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The preference shares in Northern Rock, given that they are preference shares, rank ahead of all the ordinary shares, including the ordinary shares to which the foundation trust shares will be converted through the transfer order. Oblique reference is made in the order to the preference shares, but I would ask the Chief Secretary, even in the few minutes remaining in our debate, to help us to determine whether in the compensation payments made to shareholders of Northern Rock, if there are
any, the Government will observe the traditional capital ranking rights of securities and ensure that preference shareholders are paid out in preference to ordinary shareholders. I am not sure whether she is able to give us that assurance now. I am more than willing to give way to her [Interruption.] She indicates that she is not in a position to do so, so perhaps she will be kind enough to write to me [Interruption.] Once again, she is not indicating either way.
Mr. Dunne: She will be happy to write to me about that. I am very grateful because the issue is causing concern outside this place. Given the lack of information about how the Government intend to implement the transfer order and compensate shareholders if any compensation is due, if the Government choose to ignore the standard ranking of securities, it will blow another hole in the confidence of financial institutions in the Governments respect for the ordinary workings of the market. I am not arguing that preference shareholders should necessarily receive anything, as that will come down to a judgment on what compensation should be paid at all; but if any compensation is due, it is due first to the preference shareholders, and if that does not happen, I would urge the Chief Secretary to think very carefully, as it will raise ripples right across the financial sector. The House will be pleased to hear that that brings me to my final point.
My right hon. Friend the Member for Wokingham asked a question about the business plan objectives that are set out quite succinctly in the annual report, both in the executive chairmans statement and in the operating financial review, where the companys objectives are referred to as, first, the repayment of the Bank of England debt; secondly, the release of Her Majestys Treasurys guarantee; and, thirdly, a successful return of the company to the private sector. Where within those objectives sits the priority donation out of incomeby the way, the company is generating none at the momentof £15 million to good causes? Of course, we would all like to give plenty of money to good causes, but it is not within the companys objectives. The company is not generating a profit at the moment, so out of what pot of reserves will it make such a payment for 2007 and subsequent years if profits are not made?
Mr. Henderson: Perhaps the hon. Gentleman could make it clear whether the Conservatives position is that those moneys should not be made available to the Northern Rock Foundation. If so, does he recognise the consequences for many causes in the north-east? Does he also recognise that making those contributions might well be a pretty clever marketing stroke on behalf of Northern Rock, on whichever constitutional basis it is formedcurrently under the public sector?
Mr. Dunne: I understand the hon. Gentlemans enthusiasm for spending money in his region, but that is not the point. I am trying to make a point not about whether a company should distribute money that it does not have, but about the fact that the Government have made a determination that Northern Rock, which is being nationalised and is owned by the Government, will make that paymentbut from where? It must come from the taxpayer in the first year, because the company is not generating the profit that it would have distributed under the previous arrangements.
In conclusion, I urge the Chief Secretary to think again, before we vote on this issue, about whether or not the Government are really in a position to allow taxpayers money to be put at risk in the way that they have. I urge her to think again about the prospect of introducing a banking reform proposal that would have allowed an orderly administration to take place under Bank of England supervision, which is what will happen if another bank gets into difficulty next time.
Mr. Hoban: We have had a very full debate on the order. I was a little disappointed in the Chief Secretarys speech. I expected that she would set out very clearly the rationale for the Government nationalising Northern Rock, that there would be some substance to her arguments and that we would not have to rely on the vague assertions that this represents a better deal for the taxpayer, without some information to prove that that was so. She gave us no comfort on the quality of assets that the taxpayer will acquire. Northern Rocks payment ratios are deteriorating faster than those of the industry as a whole. She gave us no comfort that taxpayers would get all their money back. She said that this was the best deal possible, without providing the substance to demonstrate that it is the best deal possible.
On the specific losses that Northern Rock will incur in 2008, 2009 and 2010, despite being presented with the opportunity to give the House the figures, the Chief Secretary sought to avoid giving the House and the taxpayer that information, despite the fact that the Treasury must know what the figures are. The Treasury has access to all the financial information that supports the plan, and I am disappointed that she chose not to share those figures with the House, because that indicates that a significant loss could occur over the next three years. Ron Sandler refers to a substantial loss. The taxpayer would be right to be concerned about their exposure as a consequence of the transfer order before us. The Chief Secretary talks about there being no alternative, but the reality is that the Government have yet to prove the case for nationalisation, have yet to make the substantive arguments that this House deserves to hear, and have yet to be fulsome in disclosure of information about Northern Rocks financial position in their forecasts and projections. They are just hoping that the money will be repaid by 2010. Even Ron Sandler is not giving Northern Rock customers that same degree of assurance.
That is why we will pray against the order. We believe that the taxpayer has been exposed to significant risk as a consequence of the way the Government have handled the fallout from Northern Rock, and the Northern Rock situation over the past six months. The taxpayer deserves better answers than they have had tonight from the Chief Secretary.
It being one and a half hours after the commencement of proceedings, Mr. Deputy Speaker put the Question , pursuant to Standing Order No. 16 (Proceedings under an Act or European Union Documents) and Order [26 March.]
That the draft Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2008, which was laid before this House on 20th February, be approved.
That the draft Companies Act 2006 (Consequential Amendments etc) Order 2008, which was laid before this House on 27th February, be approved.
That the draft Sex Discrimination (Amendment of Legislation) Regulations 2008, which were laid before this House on 6th March, be approved. [Steve McCabe.]
Frank Cook (Stockton, North) (Lab):
Being cognisant of the need for brevity as there is an important Adjournment debate to follow, I shall simply tell the House that the
petition I seek to present this evening relates to the Perry family of Thorpe Thewles in my constituency. Mr. Perry went to South Africa many years ago and met Karen, his current wife. Having married, they had three sons and after many years Mr. Perry repatriated himself to this country, took up a secure job and established a home in Thorpe Thewles, and was joined by his wife who, sadly, did not take care of her travel documents and was then considered to be out of time as far as immigration status is concerned. This is an example of the triumph of bureaucracy over common sense or the formulation of arid regulation without any degree of human compassionor perhaps if Mrs. Perry had been born fleet of foot and had expressed a wish to represent England in the Olympics and change her name to Zola Budd, it might not have been necessary for me to present this petition.
Wherefore your Petitioners pray that your Honourable House urges the Government to reflect over the case of the Perry family and allow Karen Perry to enjoy legal status within the United Kingdom and enjoy family rights as should her sons and husband.
David Davis (Haltemprice and Howden) (Con): The outcome of this debate will decide whether an elderly constituent of mine, Betty Phillips, will spend her remaining years supported by the love and care of her daughter and granddaughter or separated, lonely and at risk.
The issue that I wish specifically to address is the prospective deportation of Deborah Phillips, the daughter of my constituent, Betty Phillips. That deportation is a matter of weeks away if the Minister does not use his powers to act. Let me start by describing Deborah and how she came to be in the position she is in today. The story starts when Betty, Deborahs mother, falls in love with a sailor in the US navy, a world war two veteran, when he is on shore leave in Hull. They then get married, and go to live in America, where they live on a variety of military bases. Deborah was born in 1959 and her brother David was born in 1962. In 1963, the family returned to Hull. Mr. Phillips, who was an American citizen, got indefinite leave to remain in the UK, as did their children, and he took a job at the university, where he stayed until he retired in 1992.
Deborah grew up in, and was educated in, Hull from the age of three. After leaving school, she worked in Hull city councils offices until she was 21. She then joined the US navy, where she remained until she retired. Her US navy record always showed her home address as England. During the period between 1981 and 1990, on returning to the UK her passport was variously stamped first, Indefinite leave to remain and then, Allowed to enter for six months. She wrongly assumed the latter to be a mistake. That was an error on her part, but one that was encouraged when her new passport in 1990 was once again stamped, Indefinite leave to remain. She knew that she would have to get the stamp issue resolved, but assumed that that would be a simple administrative issue. She had never had any trouble returning to England, and, despite her American citizenship, thought of herself as English. That is hardly surprising, given that she had grown up in England. The issue did not strike her as importantwrongly, of course.
It is true to say that at that point the needs of her parents were not pressing, but in 2003, her father was diagnosed with Alzheimers disease and she returned home to Hull to help her mother care for him. By then, she had a daughter of her ownAlexandra. Deborah helped her mother to nurse her father until he died. After he died, the family went on holiday together to Corfu in June 2005. On re-entering the UK, she was told that she did not have leave to remain and that she had two months to rectify the problem. She was told at that point that indefinite leave to remain ceases after two years outside the UK, but she had been provided with no previous advice on this either from the Home Office or at any time after she had re-entered the UK.
From that point on, Deborah started a series of applications to obtain indefinite leave to remain in the United Kingdom, the first of which was in August 2005. She was told that it would take three weeks, but
instead it took seven months. As the Home Office retained her passports, she was also unable to return to America to bury her fathers ashes in Arlington national cemetery. At the end of the seven months, her application was refused and she was told to leave the country.
Deborah made her second application from America, and then returned to Britain to return her child Alexandra to the school in Hull to which she was accustomed. After that application failed, she and her daughter were in effect deported. Her third application was also turned down. She stayed in America between May 2006 and June 2007, where she and her daughter lived from motel to motel. They had no particular place in which to live. Her mother, Betty, had to go out to America in July 2006 for a surgical operation because she had nobody to look after her here in Britain. In June 2007, Betty fell ill with a series of mini strokes and so Deborah rushed back to the UK on a military flight.
Let us be clear that Betty Phillips is 80 years old, and although she is a robust Yorkshire lady in many ways, she is physically very frail, and is in constant need of help. As each month passes she, of course, grows more fail. From Deborahs arrival in Britain last year, there have been a series of stays of deportation, the latest of which runs out in some weeks time. We are now in a position where a daughter of my constituent, who received her entire education in Hullwhose own daughter is more used to English education than any otherand who wants simply to care for her mother is on the brink of being deported. She will not be a burden on the state, because she has a pension from the American navy. She is indeed likely to save the state money, as she will be looking after her mother, who would otherwise be dependent on state care. She will create no housing pressure, because she will stay with her mother. Most importantly, her mother would not have to face the emotional agony of having her daughter and granddaughter wrenched away from her at a fragile time of her life.
Frankly, if I wanted to score easy political points it would be too simple. I could ask why Deborah is being wrongly deported, in my view, when the Government cannot deport Muktar Ibrahim, the 21/7 bomber, or Mustaf Jamma, who has been charged with the murder of Sharon Beshenivsky. I could ask why Deborah has to be deported when the murderer of Philip Lawrence cannot be. I could list rapists, murderers and terrorists galore whom we cannot deport, while the daughter and carer of my 80-year-old constituent cannot stay.
Those questions were certainly put to me by Mrs. Betty Phillips, and they are questions for which I have no answer. I do not want to score political points. I have a great deal of respect for the Minister and I simply want a civilised answer that prevents this terrible prospect for Mrs. Phillips. I suspect the Minister is as conscious as I am that, whatever the technicalities, Deborah Phillips is a victim of a weakness in the law that means that someone born of a British father before 1961 has a right to citizenship, but someone born of a British mother at the same time does not have that right. That morally dubious distinction arises, I believe, from a mistake in the legislation.
The British Nationality Act 1981 was amended by the Nationality, Immigration and Asylum Act 2002, which inserted new section 4C to correct an historical
wrong and an historical discrimination. The discrimination that the amendment sought to correct was that before 1983 legitimate children born to a British mother and foreign father would not become British citizens by descent through the maternal line, whereas if they were born abroad to a father of British descent and a mother who was a foreign national, they became a British citizen by descent through the paternal line.
Unfortunately for Deborah, the new law to correct the discrimination, that is section 4C of the 1981 Act, was limited to children born after 7 February 1961. Deborah was born on 5 November 1959. Therefore she still does not benefit from Parliaments intention to correct the historical wrong. The issue is even more profound in her case, as her brother, David Phillips, who was also born in the US, was born on 20 March 1962 and therefore qualifies to register as a British citizen. The law therefore discriminates between Deborah and her brother, even though they have the same parents, were born in the same place, and were born only two years and four months apart. That is ludicrous.
A further policy consideration arises from the case. There will not be a large number of people in the same situation as Deborah Phillips, but a high proportion of those who are will have parents who are entering an era of frailty as they enter their 70s, 80s and even 90s. Those parents need support from their adult children.
My request to the Minister is straightforward. First, in the legislation that he is due to introduce to the House, will he please review the operation of the law to correct the anomaly? Secondly, since any change in the law will be too late for Deborah, will he use his discretion to allow Deborah Phillips to stay in the United Kingdom? That is acutely necessary in this case at this time, since a change in the law that comes into effect tomorrowin fact, in precisely 17 minutesmeans that if Deborah has to leave the UK, she will not be allowed back in for 10 years, as far as I can tell, under any circumstances. That means that she will not be allowed even to visit her mother, whatever the circumstances, because the effect of the law is mandatory. So, no matter how ill her mother is, no matter what goes wrong, no matter what the circumstances, Deborah will not even be able to visit her.
I repeat that my request is straightforward. We all like to claim that our preferred immigration policy is both firm and fair, but both parts are important. Policies should be both firm and fair. Let the Minister demonstrate today that he believes that too, and prevent Mrs. Betty Phillips from having to live out the latter stages of her life in loneliness and unhappiness, forcibly separated from her daughter and granddaughter by a law that was simply not thought through properly.
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