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Banking (Special Provisions) Bill

Since I was not able to intervene yesterday, I should start by declaring my interest as a director of a UK financial institution. The argument that has been made for maintaining the openness of the measure, apart from the hybridity point, is that in an uncertain market there may be other occasions where banks fall into difficulties. We need to understand that, even if the Government were aware of such specific possibilities, they obviously would not be able to reveal them to noble Lords today. My concern about the measure is that it may lend credence to the notion that nationalisation is the only or first option. We all ought to take the view that nationalisation should be the last resort and that wherever possible the appropriate response to a failing institution should be for it to be put in the hands of another private institution; alternatively, the option of an ordered rundown ought to be considered. It is possible that, if the situation had been dealt with sooner, it would have been easier to find a private owner for Northern Rock. Whether the provision applies for a month or a year, I am concerned that we are leaving it open to the Government to use nationalisation as a first resort. Therefore, irrespective of whether the provision applies for a month or a year, will the Minister explain to the Committee what criteria the Government would use, over and beyond the general criteria set out in the Bill, to decide that nationalisation was the appropriate response to a specific situation? If they are to use the provisions in the Bill to do that, how would they ensure that Parliament as a whole had the opportunity to discuss and challenge them on whether nationalisation was the right response in another instance? If we leave this as an open door for the Government, nationalisation too easily becomes the first resort when it should not be.