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Banking Bill (Money)

As a Government, we always want to be open and transparent. As an experienced Member of this House, my hon. Friend will know that when we make major decisions as a Government it is normal practice that we report them to Parliament either through an oral statement or a written ministerial statement. The normal financial accountability mechanisms will be considered and will be debated in due course. I assure him that the Government want to be absolutely clear about what we are doing and to explain why we are taking action. We think that it is vital that we should continue to do all we can to ensure the stability of the financial system in the UK. That is why the announcements that the Chancellor made in an oral statement to the House a few Mondays ago showed the normal practice that we would follow. That does not negate the need for other reporting mechanisms to be put in place. As I outlined earlier, the estimates and votes process is long established in this House and provides a means of financial accountability. Let me turn to Lords amendments 75 to 80, which provide statutory cover for expenditure incurred in connection with schemes run by Government Departments other than the Treasury. They do that by providing statutory cover for schemes where the financial assistance being provided will both facilitate the activities of the bank or financial institution and provide a benefit to a third party, such as customers of banks or other financial institutions, or to the wider economy. Expenditure incurred in connection with schemes such as the home owners mortgage support scheme announced by the Prime Minister on 3 December and the working capital scheme that I announced to the House on 14 January in my capacity as Under-Secretary of State for Business, Enterprise and Regulatory Reform are covered by the provisions. Lords amendment 81 addresses a different issue regarding the provision of financial assistance. As the House will know, the Treasury has made a number of arrangements to support the UK banking sector. They include the credit guarantee scheme for new inter-bank lending introduced in October 2008, as well as the asset protection scheme and guarantee scheme for asset-backed security that were announced on Monday 19 January. Those schemes involve the provision of guarantees or similar financial commitments by the Treasury. Although we hope that there will be no need to make any payments, the Treasury must be in a position to settle promptly any liabilities that arise. Normally, that would be effected by securing parliamentary approval for an estimate, but clearly a need for expenditure might arise at any time, including during a recess when estimates could not be obtained. The amendment addresses that by providing for direct access to the consolidated fund without an estimate in cases where the funds are required urgently. It also provides for parliamentary reporting with suitable safeguards in respect of commercial confidentiality and the maintenance of market confidence.