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The noble Lord said: I also seek to declare my interest as having been the Cabinet Minister for Public Service who introduced the Code of Practice on Access to Government Information which now forms part of the Freedom of Information Act, which is what this amendment is all about. The Government should have nothing to fear from the truth, but they have chosen to shroud this whole issue in secrecy. The public does indeed have a right to know, but the Government’s response is to run precisely in the opposite direction. I hope that the purpose of this

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amendment is clear. The draft order that the Government intend to make under Clause 3 contained a small clause, very near the end, exempting a nationalised Northern Rock from being affected by the Freedom of Information Act 2000. I was greatly heartened, the Minister will be alarmed to hear, by his words earlier today. He said that the Government have nothing to hide. Admittedly, he was saying that in a different context, but I just want to hear him say that again in accepting this amendment.

I am slightly pessimistic as the Minister touched on this subject in the course of his winding-up speech late yesterday evening, when I heard him give two reasons, as indeed did the Prime Minister at Prime Minister’s Questions in the other place. The first and most extraordinary argument, which I heard from both of them, is that the exemption is needed to protect commercially sensitive information about Northern Rock’s business plan. Of course it would be inappropriate to release just that sort of information. Surely, however, the Minister knows as well as I do that Section 43 of the Freedom of Information Act contains three subsections. Subsection (1) exempts,

Subsection (2) exempts,

Subsection (3) provides that the obligation under Section 1(1)(a)—to confirm or deny that the requested information is held—does not arise. The Government therefore have nothing to fear so far as that is concerned. The Treasury always seeks to protect itself from private companies that attempt to use the Freedom of Information Act to gain competitive advantage. Why would Northern Rock be any different?

The Minister also made the case that since no other bank is subject to the Act, Northern Rock should not be either. Well, to that argument I think the whole Chamber would immediately point out that no other bank is owned by the taxpayer and run by the Government. Northern Rock will be unusual among British banks in many ways. It is the very uniqueness of a nationalised Northern Rock that makes it imperative that there is sufficient transparency and accountability over its operations. Northern Rock will indeed be a special case; its directors’ salaries and bonuses will be paid out of taxpayers’ funds. That raises crucial questions of accountability. Is the Minister really saying that he does not believe that the public have, for example, a right to know how much they are paying a director to run their bank for them or how much he is being given in bonuses? It is bad enough that a serious regulatory failure has brought us to the pretty pass in which we now find ourselves.

I am in an unusual position in that I agreed this morning with every word written by Peter Riddell in the Times. It was a bit of a shock over breakfast. He said:



21 Feb 2008 : Column 317

He was challenging this noble House to amend the Bill in, I believe, the way in which I am now suggesting. Had there been greater openness and more effective scrutiny in the first place, we would not be here today debating this extraordinary and anachronistic measure. Ministers and their proxies have sadly fallen asleep on the job once; they can hardly blame us for wanting robust systems in place to ensure that they do not do so again. I beg to move.

Lord Newby: I support the amendment. I very much agree with all the arguments put forward by the noble Lord, Lord Hunt of Wirral.

The principle of the freedom of information regime is that when one has a public body, it operates under a different rule with regard to the openness with which taxpayers can approach it and find out what it is up to. Although Northern Rock is a bank rather than a government department, it is a publicly owned body—or will be from tomorrow. That is the basic principle. The starting point in our mind is that it should fall into line with all the other bodies that are covered by the freedom of information legislation, not least those that operate in the commercial sector, including, for example, the Royal Mail.

The noble Lord, Lord Hunt, dealt with two of the arguments that the Government have used to try to rebut proposals in this regard. He dealt comprehensively with the argument about material that is in commercial confidence. Ministers use two phrases to try to get out of holes that are of their own making: one is sub judice and the other is in commercial confidence. It is common practice in my experience for these phrases to be bandied about by Ministers who are in difficulty as a way of trying to shut down debate and to prevent information being put into the public domain or discussed. In this case, the argument about commercial confidence has been completely dealt with by the noble Lord, Lord Hunt, when he talked about the trade secret exemption in the legislation.

The other argument that Ministers have used about Northern Rock and why it is different from, for example, those other public bodies that operate commercially, is that it will go back into the private sector. Yes, it will do that, and when it does there will be legislation to enable it to do so. At that point, the application of the freedom of information legislation will no doubt be extinguished. The fact that it will go back into the private sector at some point is not, frankly, an argument for not applying the freedom of information regime to the bank when it is in the public sector. For those reasons, we support the amendment.

Lord Forsyth of Drumlean: Perhaps I should make it clear, as I did last night, that I have every sympathy with the Minister. In making the following remarks, I mean nothing against him personally. The Government are in a pretty shoddy position. We have asked for information—I have asked him repeatedly to confirm the position in respect of Lloyds TSB, and he has refused point blank to answer; and I have asked him to provide information about the reports and advice that were given to Ministers by Goldman

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Sachs and other investment banks, but he refused to do so. In those circumstances, this amendment is of absolute importance. One is left wondering why on earth, uniquely, Northern Rock would want to be in a position—as the noble Lord indicated, this may already apply to the Post Office, and I think that I am right in saying that it also applies to the National Savings Bank—

Lord Hunt of Wirral: Yes it does.

Lord Forsyth of Drumlean: I am grateful to my noble friend.

What is it about Northern Rock, other than that it will pay higher interest rates than National Savings to depositors, that makes it uniquely placed to be not covered by the freedom of information legislation?

What is remarkable about this is that it is coming from a Government who boast about their commitment to open government and transparency. It is an extraordinary thing. Perhaps I am just getting old and cynical but I think that there must be something that the Government do not want us to know. Given the scale of the operation—taking on to the Government’s balance sheet £100 billion of liabilities and £25 billion of cash extended—it is extraordinary that the Government should expect taxpayers to stump up and not get the information. I therefore support my noble friend in this amendment. I am deeply shocked that this Government of all Governments should be resisting this. Perhaps the Minister will have changed his mind; I hope so. I remember what the Prime Minister said on taking office. He talked about increasing the accountability and transparency of government. If this is an example of him delivering on that promise, it is no wonder that the electorate have begun to hold our institutions and our political process in contempt.

Lord Davies of Oldham: I have no difficulty replying to this amendment; nor do I enlist sympathy from the House—certainly not after the contribution of the noble Lord, Lord Hunt. After all, he accused me last night of saying exactly what the Prime Minister had said before. That is an accusation that I can bear with a certain degree of equanimity and I am prepared to repeat the position again today. What the Prime Minister was expressing at that time and what I hope to repeat as accurately today is the Government’s carefully considered position on this matter. Of course we take freedom of information seriously.

By the by, the noble Lord, Lord Forsyth, continually berates me about the Lloyds TSB submission last September as some kind of constraint on my part to be secretive, but I have given him all the information that I can give him. Lloyds TSB came along with a suggestion of how £30 billion of public money could be made available for a particular project with which it would be involved. We did not think that that had a chance of coping with any issue with regard to state aid. As the proposition was put in those general terms, we were not able to respond positively. I am not sheltering under freedom of information because that is all the information that I have and I have given it to

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the noble Lord on repeated occasions. He cannot keep questioning me about the same issue.

What he can keep asking me about—as he rightly did—is the desirability of the Freedom of Information Act applying to this company. I pay tribute to the noble Lord, Lord Hunt, for his record on freedom of information and his contribution in the past, but he will recognise that the Labour Administration is duly proud of the 2000 Act, which has produced enormous benefits to the public.

2.30 pm

Lord Hunt of Wirral: If that is so, why are the Government leaping to exclude Northern Rock?

Lord Davies of Oldham: The noble Lord will be the first to recognise that areas of the Freedom of Information Act do not obtain across parts of the public sector—I do not need to innumerate them because the House is well versed in the areas where the Freedom of Information Act does not apply and we are merely presenting the case that Northern Rock fits into such a category. He suggested that banks are exempt under Section 43 of the Act, but that is not an absolute exemption. In applying for an exemption, Northern Rock would need to balance the public interest in maintaining the exemption under Section 43 with the public interest in disclosure. Is a bank meant to be involved in this calculation of where it fits with regard to the Freedom of Information Act? Other banks do not have to, because it is automatic, but Northern Rock would have to make an assessment of what its obligations were in those terms. That would be difficult given the fact that we are seeking to ensure that this bank operates as far as possible like all other commercial banks.

It has been suggested that, with its degree of public responsibility, this bank is in the same position as National Savings, but that is an executive agency of the Chancellor of the Exchequer. It is an entirely different body corporate. I want to emphasise that this bank is also meant to be in public ownership for a short period of time—a temporary concept. National Savings, whatever else it is, is not meant to be in existence on the basis of the short-term relationship with government.

The arguments underpinning the amendment do not hold up against that background. They would do if the Government were, as the noble Lord, Lord Forsyth, continues to suggest, bent on excessive secrecy with regard to all these relationships. We are not. We are committed to the Freedom of Information Act. We are committed to the application of the Act where it benefits the public. But some areas are excluded and our case is that Northern Rock needs to be one of them.

We want Northern Rock to run like other commercial banks: at arm's length from the Government. We want, as far as possible, business at Northern Rock to be on that basis. The bank will not perform a public function that would make it appropriate to apply the Act. This is not a matter to which the Government are determined to keep information confidential, because

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we enjoy the fact that the Freedom of Information Act will provide for the nation the necessary facts on the operation of Northern Rock. The Treasury, under its framework document, intends to develop effective plans for appropriate publication of reporting information on Northern Rock. That is the basis on which appropriate public scrutiny of Northern Rock can be made. The Treasury is governed by the Freedom of Information Act and will be obliged to make this information public. That is why I deny the concept that the noble Lord is putting forward: that somehow the Government are being excessively secretive about these arrangements.

Maintaining commercial disciplines in Northern Rock and ensuring continuity of business are absolutely critical. If we are to maintain the prospect that this bank will be returned to the private sector as soon as possible, it is vital that we do not apply inappropriate public sector requirements which do not obtain to other commercial banks. The noble Lord, Lord Newby, was dismissive about commercial confidence, but there are good reasons why commercial banks have an exemption under the Freedom of Information Act. That was accepted by both Houses when it was debated. Commercial confidence is not a get-out phrase: it is a real issue with regard to the operation of the bank.

I am not against the principle behind the amendment, but the amendment is unnecessary. The Treasury is a public authority subject to the Freedom of Information Act. The Treasury's relations with Northern Rock as shareholder and lender will be in the public domain. There will be opportunities on later amendments for me to dwell on this, but I have already mentioned the process by which the Treasury intends to make these relationships explicit and how it reports to both Houses of Parliament. As I indicated, that is what we intend to do with certain crucial formative aspects with regard to Northern Rock.

The objectives of the Freedom of Information Act can be met by request to the Treasury about its relationship with Northern Rock. The Treasury would need to consider applications under the Freedom of Information Act in the normal way, including the application of exemptions. But the Treasury continually faces that position. The Treasury is part of a Government committed to open information, supported and promoted by the Freedom of Information Act. I am not saying that the noble Lord’s intention is not benign or helpful, but that the amendments are unnecessary because the Government intend to fulfil the requirements of openness in the proposals that we make.

Lord Hunt of Wirral: I am very grateful to the noble Lord, Lord Newby, for making some very telling points in support of the amendment. One of the sad things about Hansard is that it never reflects body language, or however one expresses it. I found the Minister’s response exceedingly interesting because, looking at him really closely, I could see that the longer he went on, the less he really believed in the case he has been told by the Chancellor and the Prime Minister to put forward. I thought my noble friend Lord Forsyth, who I am delighted to work in tandem with again as we did at the Department of Employment, shot a hole in the Minister’s argument by saying that

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of course it applies to National Savings, the Tote, the Royal Mail. The Minister then desperately tried to find some argument against that. I do not think he believes what he is being asked to say and I hope the House will support me. I wish to test the opinion of the Committee.

2.40 pm

On Question, Whether the said amendment (No. 8) shall be agreed to?

Their Lordships divided: Contents, 164; Not-Contents, 133.


Division No. 3


CONTENTS

Addington, L.
Alderdice, L.
Allenby of Megiddo, V.
Alton of Liverpool, L.
Anelay of St Johns, B. [Teller]
Ashcroft, L.
Attlee, E.
Baker of Dorking, L.
Barker, B.
Bell, L.
Bilimoria, L.
Blackwell, L.
Bonham-Carter of Yarnbury, B.
Boothroyd, B.
Bottomley of Nettlestone, B.
Bradshaw, L.
Bridgeman, V.
Brittan of Spennithorne, L.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Burnett, L.
Butler-Sloss, B.
Byford, B.
Caithness, E.
Campbell of Alloway, L.
Cathcart, E.
Chadlington, L.
Chidgey, L.
Chorley, L.
Clement-Jones, L.
Colwyn, L.
Cope of Berkeley, L.
Cotter, L.
Courtown, E.
Craigavon, V.
Crathorne, L.
De Mauley, L.
Dean of Harptree, L.
Denham, L.
Dholakia, L.
Dixon-Smith, L.
D'Souza, B.
Dundee, E.
Dykes, L.
Eccles, V.
Eccles of Moulton, B.
Eden of Winton, L.
Elliott of Morpeth, L.
Elton, L.
Falkner of Margravine, B.
Feldman, L.
Ferrers, E.
Finlay of Llandaff, B.
Fookes, B.
Forsyth of Drumlean, L.
Fraser of Carmyllie, L.
Freeman, L.
Garden of Frognal, B.
Gardner of Parkes, B.
Geddes, L.
Glasgow, E.
Goodhart, L.
Goodlad, L.
Greengross, B.
Hameed, L.
Hamilton of Epsom, L.
Hanham, B.
Harris of Richmond, B. [Teller]
Hayhoe, L.
Henley, L.
Hodgson of Astley Abbotts, L.
Hogg, B.
Hooper, B.
Howell of Guildford, L.
Hunt of Wirral, L.
Inge, L.
Inglewood, L.
Jenkin of Roding, L.
Jones of Cheltenham, L.
Kalms, L.
Kilclooney, L.
Kingsland, L.
Kirkwood of Kirkhope, L.
Laird, L.
Lamont of Lerwick, L.
Lang of Monkton, L.
Lawson of Blaby, L.
Leach of Fairford, L.
Lee of Trafford, L.
Linklater of Butterstone, B.
Livsey of Talgarth, L.
Lucas, L.
Luke, L.
Lyell of Markyate, L.
McAlpine of West Green, L.
McColl of Dulwich, L.
MacGregor of Pulham Market, L.
Maclennan of Rogart, L.
Mancroft, L.
Mar and Kellie, E.
Marlesford, L.
Marsh, L.
Mayhew of Twysden, L.
Miller of Hendon, B.
Molyneaux of Killead, L.
Monson, L.
Montrose, D.
Morris of Bolton, B.
Murphy, B.
Naseby, L.
Neuberger, B.


21 Feb 2008 : Column 322

Neville-Jones, B.
Newby, L.
Northesk, E.
Northover, B.
Norton of Louth, L.
Oakeshott of Seagrove Bay, L.
O'Cathain, B.
Park of Monmouth, B.
Patten of Barnes, L.
Pearson of Rannoch, L.
Perry of Southwark, B.
Plumb, L.
Razzall, L.
Rennard, L.
Ripon and Leeds, Bp.
Roberts of Conwy, L.
Roberts of Llandudno, L.
Roper, L.
Ryder of Wensum, L.
St. John of Bletso, L.
Sanderson of Bowden, L.
Scott of Needham Market, B.
Seccombe, B.
Selborne, E.
Selkirk of Douglas, L.
Sharman, L.
Sharp of Guildford, B.
Shaw of Northstead, L.
Shutt of Greetland, L.
Skelmersdale, L.
Slim, V.
Steel of Aikwood, L.
Stevens of Ludgate, L.
Stewartby, L.
Strathclyde, L.
Swinfen, L.
Taverne, L.
Taylor of Holbeach, L.
Tenby, V.
Teverson, L.
Thomas of Gresford, L.
Tordoff, L.
Trenchard, V.
Trimble, L.
Trumpington, B.
Tyler, L.
Verma, B.
Waldegrave of North Hill, L.
Wallace of Saltaire, L.
Walpole, L.
Wilcox, B.
Williams of Crosby, B.
Williamson of Horton, L.

NOT CONTENTS

Acton, L.
Adams of Craigielea, B.
Adonis, L.
Afshar, B.
Ahmed, L.
Anderson of Swansea, L.
Andrews, B.
Archer of Sandwell, L.
Ashton of Upholland, B. [Lord President.]
Bach, L.
Bassam of Brighton, L.
Berkeley, L.
Bernstein of Craigweil, L.
Bilston, L.
Boyd of Duncansby, L.
Brett, L.
Brooke of Alverthorpe, L.
Brookman, L.
Burlison, L.
Carter of Coles, L.
Chandos, V.
Christopher, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Cohen of Pimlico, B.
Condon, L.
Corbett of Castle Vale, L.
Crawley, B. [Teller]
Darzi of Denham, L.
Davies of Coity, L.
Davies of Oldham, L.
Dean of Thornton-le-Fylde, B.
Dearing, L.
Desai, L.
Dixon, L.
Donoughue, L.
Dubs, L.
Eatwell, L.
Elder, L.
Elystan-Morgan, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Farrington of Ribbleton, B.
Filkin, L.
Foster of Bishop Auckland, L.
Gale, B.
Golding, B.
Goudie, B.
Gould of Potternewton, B.
Graham of Edmonton, L.
Hannay of Chiswick, L.
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Hattersley, L.
Haworth, L.
Henig, B.
Hollis of Heigham, B.
Howarth of Newport, L.
Howells of St. Davids, B.
Howie of Troon, L.
Hughes of Woodside, L.
Irvine of Lairg, L.
Jones, L.
Jones of Birmingham, L.
Jones of Whitchurch, B.
Jordan, L.
Judd, L.
Kerr of Kinlochard, L.
King of West Bromwich, L.
Kinnock, L.
Lea of Crondall, L.
Lipsey, L.
Lofthouse of Pontefract, L.
McDonagh, B.
Macdonald of Tradeston, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
McKenzie of Luton, L.
Malloch-Brown, L.
Massey of Darwen, B.
Maxton, L.
Mitchell, L.
Moonie, L.
Morgan, L.
Morgan of Drefelin, B.
Morgan of Huyton, B.
Morris of Aberavon, L.
Morris of Handsworth, L.
Morris of Manchester, L.
Newcastle, Bp.
Patel of Bradford, L.
Paul, L.


21 Feb 2008 : Column 323

Pendry, L.
Plant of Highfield, L.
Prys-Davies, L.
Quin, B.
Radice, L.
Ramsay of Cartvale, B.
Rea, L.
Rendell of Babergh, B.
Richard, L.
Rooker, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B. [Teller]
Sawyer, L.
Scotland of Asthal, B.
Simon, V.
Snape, L.
Soley, L.
Stone of Blackheath, L.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Thornton, B.
Tomlinson, L.
Turnbull, L.
Turner of Camden, B.
Uddin, B.
Vadera, B.
Wall of New Barnet, B.
Warner, L.
Warwick of Undercliffe, B.
Watson of Invergowrie, L.
Wedderburn of Charlton, L.
West of Spithead, L.
Whitaker, B.
Whitty, L.
Wilkins, B.
Williams of Elvel, L.
Woolmer of Leeds, L.
Young of Norwood Green, L.
Young of Old Scone, B.

Resolved in the affirmative, and amendment agreed to accordingly.


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