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I turn to the working-age issues, a significant number of which have been raised. Our aspiration is for a fair and inclusive society that offers greater opportunity and independence for people. The uprating orders move us further towards that. They help tackle poverty and exclusion and ensure security in retirement. In the
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past 10 years, we have made great strides in dealing with poverty and creating greater opportunity. For the first time in this country, we can look forward with greater confidence to full employment, eradicating child poverty and delivering justice to pensioners.

Work is the best route out of poverty and today more people are in work than ever before: 29.4 million people, according to the latest figures—up 175,000 in the past three months. We have the second highest employment rate in the G7. Since 1997, employment has gone up by nearly 3 million; under the Conservative Government it was down by 3 million. Under Labour, employment has gone up in every region and country of the UK. It has gone up in the neighbourhoods and cities neglected by the Conservative party. It has gone up for disadvantaged groups: 300,000 more lone parents, 900,000 more disabled people, 1 million more from ethnic minorities and 1.5 million more older workers are in work. The number of job vacancies remains at 670,000.

I agree with the comments made by the hon. Member for Broxbourne (Mr. Walker) about migration. However, I say to him that although migrants have come to this country to work, there are still 670,000 vacancies, and those are jobs for workers in this country to apply for. There are people on incapacity benefit whom we want to go into those jobs. There is still a demand for employment in this country and we still have a strong economy. The hon. Gentleman made points about some of our media, who tend to make unfair comments that are not acceptable.

Several times, Conservative Members spoke of dealing with child poverty. A target is not a quota but a direction of travel and a measurement of whether we get there on schedule. That may be subject to events and circumstances, which may interfere, but a target tells people where we want to be. Let me be clear that we are sticking to our direction of travel. People know what our ideals, targets, direction and aims are.

Do the Tories have any aims, ideals, targets or direction on poverty? We know what their direction was from their record. Under the Conservatives, child poverty doubled and we had the highest child poverty rate in the industrial world. More than one in four children lived in poverty and the value of child benefit was cut in real terms. That was not the 1930s, but the Tory early 1990s and they have still not learned. They will not pledge to eradicate child poverty; for them, that is merely some vague aspiration. Their policies would push millions back into poverty.

We want to see those policies stopped and to see instead the creation of a fairer society. These orders are part of the process of creating that fairer society—helping pensioners, helping those who need work to find work, and helping those who need benefits to get them. They take us a step closer to providing opportunity to all, and I commend them to the House.

It being Six o’clock , Mr. Deputy Speaker proceede d forthwith to put the Question, pursuant to Order [6 February].

Question agreed to.


Mr. Deputy Speaker then proceeded to put the Question required to be put at that hour.
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Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business),

Question agreed to.


Mr. Deputy Speaker (Sir Michael Lord): With the leave of the House, I will put motions 4 and 5 together.

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Employment And Training

Question agreed to.

Mr. Philip Hammond (Runnymede and Weybridge) (Con): On a point of order, Mr. Deputy Speaker. This afternoon, the other place has been considering in Committee the Banking (Special Provisions) Bill and is sending it back to us with at least eight amendments—possibly more, because I understand that more amendments have been tabled for the Report stage yet to be taken. This House has been allotted only one hour to consider those eight or more amendments, which in the other place were grouped in five separate groups. It is impossible for us properly to scrutinise that number of amendments, or even to vote on all of
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them, in the time allotted. Is there anything that this House can do to override, set aside or amend the business of the House motion that sets that time limit?

Mr. Deputy Speaker: I have noted the hon. Gentleman’s concern, but these rules are laid down by the House and cannot be altered at this time. However, his remarks are on the record, as I am sure he would want them to be.

Mr. Patrick McLoughlin (West Derbyshire) (Con): On a point of order, Mr. Deputy Speaker. I know that the Chair has certain powers to curtail the length of speeches. I wonder whether that power applies to the Lords amendments. Could the Chair impose very narrow time limits so that Members have the opportunity to speak on those amendments, including Front Benchers, and so that the House has time to debate them, or does that not apply to Lords amendments? Might we find that a Minister—I understand this is not just about defeats in the Lords, as there have also been Government amendments to the Bill—takes a lot of time, thereby not allowing a proper debate or even votes to take place in this House?

Mr. Deputy Speaker: I understand the hon. Gentleman’s concern that as many Members as possible should be allowed to contribute. The best advice that I can give to the House is that everybody, Front Benchers and Back Benchers, should exercise some self-discipline.


Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Social Security

Question agreed to.

6.3 pm

Sitting suspended, pursuant to Order [19 February].

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Banking (Special Provisions) Bill

Lords amendments considered.

Clause 6

Transfer of property, rights and liabilities

Lords amendment: No. 1.

7.45 pm

The Chief Secretary to the Treasury (Yvette Cooper): I beg to move, That this House disagrees with the Lords in the said amendment.

Mr. Speaker: With this it will be convenient to take Lords amendments Nos. 2 and 3, and Government motions to disagree thereto, and Lords amendments Nos. 4 to 8.

Yvette Cooper: I thank the Lords for their consideration of the Bill, which has been brought forward in exceptional circumstances. As a result of the consideration by the Delegated Powers and Regulatory Reform Committee, the Government put forward in the Lords a series of amendments to change several orders so that they will be subject to the affirmative resolution procedure. We think that that is the right approach and we therefore accept those Lords amendments.

The Lords passed three amendments with which we wish to disagree and I shall take each in turn. Lords amendment No. 3 is on competition and the role of Office of Fair Trading and—as a result of the consideration both in the Lords and this place—we have had further discussions with the OFT. It may be helpful to inform the House about those discussions.

As we made clear in earlier debates, the Government recognise that we need to ensure that Northern Rock does not enjoy inappropriate or unfair advantages in competition with other banks and building societies. We need to ensure that we are operating in the interests of the taxpayer, but also that we have appropriate competition in the markets.

At EU level, we have been clear that we will need to ensure that the business plan satisfies the EU state aid rules and support for Northern Rock needs to be fully consistent with those guidelines. As we told the House on Second Reading, we will also hold discussions with the British Bankers Association, the Building Societies Association and the Council of Mortgage Lenders before final plans are submitted to the European Commission for state aid approval.

We agreed yesterday that the OFT will publish an annual report assessing any competitive implications of the public support for Northern Rock and, of course, the OFT also has the powers to step in at any time. The OFT is an effective watchdog, overseeing competitiveness in the UK markets. It has wide powers, including powers to investigate whether any market in the UK is distorted by unfair competition. It does not need specific new powers to report on the competitiveness of the banking market. Therefore, there is no need for Lords amendment No. 3, which would be an unnecessary duplication of the OFT’s powers under the Competition Act 1998 and the Enterprise Act 2002, and the European Commission’s
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powers under the EU treaties. The amendment is inappropriate and I hope that the House will disagree with it.

Mr. John Redwood (Wokingham) (Con): Does that mean that the Chief Secretary envisages limiting the attractiveness of the rates that can be offered and charged by Northern Rock by reference to the average of its competitors?

Yvette Cooper: As we have repeatedly made clear, it would not be appropriate for Ministers to take decisions about individual products offered by Northern Rock. It is right that Ron Sandler should put forward his business plan, and that will obviously need to be approved by the Government as the shareholder in Northern Rock. Equally, as part of that process, we need to ensure, as we approve that business plan and have discussions with the EU, that we do not have unfair competition. It may well be that the European Commission will set out particular conditions on Northern Rock’s operation, and, of course, we will have to ensure that Northern Rock complies with them.

Bob Spink (Castle Point) (Con): If the British Bankers Association eventually concludes that the arrangements lead to unfair competition, what redress will it have?

Yvette Cooper: Clearly, the issue will be what the OFT concludes and what the EU concludes. Obviously, we will have discussions with the British Bankers Association, but Northern Rock will need to operate in compliance with UK competition law. It will obviously also have to comply with the EU state aid rules.

We have to remember the underpinning purpose of this intervention, which was to secure the financial stability of the banking system. As we have said previously, it would obviously not be in the interests of other banks or consumers for there to be unfair competition. Equally, it would not have been in the interests of other banks or consumers if Northern Rock had gone under in the autumn and there had been a spread of instability across the banking system. Sometimes I think that hon. Members who raise concerns about this are in fact raising concerns about the fact that Government guarantees have been introduced at all.

We think that it was right to introduce those Government guarantees, because we need to safeguard the stability of the wider banking system as part of the need to promote stability across the board. Therefore, I hope that the House will agree to disagree with Lords amendment No. 3.

I turn next to Lords amendment No. 1, which concerns the independent audit. Clearly, there should be an independent audit of Northern Rock. Indeed, an independent audit is currently under way. Northern Rock’s audited annual accounts will be published, after independent audit, by the end of March. That should give the House and the public information on Northern Rock’s assets and liabilities as part of its balance sheet. Northern Rock will continue to be subject to the requirements of the Companies Act 1985 and the Companies Act 2006. That means that the annual reports and accounts must be independently
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audited and filed with the registrar of companies for public access. We think that that is the appropriate way to conduct the audit.

Mr. Philip Dunne (Ludlow) (Con): Is the Chief Secretary therefore telling us that the audited accounts, which will be published at the end of March, will include the consolidation of the assets and liabilities held within the series of Granite subsidiaries of Northern Rock? If that is the case, will she clarify what she was signally unable to clarify last Tuesday? Will the Government have a call on the assets in the Granite subsidiaries in the event of defaults on its liabilities?

Yvette Cooper: We have set that out repeatedly. Clearly, the accounts will need to be set out in the normal way. The accounts of Northern Rock will need to meet all the ordinary accounting practices. It is right that that should be so. We have also repeatedly made it clear that the Government guarantees apply to Northern Rock and not to Granite. Again, it is right that that should be the case and that is the arrangement that has been set in place.

It is right to think that the appropriate way to conduct the audit is the method I mentioned. To ask the Bank of England to conduct a separate audit would not be appropriate. That is not the Bank’s area of expertise; it is not a professional independent auditor but a central bank. Interestingly, the amendment would not require an independent audit of Northern Rock within three months because it applies to clause 6, whereas the draft order that we have published would be made under clause 3. The amendment would therefore not achieve the intentions of the drafters.

Mr. Alan Beith (Berwick-upon-Tweed) (LD): Does the right hon. Lady recognise that it is the very opacity of conventional accounting that worries people when they are confronted by the existence of operations such as Granite, which did not come to the notice of even quite experienced observers of Northern Rock until a relatively late stage in its life and remains the subject of considerable uncertainty? That is one of the reasons why other forms of audit are being sought.

Yvette Cooper: Many people have raised and discussed issues about Granite on many occasions. If the right hon. Gentleman is pointing to the fact that several people had clearly misunderstood the nature of Granite and changed their understanding yesterday, that is obviously a matter for them. There has been a lot of discussion about the arrangements for Granite; it is a special purpose vehicle—the kind of arrangement that many banks set up—and it is important that its accounting treatment is properly dealt with and is properly transparent in the normal way. The matter has been discussed repeatedly.

Mr. Chris Mullin (Sunderland, South) (Lab) rose—

Jim Cousins (Newcastle upon Tyne, Central) (Lab) rose—

Miss Anne McIntosh (Vale of York) (Con) rose—

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