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Banking Bill

My Lords, government Amendment 60 requires the Treasury to lay before Parliament every year a report on the activities of any bank in temporary public ownership. This is a direct response to concerns expressed by the noble Baroness, Lady Noakes, that insufficient reporting requirements are placed on banks taken into temporary public ownership. As I have stated previously, there are numerous ways in which the Government are accountable to Parliament on their role with regard to banks in temporary public ownership. Parliament can already request Treasury Ministers to report on the activities of a bank in temporary public ownership whenever it wishes, including, should it so desire, on a more-than-annual basis. Furthermore, as I made clear in an earlier debate, all the usual accounting and reporting requirements under the Companies Act 2006 will apply to banks in temporary public ownership. However, having reflected on the matter, the Government are persuaded that it would be helpful to have an express requirement to produce a report on the activities of a bank in temporary public ownership. Therefore, I have brought forward Amendment 60, which I believe has the same effect as that brought forward by the Opposition in Committee. I should note that this reporting requirement includes banks taken into public ownership under a company wholly owned by the Treasury or a nominee of the Treasury. The noble Baroness, however, seeks to amend the Government’s amendment by extending it to banks taken into temporary public ownership under the Banking (Special Provisions) Act 2008. Of course it is hard to disagree with the principle behind the noble Baroness’ amendment, but I believe that such an addition in this Bill is neither necessary nor desirable. It is right that the Banking Bill requires reporting on activities taken under the powers within it, but I do not believe that the requirement should extend back to powers exercised under the Banking (Special Provisions) Act. For that reason, the amendment is not appropriate. However, I said that I agreed with the intention behind it. The Treasury has demonstrated its commitment to sharing information on the important matter of the activities of banks in temporary public ownership; for example, the publication of the business plan for Northern Rock and the publication of its accounts. For that reason, the noble Baroness’s amendment is unnecessary. On the ““shadowy”” UKFI, we will publish a framework document for UKFI in due course, which will set out much more information on that body. However, we have already explained why it is being established, particularly its role and objectives. On the issue of there being no requirement in the Banking (Special Provisions) Act 2008 for reporting on Northern Rock, as I have said, Northern Rock has already demonstrated its openness through publishing its annual report and accounts in April 2008, six monthly trading statements and its half-yearly results in October 2008. On the noble Baroness’s question about guarantees, contingent liabilities have to be declared in departmental accounts, in line with general public accounting principles. In cases where confidentiality is required in the public interest, the report is made to the chair of the Public Accounts Committee and relevant Select Committee. On that basis, the noble Baroness’s amendment is unnecessary, and I invite her withdraw it.