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Banking Bill

I am grateful to the noble Baroness and the noble Lord. The answer to the noble Lord, Lord Northbrook, is that the arrangements in Clause 80 are for a bridge bank controlled by the Bank of England, which of course is not directly answerable to Parliament. That is why those arrangements are spelt out in the way that they are. However, this amendment concerns the Treasury. The Treasury is answerable to Parliament, and Parliament can ask Treasury Ministers to report on the activities of a bank in temporary public ownership whenever it wants—on an annual basis, if it wishes. Therefore, the question is: do we need this amendment to the Bill to provide what obviously already exists as an opportunity for the Treasury to be answerable for any bank in temporary public ownership? The Treasury is already answerable for that and Parliament will take its opportunities. By way of an indication of good faith on this matter, I should say that when Northern Rock was taken into public ownership, it was contended that it should be obliged to provide a business plan, which it did. It did not do so quite as quickly as noble Lords and some Members of the other place might have wished, but I make it absolutely clear that that happened not a year but a matter of months after Northern Rock had been taken into public ownership. The Government were constantly urged to make it a requirement for Northern Rock to provide a business plan and it was duly provided. The noble Baroness raised the matter of UK Financial Investments. We are reviewing the arrangements for how it will operate and how it will be answerable. We do not foresee there being a legislative requirement in that regard; we think that it will come within the framework of the code of practice. However, I emphasise that we recognise that the authority should be directly responsible to Parliament, just as authorities such as the Treasury are obliged to be answerable at any time. There is a different structure for the Bank of England in relation to the bridge-bank concept because the Bank is not directly answerable to Parliament. I am not in any way gainsaying or seeking to disavow the importance of public answerability for the institutions for which public authorities have responsibility. We made it quite clear how we intend to deal with that so far as concerns the Bank of England, and there are further discussions to be had in that regard before our deliberations on the Bill are concluded. However, so far as concerns the noble Baroness’s amendment, the Treasury is of course answerable and can be made answerable at any time. Therefore, the amendment is unnecessary and I hope that the noble Baroness will be convinced that that is so.