The government – and taxpayers – will pay for the rushed legislation this week

I have posted the full transcript of the one hour debate we were allowed on Thursday on Northern Rock, because it illustrates just how damaged Parliament has been by the constant use of timetable motions that are unrealistic.

The Lords passed three amendments to Labour’s bank nationalisation Bill. One wanted the Freedom of Information Act to apply to Northern Rock, just as it applies to the rest of the public sector. One wanted a proper audit report on what we are buying, and a third wanted more detail on the competition arrangements. All three were perfectly reasonable requests. They did not seek to prevent the nationalisation of Northern Rock or some other bank. They were well within the spirit of the decision of the Commons to press ahead with nationalisation, taken a couple of days before.

It was clear these amendments would need a few hours of debate. Each one raised very different issues, worthy of a separate debate. Because the government decided to drive it all through in one hour, they ”grouped” all these amendments together, along with some government amendments. The Opposition offered to sit through the night, as urgency was part of the government’s agenda, even though we could not see the need for the urgency. Alternatively the House could have met on Friday again to discuss Northern Rock, and Friday’s business could have been transferred to a day next week. The government refused to co-operate.

As a result we had one hour. The Chief Secretary to the Treasury occupied half of this with her comments. She took a number of interventions. We needed to intervene for two reasons – firstly because she was not explaining her position clearly and convincingly, and secondly because we knew there would not be time for us to make speeches so several of us chose to make one of our points in this less satisfactory way. The Shadow Spokesman kept his remarks much shorter. This allowed Sir Stuart Bell to speak, and the Lib Dem Spokesman got a few minutes at the end. No Conservative backbencher could make a full speech, No Lib Dem backbencher, and only one Labour backbencher. The front benches had no time to return to the debate to deal with points raised by other MPs.

The Conservative government used timetable motions sparingly. We did so if the Opposition had spent many hours on the first clause or amendment to a Bill, and showed every sign of wishing to delay and prevaricate as much as possible. Most Bills went through with time unlimited, so the Opposition could choose what they wished to talk about, how many of them wished to speak, and for how long. It was a much more democratic way, and ensured that all important amendments and clauses were debated. The government benefited from this, because there are times when Parliament – and those who brief us – made important points that led to a modification or improvement of a measure.

Thursday’s performance reminded me just how much Parliament has lost by ruthless timetabling. There were good issues to discuss. Some of us had things to say. The government had not made its case satisfactorily on why we were to be denied access to information on Northern Rock, and why we were buying it without a proper audit report on what we were buying. The lack of time to discuss it was unreasonable.

There will be a cost to the taxpayer. Rushing into this purchase without proper consideration is likely to mean bigger losses and problems for taxpayers ahead. The Lords unfortunately did not sustain their pressure on the 3 points. The Lib Dems decided they agreed sufficiently with the Bill that they did not want to prolong the dispute even for a few more hours. Once they gave in there was no point the Conservative peers continuing, as they did not have the votes.

Sensible Ministers welcome Parliamentary debate, and listen to commonsense points made by others. Ministers who rush legislation through often live to regret it. The nationalisation of Northern Rock is not the answer, but the beginning of a whole series of new and difficult questions for the government. As Parliament was not able to ask them all and have them cleared up satisfactorily, they will now be determined by events. Events can be much rougher for Ministers to handle.

One day we will find out if Northern Rock is now going to be run down, or if there is a way for a nationalised bank to compete fairly and grow its business. One day we will find out if people are going to be sacked and if so how many. One day we will find out what the true profits and losses have been in recent months. One day we will discover how much cash taxpayers have had to put in, and one day we will find out the full extent of the financial arrangements put in place for the public servants at the top of this company. As so much of this is forbidden fruit at the moment for Parliament, the media will find it so much more tempting to pick it.

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8 Comments

  1. apl
    Posted February 23, 2008 at 3:55 pm | Permalink

    JR: ¨Once they gave in there was no point the Conservative peers continuing, as they did not have the votes.¨

    And who do we have to thank for that? Ah yes, Lord Strathclyde, who, in his eagerness to get one over on William Hague, agreed to the expulsion of the Conservative peers from the Lords.

    Reply: Labour were going to evict them anyway. Lord Strathclyde salvaged something.

  2. mikestallard
    Posted February 23, 2008 at 9:24 pm | Permalink

    Thank you very much for your very clear exposition of the problems of nationalising Northern Rock.
    I have read the debate which you published. You are quite right; it demonstrates quite starkly how little discussion and, more important, listening, the government is doing.
    Events will indeed determine the debate as you say.
    Already the staggering sum of £100 billion is at stake. If that were to double, then one third of the government's income would be compromised.
    To ordinary people £100 is a LOT of money. So how can we understand it if parliament is talking of m/billions of pounds? I think that is the reason that Yvette Cooper can get away with it.
    Time – as ever – will tell. And I do not think this government has much longer to run. John Major never made mistakes on this scale.

  3. Mark
    Posted February 23, 2008 at 11:50 pm | Permalink

    Brilliant post. One day, I agree, this country will realise that the nationalisation of Northern Rock is a disaster.

  4. David Cram
    Posted February 24, 2008 at 2:06 pm | Permalink

    JR – Somehow, could you raise the issue of Granite? If allegations are correct, it does seem strange that the good parts of NR were ripped out prior to Nationalisation. Has the taxpayer been treated in a similar way?

    DC

    Reply: We have raised the issue of Granite. There are several Granite companies – and others – that hold mortgages from Northern Rock. there was nothing wrong with this way of financing their growth. Please see my account of how to finance a mortgage bank which tries to explain it.

  5. Bryan Davies
    Posted February 24, 2008 at 8:39 pm | Permalink

    Has anybody looked at the pension fund? Is it in surplus? Will not hold my breath

    Reply: The taxpayer takes on the deficit.

  6. Chuck Unsworth
    Posted February 25, 2008 at 11:20 am | Permalink

    'One day' we'll find out quite a few things – but not if this Government has anything to do with it. Transparency? Anyone care to offer a modern definition?

  7. David Cram
    Posted February 25, 2008 at 10:46 pm | Permalink

    JR – Thank you – I did not look further down your column, so missed the prior article on Granite.

  8. Simon_C
    Posted March 2, 2008 at 11:14 pm | Permalink

    ISTM that the problem is the executive controls in the current system is too powerful. Not only do they propose legislation, they control everything about the way the house discuses it. So, with a large majority, there are no checks and balances.

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    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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