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Bradford and Bingley plc Compensation Scheme (Amendment) Order 2009

I beg to move the Motion standing in my name on the Order Paper. I will also speak to the Northern Rock plc Compensation Scheme (Amendment) Order as the two draft orders are related. In February 2008, when it became apparent that it would be impossible to achieve a private-sector sale of Northern Rock that would adequately protect taxpayers’ and consumers’ interests, the Government transferred into temporary public ownership all shares in Northern Rock. This transfer was effected using the powers conferred on the Treasury under Section 3 of the Banking (Special Provisions) Act 2008. Section 5 of that Act specifies that, where an order is made under Section 3, the Treasury must make an order providing for a scheme for determining the amount of any compensation payable to former shareholders of Northern Rock and other specified persons. In accordance with this requirement, the Treasury made the Northern Rock plc Compensation Scheme Order on 12 March 2008. The order makes provision for the appointment of an independent valuer to determine the compensation, if any, payable to the former shareholders of Northern Rock and other persons specified in Part 2 of the Schedule to that order. Following a competitive process, the Treasury announced in September 2008 that an independent valuer had been appointed to undertake the valuation exercise. In order to ensure that the valuer is able to do his work efficiently, it is essential that he has the powers necessary to conduct his valuation work. The Treasury made clear in its brief to applicants that it would consider any requests by the valuer for powers additional to those set out in the compensation scheme order, which the valuer considers are necessary for the effective conduct of the valuation exercise. The independent valuer has requested from the Treasury powers to obtain from third parties information reasonably required for the purpose of assessing the amount of any compensation payable. Having considered that request, the Treasury laid in Parliament the Northern Rock plc Compensation Scheme (Amendment) Order 2009, which confers powers on the valuer to apply to the court for an order compelling the production of information by third parties. The court process will enable any persons from whom the information is sought, or to whom the information relates, to make representations to the court as to why the information is not reasonably necessary for the purposes of the valuation exercise. The order makes provision specifying the circumstances in which a person may not be required to provide information—for example, information in respect of which a claim to legal professional privilege could be maintained in legal proceedings. The order also makes it clear that the independent valuer may share information with his staff and advisers, and disclose information if necessary for the purposes of exercising the functions of his office. Information must not be shared more widely without the consent of the persons from whom the valuer obtained the information and to whom the information relates. The valuer must have regard to the need to exclude from disclosure, so far as practicable, certain classes of information, such as commercially sensitive information. The order also specifies that a person who provides information to the valuer for the purposes of the assessment of the amount of any compensation payable is not, by that reason, liable in any proceedings relating to a breach of confidence. As the Committee will be aware, the Treasury has recently commenced the process for the appointment of a valuer to undertake the valuation exercise in accordance with the Bradford & Bingley Compensation Scheme Order 2008, which was made last December. Under that scheme, the valuer must assess any compensation payable to the former shareholders of Bradford and Bingley plc and other specified persons who suffered interferences in their property rights arising as a result of the provisions of the Bradford & Bingley Transfer of Securities and Property etc. Order 2008 The Treasury considers it appropriate that the person appointed as the valuer should have the same powers as the Northern Rock valuer. Therefore, the same powers for information gathering and sharing are conferred on that valuer and are set out in the Bradford & Bingley plc Compensation (Amendment) Order 2009. In addition, it is important to note that Article 3 of the order amends paragraph 5 of the Bradford & Bingley Compensation Scheme Order to make clear it that the independent valuer must assess any compensation payable to any subordinated debt holders who suffer compensatable interferences in their property rights arising from the amendments to Article 6 of the Bradford & Bingley plc Transfer Order, specified in the Bradford & Bingley plc Transfer of Securities and Property etc. (Amendment) Order 2009. I hope that the Committee will agree that it is necessary to confer these information-gathering powers on the independent valuers for Northern Rock and Bradford & Bingley in order to ensure that they can conduct the valuation process effectively and that the valuers may reach their determinations without unnecessary delay. I commend both instruments to the Committee.