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Banking Bill

Clause 9: Specific conditions: temporary public ownership Amendment 30 30: Clause 9, page 5, line 35, after ““that”” insert— (a) neither of the other stabilisation options is appropriate or practical, and (b) ”” The amendment deals with the powers of the Treasury to take a bank into temporary public ownership. It will be well known that my party does not much like the public ownership option, whether or not it carries the tag ““temporary””. Although, as I have already said today, we accept that it may be necessary in some circumstances and is an appropriate power to be contained in this Bill, we believe that temporary public ownership should be a last resort. In that we are at one with the Government. The Government’s January 2008 White Paper contained only two paragraphs on temporary public ownership, but made it clear that it was a last-resort option. The July White Paper did not make quite that distinction. However, in Committee in another place, the Minister, Mr Ian Pearson, was very clear. He said: "““The temporary public ownership tool should be seen very much as one of last resort””." As I have indicated, we agree with that but the Bill does not say it. The Minister went on to say that, "““it is not appropriate to use the term ‘last resort’ in the Bill””.—[Official Report, Commons, Banking Bill Committee, 6/11/08; cols. 355, 361.]" We agree with that also. My amendment does not use the term ““last resort”” but seeks to achieve the same effect. The Minister in another place argued that the nature of the conditions in Clause 9 was higher than those in Clause 8 and that made it automatically a weapon of last resort. It is true that the hurdles for using Clause 9 are higher than those for Clause 8, but that does not convert temporary public ownership into a last resort. If the Clause 9 conditions were fulfilled, the Treasury could move directly to temporary public ownership even if the Bank was of the opinion that a private sector purchaser or a bridge bank was a viable solution. Hence my amendment requires the Treasury to satisfy itself that neither of the other stabilisation options is appropriate or practical before considering whether conditions 1 or 2 in Clause 9 are met. This genuinely would turn temporary public ownership into a last resort option. I beg to move.