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| Government suffers Rock defeats | Government suffers Rock defeats |
| (31 minutes later) | |
| The government has suffered defeats in the House of Lords over parts of its plans to nationalise Northern Rock. | The government has suffered defeats in the House of Lords over parts of its plans to nationalise Northern Rock. |
| Peers have voted for an independent audit of the bank's books within three months, followed by annual checks. | Peers have voted for an independent audit of the bank's books within three months, followed by annual checks. |
| They also voted against plans to exempt the bank from Freedom of Information laws and to have regular assessments from the Office of Fair Trading. | |
| Once peers finish debating the bill it will return to the Commons, where any changes by peers will be considered. | |
| Ministers can choose to accept these, or to reject them and send the bill back to the Lords. | |
| A key battleground could be Conservative and Lib Dem peers' decision to defeat the plan to exempt Northern Rock from Freedom of Information laws. | A key battleground could be Conservative and Lib Dem peers' decision to defeat the plan to exempt Northern Rock from Freedom of Information laws. |
| There is no public interest involved here - it is not as if we are short of mortgage-lending institutions in this country Lord LawsonEx-chancellor What is Granite? | There is no public interest involved here - it is not as if we are short of mortgage-lending institutions in this country Lord LawsonEx-chancellor What is Granite? |
| If and when the bill completes its Lords stages - which could be as late as 2000 GMT - it will return to the Commons. | If and when the bill completes its Lords stages - which could be as late as 2000 GMT - it will return to the Commons. |
| MPs will then decide whether to accept any Lords amendments and vote through the bill, or to reject them and prompt a session of Parliamentary "ping-pong" (where the measures bounce between the Commons and Lords). | MPs will then decide whether to accept any Lords amendments and vote through the bill, or to reject them and prompt a session of Parliamentary "ping-pong" (where the measures bounce between the Commons and Lords). |
| Ex-Conservative chancellor Lord Lawson told peers on Wednesday nationalisation held "grave risks" and it was being done for political reasons. | Ex-Conservative chancellor Lord Lawson told peers on Wednesday nationalisation held "grave risks" and it was being done for political reasons. |
| During the Lords debate, he said the emergency legislation was the "second worst solution" - the worst being to give public subsidies to private buyers. | During the Lords debate, he said the emergency legislation was the "second worst solution" - the worst being to give public subsidies to private buyers. |
| "There is no public interest involved here. It is not as if we are short of mortgage-lending institutions in this country," he said. | "There is no public interest involved here. It is not as if we are short of mortgage-lending institutions in this country," he said. |
| "There are grave risks in keeping it on. There is a greater exposure of the taxpayer than there would otherwise have been and there is the problem of unfair competition." | "There are grave risks in keeping it on. There is a greater exposure of the taxpayer than there would otherwise have been and there is the problem of unfair competition." |
| Explaining why he believed Northern Rock should not be exempted from Freedom of Information laws, Conservative spokesman Lord Hunt said "the government should have nothing to fear from the truth". | Explaining why he believed Northern Rock should not be exempted from Freedom of Information laws, Conservative spokesman Lord Hunt said "the government should have nothing to fear from the truth". |
| "The public does indeed have a right to know but the government's response is to run entirely in the opposite direction," he added. | "The public does indeed have a right to know but the government's response is to run entirely in the opposite direction," he added. |
| Earlier Liberal Democrat Lord Newby said his party would seek "to strengthen the accountability of the government and Northern Rock, as appropriate, to Parliament". | Earlier Liberal Democrat Lord Newby said his party would seek "to strengthen the accountability of the government and Northern Rock, as appropriate, to Parliament". |
| The party is demanding an immediate independent audit of Northern Rock and a regular progress report to Parliament, as well as supporting Tory calls to effectively lay before Parliament the bank's business plan and bring it within the Freedom of Information Act. | The party is demanding an immediate independent audit of Northern Rock and a regular progress report to Parliament, as well as supporting Tory calls to effectively lay before Parliament the bank's business plan and bring it within the Freedom of Information Act. |
| 'Deplorable' | 'Deplorable' |
| Lord Newby added: "We contemplate supporting this bill more in sorrow than in anger. | Lord Newby added: "We contemplate supporting this bill more in sorrow than in anger. |
| "We have been alarmed at some of the aspects of the dealings of Northern Rock and some aspects of the way the government has attempted to introduce this legislation." | "We have been alarmed at some of the aspects of the dealings of Northern Rock and some aspects of the way the government has attempted to introduce this legislation." |
| Concerns were also raised about Granite, the Jersey-based trust to which Northern Rock sold £45bn of its most profitable mortgages. | Concerns were also raised about Granite, the Jersey-based trust to which Northern Rock sold £45bn of its most profitable mortgages. |
| It has prompted accusations that the taxpayer will be left with the "rubbish" on the troubled bank's mortgage book, such as loans worth 125% of the value of homes. | It has prompted accusations that the taxpayer will be left with the "rubbish" on the troubled bank's mortgage book, such as loans worth 125% of the value of homes. |
| Lord Lawson said it was "deplorable" Granite was not part of the nationalisation process. | Lord Lawson said it was "deplorable" Granite was not part of the nationalisation process. |
| We have made the decision we have to protect the taxpayers, after having weighed up all the various competing considerations Labour peer Lord Davies Darling defends Rock trustSend us your comments | We have made the decision we have to protect the taxpayers, after having weighed up all the various competing considerations Labour peer Lord Davies Darling defends Rock trustSend us your comments |
| But Lord Davies, for the government, told peers: "Granite, the Northern Rock's securitisation programme, is a special purpose vehicle, a trust, which has no claim on Northern Rock's assets. | But Lord Davies, for the government, told peers: "Granite, the Northern Rock's securitisation programme, is a special purpose vehicle, a trust, which has no claim on Northern Rock's assets. |
| "We are dealing in this bill with Northern Rock and its assets and that is the exposure of the taxpayer." | "We are dealing in this bill with Northern Rock and its assets and that is the exposure of the taxpayer." |
| He said it was necessary to take Northern Rock "into a period of temporary public ownership" adding: "It is important for savers and depositors to be reassured that their money remains secure. " | He said it was necessary to take Northern Rock "into a period of temporary public ownership" adding: "It is important for savers and depositors to be reassured that their money remains secure. " |
| "We have made the decision we have to protect the taxpayers, after having weighed up all the various competing considerations. It was clear that a temporary period of public ownership was the better option." | "We have made the decision we have to protect the taxpayers, after having weighed up all the various competing considerations. It was clear that a temporary period of public ownership was the better option." |