendum. Does she accept that the Government have lost the argument on that, and will the Government allow the people finally to have their say, as they promised they would?

All of us who believe that our membership of the European Union is vital for the health of our economy, our work tackling climate change, our commitment to international development and the tackling of crime, which of course knows no boundaries, think that we could make the argument in favour of Europe much more strongly.

As for the European Scrutiny Committee, and how we deal with the ratification of the treaty, the hon. Gentleman is a Member of this House, and if the Government introduce proposals for the House to ratify the treaty, it will be down to hon. Members whether they table amendments or not. The selection of amendments will be a matter for Mr. Speaker, and it will be a matter for this House to vote on them. The point is that the British people should be reassured that no legislation is simply imposed on this country; it is a matter for this House.

Following on from the point of the hon. Member for Macclesfield (Sir Nicholas Winterton), does the Leader of the House not think that the public will find it absolutely disgraceful that we are not having a debate on the Royal Mail dispute, so that we can put forward some of the views that are not being put forward by Adam Crozier, on his £1.3 million salary, about the deterioration of services for the public that will take place as a result of the planned changes, such as later deliveries, no Sunday collections and a cut in the pensions of our hard working postmen and women? That case has to be put in the House because our loyal postmen and women are being done down very badly by the fact that the Government are not directly intervening.

Although the Post Office runs along commercial lines, this is a matter of public interest. My hon. Friend has raised some very important points and I will bring them and those made by the hon. Member for Macclesfield (Sir Nicholas Winterton) to the attention of my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform.

On Monday, the Secretary of State for Environment, Food and Rural Affairs came to the House and made a statement on compensation for foot and mouth. Yesterday, my hon. Friend the Member for Ceredigion (Mark Williams) asked the Under-Secretary of State for Wales whether the Assembly in Cardiff was going to be fully refunded for any cost. Overnight, there has been some discussion as to whether that contribution by the Department for Environment, Food and Rural Affairs was withdrawn when it became clear that a general election was not going to go ahead. This is a terrible state to be in. Will the Leader of the House ensure that the Secretary of State for Environment, Food and Rural Affairs comes to the House and clarifies the situation?

The Secretary of State is well aware of the terrible difficulties that foot and mouth and bluetongue have caused, particularly the effect on hill farmers, of whom there are many in Wales. Of course, the hon. Gentleman will know that this is a devolved matter—[Hon. Members: “No, it is not. It is reserved.”] The devolved Assemblies have formed their own package of compensation—[Hon. Members: “It is reserved.”] I will undertake to look into that matter.

May we have an early debate into the running of price-comparison websites for goods and services? There is a growing concern that those sites for consumers do not always offer the best deal because they hide the payments that they are making to various companies, and they do not necessarily include the whole range of goods and services available. Some people have called for a code of conduct; I am not sure whether that is the right way forward, but I feel that regulation of some kind is needed to ensure the best possible deal for consumers on the web.

My hon. Friend makes an important point. Consumers need to know whether the information that they are looking at is genuinely impartial and fair advice that will help them when they spend their money on goods and services. I will bring his comments to the attention of my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform.

As my party is now setting the agenda for Parliament, would it not save time if the business statement were made by my right hon. Friend the Member for Maidenhead (Mrs. May)? In the meantime, if that is not possible, may I press the Leader of the House for a reply to a question she was asked but did not answer? On Tuesday, the Chancellor of the Exchequer made a statement on the pre-Budget report and the comprehensive spending review, setting the financial and political priorities of the Government for the next three years. Surely that statement should be tested in the House of Commons, in an early debate in Government time.

Now, resist the temptation.

I will draw that point, and those made in support of it by other hon. Members, to the attention of the Chancellor, and we will consider it.

Will my right hon. and learned Friend give time for a debate on the proper implementation of the Electoral Administration Act 2006? As the Minister responsible for piloting that Act during the first half of its journey through Parliament, she will be aware that one of its key elements was door-to-door canvassing to increase voter registration. Advice given by the Electoral Commission to electoral registration officers in June said that that was not necessary. This matter needs to be fully discussed in Parliament.

My hon. Friend raises an extremely important point. He has been a champion of ensuring that everyone who is entitled to vote is on the electoral register, so that they get their vote. It is of particular concern to him that those least likely to be on the electoral register are those who live in inner cities, poorer people, younger people, those in rented accommodation and black and Asian people. We cannot have an unequal democracy and, therefore, the electoral register is an important part of democracy, which underpins this House and its legitimacy. I will raise the point about the recommendation against door-to-door canvassing; that was not the intention of the House when we passed the Act. I will get my right hon. Friend the Secretary of State for Justice to write to him, and place a copy of the letter in the House of Commons Library.

May we have a debate on the effective use of resources in the health service? I have been trying to discover what lies behind proposals to close Brookfields hospital in my constituency and I have found out that vast amounts of public money are lying unspent in the accounts of strategic health authorities: £960 million last year and a predicted £660 million this year. Surely it makes no sense whatsoever to close hospitals in one part of the country while vast amounts of public money are unspent in other parts.

If the hon. Gentleman wants a response from Health Ministers, and the opportunity to debate and air the issues he has raised, he might consider that a very appropriate subject for a debate in Westminster Hall.

May we have a debate in Government time about the lessons learned from the collapse of Farepak, the Christmas saving company, which happened this week last year? We now know that the Halifax Bank of Scotland and Farepak management met in February of last year because the company was in dire financial straits, but it kept taking money off agents until last October. Does my right hon. and learned Friend agree that the minutes of that meeting should be put into the public domain so that the hundreds of thousands of decent, hard-working families can finally learn where their money went?

First, I pay tribute to the work that my hon. Friend has done on exposing the scandal of Farepak, alongside that of my hon. Friend the Member for South Swindon (Anne Snelgrove). It is a very important issue, and it has led to a tougher regulatory regime to ensure that something similar does not happen in the future. As he says, there are still lessons for those individuals to learn from what happened to Farepak. As he knows, an investigation is being carried out under the powers of the Companies Act. When such an investigation is being carried out, there are technical and complex rules about what is available for publication and what has to remain confidential. We want to be sure that everything that can be published is published, because it is a matter of public interest. I will ask the relevant Minister to ensure that that does happen, and that he writes to hon. Members concerned and places a copy of the letter in the House of Commons Library.

What has happened to the Senior Salaries Review Body’s report on Members’ salaries, which the Government received before the recess?

The report has been delivered and the Government are considering it. We will publish it, along with our recommendations, and the House will have an opportunity to debate it shortly.

Many people in other parts of the country will be worried about the hospital infection stories emerging from Tunbridge Wells today. I am therefore pleased that there will be a statement. However, will my right hon. and learned Friend encourage her colleagues in the Department of Health to go further and seek positive opportunities to debate what works in controlling hospital infections? For example, Plymouth Hospitals NHS Trust, based in Derriford hospital, has one of the lowest infection rates in the country and also manages to fulfil other targets.

I join my hon. Friend in paying tribute to her local hospital. It is important to listen to clinicians and others who work in the health service about the way in which we tackle hospital-acquired infection. It is important that we understand the science of hospital-acquired infection and that we listen to patients, who, with their visitors, are the first to complain about dirty facilities in hospitals. The additional use of antibiotics has meant a growing difficulty with tackling hospital-acquired infection once it has taken root. However, I remember complaining that I was not allowed to spend long enough in hospital when I was having my first baby—one was tipped out after a week; it is now 24 hours—and my father, as a doctor, said, “You want to spend as little time as possible in hospital because hospitals always carry a risk of infection.” We are not considering anything new, but the position has become much graver.

As the Leader of the House knows, I had a debate on the EU constitutional treaty referendum in Westminster Hall, where I received a pretty inadequate response from the Minister for Europe. Perhaps we could have a full day’s debate on the subject. One of the reasons that the Prime Minister gave for bottling out of a general election was that polls showed that few people required one. However, poll after poll shows that the vast majority—three quarters of the people of this country—want a referendum on the EU constitutional treaty. May we please have a debate on that?

I refer the hon. Gentleman to my previous comments on that subject.

I have friends and relatives who work for Royal Mail as postal workers and on the management side. I am therefore under no illusions about the complexity of the issues involved or the difficulty of the negotiations. Although we had a brief discussion of the matter on a single question earlier this morning, my right hon. and learned Friend must know that it is potentially the most serious industrial dispute of the past 10 years and possibly the past 22 years. On next week’s agenda, we have three Adjournment debates on issues that cannot be considered remotely topical. In view of my right hon. and learned Friend’s express support earlier for more topical questions and debates, will she reconsider the future business so that we can have a debate on the dispute at Royal Mail on the Floor of the House?

My hon. Friend is right that no one doubts the seriousness of the effect of the dispute on those who work in the Post Office, the Post Office as a whole and those who use it. I shall draw his comments to the attention of my fellow Ministers.

Returning to the Leader of the House’s welcome to the “Parliament first” initiative, and given that she inadvertently misled the House when she answered a question from the hon. Member for North Southwark and Bermondsey (Simon Hughes), may I invite her to confirm that the Prime Minister was not answering casual questions in Basra, but holding a formal press conference to announce troop reductions? Will she also confirm the number of days that elapsed between that press conference and the return of the House on Monday?

I would simply confirm to hon. Members that I agree that announcements should be made to the House first. However, I also expect hon. Members to understand that, if the House is not sitting, that does not mean that Ministers cannot make announcements, and that they will continue to be made in the recess. I shall focus on ensuring that, when the House is sitting, information is given to the House first.

Regardless of the way in which the statement was made, thousands of service personnel—men and women—will return to their families from Iraq in the near future. May I ask my right hon. and learned Friend to use her good offices to encourage local authorities and communities to recognise the work of the service personnel when they return, not jingoistically but in a way that acknowledges their valuable contribution to the safety and security of this country?

I absolutely agree with my hon. Friend’s important point. The Secretary of State for Defence believes that it is important that we recognise the work of the armed forces and I will draw his attention to my hon. Friend’s comments.

Will the Leader of the House consider making time available for an urgent debate on the worryingly high levels of personal debt, especially among students and graduates, which threatens to undermine future economic stability? Does she agree that such a debate would be especially pertinent in view of the widely differing predictions in the Government’s pre-Budget spending review, which the independent assessors published this week?

The Government are concerned to protect people against unwise borrowing, which they are at risk of being unable to repay. However, I refer the hon. Gentleman to the statements of my right hon. Friend the Chancellor about his confidence in future economic stability.

There are persistent rumours in this place about an early prorogation, so there must be plenty of vacant slots into which debates can be inserted. Will the Leader of the House arrange a debate on a topic of concern to 15,000 people in my constituency, and, indeed, people in every constituency: the 9 million people who suffer from some form of arthritis, such as rheumatoid arthritis or osteoarthritis? Tomorrow is world arthritis day and it would be appropriate for a Minister in this place to make a statement next week on the steps that the Government are taking to tackle the problems that are associated with the distressing condition, which affects not only elderly people but those across the spectrum of society.

My hon. Friend makes an important point, which I shall draw to the attention of my colleagues in the Department of Health. It may well be right to issue a written ministerial statement on national arthritis day.

May we have a clear, unequivocal statement next week on what is and is not allowed in Parliament square? The right hon. and learned Lady knows that her predecessor, the right hon. Member for Neath (Mr. Hain), informed the House and the Commission—as you will remember, Mr. Speaker—that the legislation that was passed would deal with the eyesores in Parliament square. Yet we now have more of an eyesore than ever.

What is or is not allowed in Parliament square is a matter for the law that has been passed by the House and its independent enforcement by the police and the Crown Prosecution Service. If the hon. Gentleman believes that we should change the law, he should present proposals. The issue is raised in the Green Paper entitled “The Governance of Britain”, to which he could respond.

If the Leader of the House is having difficulty with the constitutional position on foot and mouth compensation, may I commend to her a concise—some might say elegant—statement of the law contained in my point of order at column 416 of yesterday’s Hansard?

Will the Leader of the House ensure that, when we have the debate in Opposition time, the Secretary of State for Environment, Food and Rural Affairs will lead for the Government? On Monday, he gave the House the impression that he had no responsibility for Scotland. That is wrong and an error that is making the important topic a political football for the Scottish National party in Edinburgh. The farmers and crofters in my constituency and throughout Scotland need answers before the economic and animal welfare crisis reaches a peak.

We would all agree that all Departments, Government agencies, local government and the devolved Administrations should work to get the best possible deal to support farmers in that difficult situation and avoid its becoming what the hon. Gentleman describes as a party political football. He is right that there will be a debate next week. I am sure that the Secretary of State will be able to respond in the necessary way.

Does the Leader of the House think that it gives a good impression of this place if all the good ideas for debates and statements from Back Benchers in all parts of the House are turned down, so that the House can plan another holiday, shortly after a 10-week recess? Is the image of the House further enhanced by the proposal that MPs should be able to take precedence over other people in queues?

The right hon. Gentleman raises two points. The first is about the availability of time for hon. Members to get topical debates. As he will know, members of the Modernisation Committee under the previous Leader of the House made some proposals, which will be brought forward, that will enable Back Benchers to have more topical questions and topical debates.

The right hon. Gentleman also raised the question of hon. Members and others who use the Palace of Westminster’s facilities. I understand that it was the existing rules that were reissued. We would all agree that when it comes to running for a vote it is important that the lifts should be available to hon. Members. However, in the 21st century, if two human beings are standing next to each other queuing for a sandwich or cup of coffee, it cannot possibly be right that because one of those people is a Member of Parliament, they go first.

With permission, Mr. Speaker, I should like to make a statement on Northern Rock plc. Before I start, however, I draw the House’s attention to the fact that I have informed both the Register of Members’ Interests and the Treasury’s permanent secretary that, like many others, my wife and I have a mortgage with Northern Rock, but no savings or deposits.

As I said in my written statement on Monday, Northern Rock got into difficulty following the problems triggered in the US mortgage market, which have gone on to affect the financial markets in countries all around the world. In early August, when the markets realised the extent of the problems in the US sub-prime market, they also began to have doubts about the value of other asset-backed securities. Uncertainty over which institutions were exposed and to what extent meant that institutions lent to each other at much higher rates, and in some cases stopped lending to each other altogether. The result was a large reduction of money in the market generally and an increase in the cost of borrowing, not just for those with exposure to the sub-prime market, but for all institutions.

Those developments have had a global impact, affecting major US mortgage lenders, a major French bank and banks in Germany. The availability of credit has increased over the past few weeks, so we can be more confident, but we cannot be certain when the current instability will end. Britain entered the global turbulence with a stable economy and a strong banking sector, which has experienced rapid growth, with well capitalised balance sheets. British institutions have less direct exposure to sub-prime assets and our sub-prime market share—5 per cent.—is much lower than that of the US. However, because of its business model, Northern Rock faced a particular problem. It has a large share of Britain’s mortgages, but they are primarily financed through the wholesale markets, including a significant proportion from securitisation. That meant that Northern Rock was particularly vulnerable to the virtual closing of that market over the summer.

On 14 August, the Financial Services Authority told the Bank of England and the Treasury about its concerns about Northern Rock and its vulnerability in the current market circumstances. During August it became increasingly clear that Northern Rock was having difficulty getting access to the financing that it needed and that the cost of doing so was increasing. The general situation and Northern Rock’s position in particular were monitored on a daily basis. On 5 September, the Bank announced £4 billion of extra support to provide increased liquidity to the wider market. As Northern Rock’s position deteriorated, it became clear that specific support was likely to be needed for it. On 13 September the Governor and the chairman of the FSA recommended that I authorise the Bank to provide special liquidity support. I agreed because I believed that that was justified.

There are clear principles governing such support, which are set out in the memorandum of understanding between the Treasury, the Bank and the FSA that was first signed in 1997. Such support should be undertaken only when there is a genuine threat to the stability of the financial system and in order to avoid a serious disturbance in the wider economy. That was the case here. The provision of support was announced on 14 September. Although the FSA had assured the public that Northern Rock was solvent and that if depositors wanted to get their money out, they could do so, it became clear that further assurance was needed. Therefore, on 17 September, again on the advice and with the agreement of the FSA and the Bank of England, I announced that during the current instability in the financial markets, and should it prove necessary, I would put in place arrangements that would guarantee all the existing deposits in Northern Rock. That undertaking was extended on 20 and 21 September.

The Treasury, the Bank and the FSA continue to work intensively with Northern Rock with a view to helping it to resolve the situation. Any future solution must lie with the company, but the Government have provided appropriate help and will continue to do so. As I reported to the House on Tuesday, I have extended the Government’s guarantee arrangements to all new retail deposits for which Northern Rock will pay a fee, while the Bank has provided an additional loan facility, which has replaced that of lender of last resort. I have today written to the Chairman of the Select Committee on the Treasury and the Select Committee on Public Accounts setting out more details. I am also publishing that letter and placing a copy in the Library of the House.

There are clearly lessons to be learned from what happened to Northern Rock and the wider instability across the world. The responsibility to minimise risks and prevent problems from happening in a particular bank lies first and foremost with the directors acting on behalf of its shareholders. That is their clear duty. It is the job of the financial authorities to set the policy and the regulatory framework in which institutions and markets work. Let me remind the House of those responsibilities. As the House knows, the Bank of England has complete independence in monetary policy. Its second core purpose is financial stability, a role that it discharges on a daily basis. The FSA, also independent, is responsible for the supervision of individual firms such as Northern Rock. Because of the importance of the financial system for the stability of the economy as a whole and because of the potential impact on the Exchequer in ensuring stability, the Government are rightly also involved. The Treasury is responsible for the overall legislative framework and I am accountable to Parliament.

It is right that the Bank and FSA should continue with those responsibilities. The model is one that others around the world are now following, but we need to review how the framework has operated and put in place whatever practical improvements are needed. As the FSA has said, it is reviewing its own lessons for itself. I look forward to its conclusions early next year. We need to make more reforms to prevent problems from happening internationally and in Britain. First, when the Financial Stability Forum reports to Finance Ministers at the G7 in Washington next week, I will urge faster rapid implementation of international agreements on solvency, accelerated work on international standards for regulating liquidity, more transparent information on credit ratings and action to improve the transparency of off-balance sheet vehicles. Secondly, I will propose an International Monetary Fund and Financial Stability Forum early warning system to strengthen financial sector surveillance and to identify risks to stability and co-ordinated regulatory responses to them. Thirdly, I can report a European agreement this week to strengthen arrangements for ensuring financial stability in Europe and increase cross-border management.

It is important that regulators focus on liquidity as well solvency. Here at home, the FSA will shortly set out proposals for a review of the UK liquidity regime. As the Governor has said, all central banks face problems in providing support to banks in difficulty in a world where markets rightly expect high levels of disclosure and transparency. I can therefore confirm that if it proves necessary to clarify in Europe the legal and practical issues surrounding the way in which such support is provided and disclosed to protect financial stability, we will work with other European countries to provide that certainty. We will now review whether rules about swift takeovers of banks need to be changed.

When problems occur, however, we need to have a system in place that is clear and which reassures depositors. We will introduce legislation in the next Session to establish a new regime. With the FSA and the Bank, I am proposing the principles for the new regime in a discussion document published today. The new regime would mean that depositors would be insulated from a bank that had failed and would provide them with both greater compensation and certainty that their compensation could be paid out quickly. As a first stage, the FSA has decided that the financial services compensation scheme covers 100 per cent. of deposits up to £35,000, but I have made it clear that that is just an initial step towards a more comprehensive change.

We will continue to work closely with the banking industry, consumer groups and others to agree the new regime, and I hope that there will be cross-party consensus on it. We must all, internationally and domestically, consider what lessons there are to be learned from the summer’s events, and if needed I will take action. The changes that we will make will strengthen our reputation as the world’s leading international financial centre, and will be founded on our commitment to maintain a strong and stable economy. I commend this statement to the House.

Let us be clear why the Chancellor is making this statement today. This country has seen its first run on a bank for 140 years, and while as he has pointed out the credit problems have been global, it is only in Britain that we have seen people queuing to withdraw their savings. That is because the system set up by the Prime Minister to prevent precisely such a crisis has failed its first serious test.

There are three accusations facing the Chancellor. The first is that he knew for more than a month that Northern Rock was in trouble and still failed to prevent the crisis. He said in his statement today that the company’s business model had made it particularly vulnerable, but he was praising that model earlier this year when he was Secretary of State at the Department of Trade and Industry. The Bank Governor told the Select Committee that a combination of four different pieces of legislation meant that the tripartite committee was powerless. Why did not the Government, with all the contingency planning that they have done over the past 10 years, realise that there was a gaping problem in their new financial oversight system? The director general of the CBI pointed out that

“you don’t wait for the cinema to catch fire before you check out whether the fire precautions are going to work”.

Why did the Chancellor choose to give an interview to the press on 12 September—the day before it emerged that Northern Rock was seeking emergency help—in which he attacked the banks and said that they should be more honest? Did he know that, within 48 hours, he would be trying to reassure the public about the honesty of the banking system? Was he not undermined by his own spin?

Will the Chancellor release the letters that he received from the Bank and the FSA? The Bank Governor has told the Select Committee that he is happy for them to be released, and I am surprised that they have not been released today. When the Chancellor was forced to offer the general guarantee to existing Northern Rock savers, he said that it would be “unfair to other banks” to extend it to new savers. Why has he changed his mind this week and done just that?

The second accusation facing the Chancellor is that, when the crunch came, no one knew who was in charge. The Bank Governor confirmed this in an answer to the Select Committee, which I praise for the work that it has done on this matter. When the Bank Governor was asked who was in charge, he answered:

“What do you mean by ‘in charge’? Would you like to define that?”

Is not the fundamental flaw in the tripartite system set up by the Prime Minister 10 years ago a flaw that the then Chancellor was warned about when the measures passed through the House—namely that no one would know who was in charge?

For example, the FSA says that it saw its job as simply reporting Northern Rock’s liquidity problems to the Bank. However, the Bank says that it sees its job as looking at the liquidity of the whole financial system rather than that of individual institutions. Frankly, it is a bit late for the Chancellor to stand at the Dispatch Box and say that we need to review the liquidity regime. Who is in charge? The answer is that the Chancellor of the Exchequer was supposed to be in charge, but he was not.

The third and final accusation against the Chancellor is that he does not yet seem prepared to take strong and decisive action to prevent such a disaster happening again. He says that he wants cross-party consensus. I wrote to him on 20 September offering the full co-operation of the Opposition in making the legislative changes necessary to protect depositors and to allow the Bank to do its job. He has not bothered to reply to me, but I can tell him that we will work with the Treasury on this to create an oversight system that works.

The proposals that the Chancellor has set out today, and those that he is consulting on, need to meet certain tests. We need to be clear about who is responsible for monitoring liquidity and to ensure that regulation does not prevent us from dealing with a liquidity crisis when it arises. We need to be clear whether the regulation is European or has been gold-plated by the British Government. We need to reinforce the independence of the Bank so that there can never again be any suspicion of political pressure. We also need to insist that any new system, while protecting savers, does not stifle financial innovation or protect investors when that innovation goes wrong.

Will the Chancellor explain why he failed to mention the £100,000 figure that he gave to a newspaper in an interview three weeks ago as the sum that was likely to be covered by deposit insurance? It was not mentioned in his statement or in the consultation document, yet he chose to mention it to a newspaper. We also need to take steps now to tackle the growing personal and public debt that leaves Britain’s economy more exposed than others to financial turbulence, and we need to be clear about who is ultimately in charge.

It will take many years for the memory of the queues of panicked savers on our high streets to fade. The Government’s boasts about stability and financial competence will now ring hollow. We will work with the Government on the changes that are needed, but the first thing that the Chancellor needs to do is to take responsibility for this mess. It is about time he provided the leadership and the decisive action that his high office demands.

I am grateful to the hon. Gentleman for what I take it was meant to be helpful advice, at least in respect of some of his comments. Let me deal with the points that he has raised.

As I told the House in my statement, it first became apparent to the FSA and the Bank in the middle of August that Northern Rock had difficulties. Between then and Northern Rock formally asking the Bank for facilities, a great deal of effort was made to try to help Northern Rock to resolve the position. The position was monitored on a daily basis, and Northern Rock was in close contact with the FSA, the Bank and the Treasury. During that period, a number of alternative courses of action were looked at, but unfortunately they did not work.

The problem that Northern Rock faced was that, because it had to get new financing facilities on a pretty regular basis and because the market could spot that fairly quickly, it became apparent that it was in difficulties. It could not therefore get access to funds, and the price that it was being charged was going up. I can tell the hon. Gentleman, however, that we did everything that we could to try to resolve the situation without special support becoming necessary. Eventually, however, it became obvious that unless special facilities were made available, the bank would be in very great difficulty indeed.

That brings me to the second point that the hon. Gentleman raised, on help for banks. The Governor did not say that the Bank was unable to help Northern Rock because of current legislation. What he was talking about was whether that help could be given in a covert way as opposed to being completely open about it. I am bound to say to the House that this is a real problem. In this country—and perhaps right across the world—we have been moving towards more transparency and openness, which is generally a pretty good thing. The difficulty was that, because Northern Rock’s trading position had deteriorated so rapidly, it was advised by its own legal advisers—for perfectly understandable reasons—that it would have to issue a profits warning. It was also coming to the view that, because of its listing requirements, the fact that it was about to get facilities from the Bank of England would probably have to be disclosed. The Governor was also saying that the current legislation might require that disclosure. In addition, he made the point that, if it had been possible to arrange for another bank to come in, part of the takeover code might make that difficult over a weekend. I am looking at all these things, and if we need to change the legislation, we certainly will.

When we were discussing these matters prior to the Bank’s support being made available, I was pretty sure that it would get leaked, and I was absolutely right. The House will know that the story was broadcast by the BBC the night before the formal announcement was made, which is what led to the difficulties over the next few days. We need to look at that, because it is in the interests of the financial system not only in this country but across the world that, if central banks need to intervene, they should be able to do so in a way that is sensible.

The hon. Gentleman raised a number of other points. The Chairman of the Treasury Committee has written to me asking about the letters that I have received from the Governor and the FSA, and I will respond to my right hon. Friend before I appear before the Select Committee later this month. Yes, we have extended the guarantee, because I believe that it is right to help Northern Rock to have a period in which it can explore the options available to it, with a view to resolving these difficulties.

On arrangements between the Bank, the FSA and the Treasury, ultimately I am responsible to this House for whatever they do; that is part of being Chancellor. I hesitate to agree, however, if the hon. Gentleman is suggesting that we should move towards a situation in which the Bank or the FSA were merged, which would not be the right thing to do, as the institution would become unmanageable. If the question is whether I think that improvements should be made and that we should look further into the arrangements between the Treasury, the Bank and the FSA, of course that is the case. We do need to learn the lessons.

Finally, I am consulting on the protection of consumers. Having had some experience with courts in relation to consultation, I put out some general principles because the law appears to be that, if Ministers consult and then go on to close off or close down some of the options, we have to start all over again—and I do not want to get myself into that position.

In conclusion, there are clearly lessons to be learned from what happened with Northern Rock, but as I have said on many occasions over the past few weeks, we benefit from having a strong economy and a generally strong banking sector, which I believe will enable us to get through these difficulties and maintain our reputation as the world’s leading financial centre.

I thank the Chancellor for his statement. He knows that the Treasury Committee is looking into the issue and doing so in a wider context. The point that he raised about covert operations brings into question the concept of the lender of last resort, which is an issue that the Treasury Committee will be looking into. The real issue is how we help to protect depositors. Is the £35,000 figure correct? I would suggest that the key is consumer confidence. If consumers do not have confidence, the figure will be incorrect and it is important that we have the widest consultation on that. Another lesson is that depositors need easy and immediate access to their savings. Given that more than a quarter of global assets are now internationally owned, we need to address these problems in an international context. Will the Chancellor tell us exactly what he intends to do in that particular area?

I am grateful to my right hon. Friend. As I said a few moments ago, I am due to appear before the Treasury Committee later this month.

My right hon. Friend is absolutely right that this matter needs to be addressed internationally as well as here at home. I said in my statement that I thought that a number of steps were necessary internationally. We have to ensure that regulators look not just into the solvency of institutions but into any liquidity problems that they might have. That also means ensuring that current rules as they apply internationally as well as domestically allow regulators and institutions to focus on that.

My right hon. Friend is quite right too about the deposit protection scheme. A number of steps are necessary to reassure people. If a bank fails, it should be possible immediately to remove the depositors’ money from it and run it separately, and ensure that it can be paid out as quickly as is reasonably possible. I have made it clear that the £35,000 is a first step; that is all that the FSA can do at the moment. I think that we need to go beyond that. That is precisely why I am consulting, because, of course, the scheme is financed by banks and other financial institutions. International action, as well as action to protect depositors, is absolutely essential.

I thank the Chancellor for making his statement. He could have hidden behind his Tuesday written statement and the pre-Budget report, but he has come before the House now, which is good. I am afraid that that is the only positive thing that I want to say, because this statement reeks of complacency. Frankly, the Government have become complicit in large-scale irresponsible lending by the same management—and it continues even today—in what amounts to little short of a banking scam.

It has already been said that financial turbulence has existed in the financial community internationally throughout history, but this is the first time since the collapse of Overend, Gurney and Co. in 1866 that we have had a run on the system. The Chancellor talked about the business model, so does he agree with the FSA that that model was, in its words, “extreme”? This was a bank that was doubling its mortgage lending in six months and taking 20 per cent. of the market, on the back not of depositors but of large-scale rapid securitisation into markets, which became discriminating and pulled the plug on it.

The Chancellor said in his Tuesday statement that the bank had “very little exposure” to the sub-prime market directly, but is he aware that, indirectly, it was forced to issue a statement on 14 September acknowledging that £600 million of its assets—30 per cent. of its shareholders’ funds—were of questionable provenance? I know that there has been a postal strike, but why was that information not communicated to the Treasury, which seemed to be unaware of it?

Worse, is the Chancellor aware that the same lending practices are continuing today? A member of my Treasury team, Lord Oakeshott, rang the bank yesterday and made inquiries about its mortgage opportunities. As we would expect, he is someone of good credit standing, but the terms that he was offered were quite extraordinary. He was offered 127 per cent. of the value of the house, including the roll-up of the arrangement fee—five to six times his income—and 30 per cent. of the loan was to be unsecured. I do not know whether that is what the Chancellor meant when he talked about a return to old-fashioned lending practices. In the current economic circumstances and given the warnings about house prices from the Royal Institution of Chartered Surveyors, most reasonably cautious bankers would say that that borders on the insane. It is happening because the Government are underwriting the bank. That is precisely what the Governor of the Bank of England warned of when he talked about moral hazard.

Will the Chancellor tell us how much taxpayers’ money is exposed to this bank? I believe that there is £11 billion in lending and £23 billion in guarantees, so we are talking about a sum of money in one bank that is roughly equivalent to annual spending on the armed forces. When the Chancellor agreed to the effective nationalisation of the liabilities of this bank, why was the management—including the chief executive, who has been paid £10 million in five years for taking his bank on to the rocks, and the directors, including the ubiquitous Wanless—not sacked? I would include the FSA, which has admitted that in 18 months it did nothing to check the bank.

We all understand that once the run had started, the Chancellor had no alternative but to guarantee deposits, as opposed to the institution and the shareholders, and I am sure that that was right, but why is he now extending that guarantee to new depositors? Does that not encourage irresponsible lending and is it not unfair on other banks that are acting responsibly? Is it not even more unfair on pensions institutions, which, as the hon. Member for Wolverhampton, South-West (Rob Marris) reminded us yesterday, do not have such a guarantee?

My concluding point is that this is not just a passing embarrassment. It is potentially a tragedy for the 5,000 or more people in Newcastle whose livelihoods depend on the bank, but it is also a scandal in which substantial numbers of people in the financial community are heavily involved. When the Chancellor has taken the necessary prudential action, will he have a full independent—

Order. I was reluctant to interrupt the hon. Gentleman, but he is going beyond the conventional length of time that he is allowed.

First, the hon. Gentleman suggested that I should have sacked all the directors of the Northern Rock bank, but I do not have the power to go around sacking the directors of any company. The company is owned by its shareholders and the directors are responsible for the running of it. The decisions taken by Northern Rock in respect of its business model and its lending—whether generally or to the noble Lord Oakeshott in particular—are a matter for the bank and not for any Minister. The hon. Gentleman seems to be confused about that. The bank belongs to its shareholders and is run by the directors. If the directors are to be changed, it is a matter for the shareholders.

The FSA is responsible for the regulation of Northern Rock. The chairman of the FSA, Sir Callum McCarthy, said before the Select Committee earlier this week that it clearly has lessons to learn about the supervision of not just this bank but others. The hon. Gentleman seemed to suggest that Northern Rock’s problems were because of the sub-prime market, but according to the FSA the bank has a good quality loan book. That has been fairly well established over the last few years.

I was not clear whether the hon. Gentleman was for or against the guarantee that was given: he seemed to shift his position two or three times. It was necessary to provide the guarantee for the stability of the financial system as a whole. The present arrangements are also necessary to give the bank time to make whatever adjustment is appropriate and whatever arrangements are appropriate for the future.

My right hon. Friend will know that Northern Rock employs 4,000 people at its headquarters in my constituency. Contrary to the attitude and tone adopted by the official Opposition, and the lack of support given to Northern Rock and the people who work there by the Liberal Democrats, depositors around the country very much welcomed the action taken by the Government and the Bank of England in September, and again this week, to protect deposits. People who work at Northern Rock in my constituency have made the point to me that the business is viable, and if it is kept together as an entity it will continue to be viable and the jobs of 4,000 people in my constituency and 1,500 people in the constituency of my hon. Friend the Member for Sunderland, South (Mr. Mullin) will be protected. That is the priority. Will my right hon. Friend use his good offices to do what he can, even in an unpredictable situation, to retain that entity?

My hon. Friend makes a good point. The Northern Rock bank is of great importance to his constituents and to the north-east of England. It enjoys a good reputation and employs more than 6,000 people nationally. I very much hope that a solution can be found in the next few weeks and months that will enable the bank to continue. Ultimately, that will be a matter for the bank, but I very much recognise the point that my hon. Friend makes and the importance of the Northern Rock bank to Newcastle in particular.

The Chancellor will accept, however, that there is widespread concern and anger in the north-east at the way in which the affair was handled. In particular, what provoked the Bank of England to announce that Northern Rock was looking for help? The European Central Bank managed to rescue—I think—two German banks and a French bank without a similar panic. I am at least grateful that the Chancellor appreciates the importance of the bank to the north-east economy and to many of my constituents, who, like those of the hon. Member for Newcastle upon Tyne, North (Mr. Henderson), want to see the bank rise again. As the Chancellor said, the order book is strong. We will note the complete lack of support from the Liberal Democrat spokesman for the bank and the people who work in it in the north-east.

As I said in reply to the shadow Chancellor, the difficulty with the announcement that the Northern Rock bank would get specific help from the Bank of England was that, as I always suspected, somebody told the BBC about it. In the light of that, the information could not have been kept private. That is a problem not just in this country but across the world. We want to be as open and transparent as possible, but there will be circumstances in which support may be necessary for one or a group of institutions, and if someone chooses to go and tell the BBC or another outlet about it, the whole thing becomes public. That is the reason why the decision was ultimately taken to make an announcement. Unfortunately, just a few hours before that announcement was made, a highly damaging story appeared on the BBC that caused huge problems for the Northern Rock bank. That is a problem, and we will have to consider how to resolve such problems in future. I agree with the hon. Gentleman, who represents a constituency just outside Newcastle and will know the importance of the bank to the north-east. The more that we can do collectively to help the situation, and not make sometimes irresponsible statements, the better.

As a long-standing customer of Northern Rock—I suppose that I should declare an interest in the usual way in that regard—I assure my right hon. Friend that savers are very grateful to the Government for the support afforded at a difficult time. Our concern, however, has now turned to the future. What can the Government do to help to ensure the continuation of Northern Rock as an independent north-east based company? Will he take on board the comments of my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) and assure the House that the Government will help to protect the security of employment of thousands of Northern Rock staff in the north-east, and to protect the Northern Rock Foundation, which supports arts and culture, young people, children in need and other disadvantaged groups across our region?

On that last point, as my hon. Friend knows, the Northern Rock Foundation has given grants of more than £28 million, and that is one of the reasons why the Northern Rock bank has much popular support in the north-east, along with the fact that it is a major source of good-quality employment. The most significant thing that the Government can do is to continue to provide the support that we have offered to Northern Rock, and to give it time to consider its strategic options. We stand ready to do whatever is appropriate as and when the bank decides what the best option is.

Which of the two regulators has primary responsibility for ensuring that banks are sufficiently liquid as well as solvent? Why did Ministers choose to implement the EU market abuse directive in such a way as to take out the exemption of situations of grave and imminent danger, thus making a rescue more difficult?

On that latter point, as I said a few moments ago, the EU directive was not the stumbling block. We looked at many considerations. As I said in reply to the shadow Chancellor, given that the bank was going to have to issue a profits warning, that it had to have regard to the listing requirements and the impact of getting facilities from the Bank of England, and that the news would almost certainly get leaked, which turned out to be the case, we believed that it was better to make an announcement than not to do so. If we need to look at the current law, we will do that. In relation to the hon. Gentleman’s first point, the primary responsibility for supervision of individual institutions lies with the Financial Services Authority.

May I underline the points made by my hon. Friends the Members for Newcastle upon Tyne, North (Mr. Henderson) and for Tyne Bridge (Mr. Clelland)? Despite all that has happened, Northern Rock is a respected institution, and remains so, in the north-east. It also employs a large number of my constituents. No one wants to see it taken over by some predator and asset-stripped. Will my right hon. Friend do all in his power to prevent that from happening?