---

Banking Bill

Clause 3: Interpretation: other expressions Amendment 7 7: Clause 3, page 3, line 4, at end insert ““, and ““temporary”” means a period which is not expected to exceed 3 years.”” The amendment adds a definition of ““temporary””, as in ““temporary public ownership””, to the end of Clause 3. The term ““temporary public ownership”” was first used in recent times in relation to the nationalisation of Northern Rock. I imagine that the use of ““temporary”” gives the act of nationalisation a more acceptable face. ““Temporary”” has never been defined in the case of Northern Rock and Ministers resisted saying how long they expected the bank to remain in public ownership when nationalisation was first announced, and they have been no clearer subsequently. Northern Rock remains in existence; it is trading with the benefit of public backing and is immune from the disciplines of the capital markets. Is the Minister yet able to tell noble Lords when Northern Rock will cease to be in temporary public ownership? Bradford & Bingley is similarly shrouded in mystery. The deposit book and the branch network were transferred with great speed, which is presumably what a bridge bank would be there for, but the rump of the mortgage book seems destined to remain in public ownership for some time. We have not seen the promised business plan which for a run-off organisation cannot be complex to draw up. We have been told virtually nothing, as has been outlined in previous debates in your Lordships’ House. Is Bradford & Bingley in temporary public ownership or is it in indefinite public ownership? We should be told. The phrase ““temporary public ownership”” is used throughout the Bill as if it had real meaning. We have to assume that the adjective ““temporary”” is deliberately placed in the Bill and is intended to add something to ““public ownership””. If that is the case, we ought to know what sorts of timescales the Minister has in mind. My definition refers to a period not expected to last more than three years. That does not mean that public ownership could not last more than three years, but it is intended to show that the power to initiate temporary public ownership in Clause 9, which we shall debate in due course, should, when it is exercised, be an expectation of a relatively short period, because if a longer period were involved it would not be temporary, and the Government should make specific primary legislation—as has been the case with all other nationalisations. I am not wedded to three years as the definition of ““temporary””, but if the Government can see only an indefinite period, as appears to be the case with Northern Rock and, possibly, the rump of Bradford & Bingley, either they should come clean and say that they cannot sign up to the ownership being temporary or they should look at one of the other options in the Bill. This is not just a debate about semantics; it is about honesty. This Bill spins a convenient line that the Government have eschewed old fashioned nationalisation for a new temporary version. If that is the case, the Government ought to be prepared to nail their colours to the mast and to say exactly what they mean by ““temporary””. I beg to move.