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Banking Bill (Money)

The hon. Gentleman raises an interesting point. He is an ardent advocate of the remutualisation of those building societies that became banks and are now in state control. The amendment tabled by my noble Friend Baroness Noakes provided for a report about the prospects. I can envisage that in a report with that level of detail, the prospects could include some statement about the exit strategy—how the bank emerges from the period of temporary public ownership. Clearly, one of the debates that needs to take place, for which my noble Friend's amendment created a vehicle, is how the Government intend those banks to exit the period of temporary public ownership. I recognise the points that the hon. Gentleman makes. A little more transparency about the exit strategy would be helpful for all of us when thinking about the future of both Bradford & Bingley and Northern Rock. A problem emerges from the lack of transparency that we have seen in the context of, say, Bradford & Bingley, and in the way that the Government's stake in the nationalised banks has been managed. There is very little transparency about the activities of United Kingdom Financial Investments Ltd. I asked the Chancellor of the Exchequer for details of the budget of UKFI. The Minister stonewalled that question in a parliamentary answer, and it is unsurprising that there is then press speculation about the arrangements for UKFI. It is important that the Government are open and transparent about the activities of the nationalised banks. It was a feature of the debate that we had a year ago on the Banking (Special Provisions) Act 2008, particularly in connection with Northern Rock. Although we welcome the fact that the Government have listened again to proposals made in the House of Lords to increase transparency, greater detail about the type of report that we would expect to see would be welcomed in the House this evening. I turn now to amendments 17 and 31. Of the three stabilisation options available to the authorities, two require transfer instruments to be made by the Bank of England. Those are the options relating to a private sector purchaser and a bridge bank. In the case of a bridge bank, a bank can be broken up and property transferred to a new owner, as happened with Bradford & Bingley and Banco Santander towards the end of September last year. If the Bill had been in place then, the Bank of England could have used a property transfer instrument to transfer Bradford & Bingley's branch network to Santander. Of course, there would have been remaining elements of the bank in temporary public ownership until a resolution or exit strategy had been found. Within the bridge bank mechanism there are elements that are similar to nationalisation or temporary public ownership. However, the transfer powers—this was the issue raised in the other place not just by my noble Friend, but by the Delegated Powers and Regulatory Reform Committee—are exercised by the Bank of England without parliamentary approval. The Delegated Powers and Regulatory Reform Committee, when considering those powers, argued that because they were similar to taking a bank into temporary public ownership, their use should be subject to parliamentary approval. In effect, because the original owners are deprived of their property rights, Parliament should approve that. It should not be an action that the Bank can take without scrutiny by Parliament. There was a vigorous debate on that in the other place. The outcome, as reflected in amendments 17 and 31, probably achieves the right balance. A copy of the share or property transfer instrument made by the Bank of England will be laid before Parliament. That will help to increase parliamentary scrutiny. My final remarks relate to amendments 46 to 48 and the use of the word ““subserviate”” in legislation. The Minister seemed to think the word was used in everyday parlance. Perhaps it is used quite often in his constituency, but it is not a word that I had heard until the Bill was presented to me. I checked yesterday whether there was widespread use of the word and Googled ““subserviate””. The first two results referred to an online dictionary, and—surprise, surprise—the next two references were to debates in this House and the other place. Clearly, ““subserviate”” is not a word that is widely understood. When the Minister gave his example earlier, I was not entirely sure it would have been clear in a press release what his relationship was to the Chancellor or to the Prime Minister, but perhaps the Minister does not use such language in the ““Dudley Star”” or whatever the local paper is in his constituency. I welcome the fact that the amendments have been made. The Minister ought to have a word with his noble Friend the Financial Services Secretary about how to concede the point gracefully. I read the debate in the Lords Hansard, where Lord Myners said:"““I do not think that the meaning of 'subserviate' is opaque or confusing. However, concern was also expressed in the other place, where the standards of learning are perhaps not as exceptional as in this House””—[Official Report, House of Lords, 2 February 2009; Vol. 707, c. 541.]" I do not know what it is about Lord Myners, but if there is a Treasury course on tact and diplomacy in dealing with Members of this place, he ought to be the first in the queue. None the less, I am pleased that he listened to the concerns that my hon. Friend the Member for South-West Hertfordshire (Mr. Gauke) expressed in Committee. We shall not oppose this group of amendments.