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Deadlock over Northern Rock bill Northern Rock bill to become law
(about 1 hour later)
Peers' demands for extra safeguards in the bill to nationalise Northern Rock have been thrown out by MPs. The bill to allow Northern Rock to be nationalised is set to become law, after peers backed down in their demands for extra safeguards.
The Banking (Special Provisions) Bill now returns to peers who must decide whether to insist on their amendments. The Banking (Special Provisions) Bill, which cleared the Commons on Tuesday, ran into opposition in the Lords.
Both Houses could be kept sitting all night as ministers try to get the bill onto the statute book by Friday. But MPs rejected peers' demands for an independent audit, and for the bank to come under Freedom of Information laws.
The Commons rejected peers' amendments calling for an independent audit of the bank and for it to come under Freedom of Information laws. The Conservatives said it was a matter of "deep regret" that ministers had rejected the amendments "out of hand".
MPs overturned calls for an independent audit by 277 votes to 167 and for the bank to be brought under the Freedom of Information Act by 268 votes to 171. The nationalisation package now goes back to the Commons for the final time before it gets its royal assent.
They were kept back beyond the usual Thursday finish time of 1830 in an attempt to try to get the emergency bill approved. If peers had not backed down, both Houses could have been kept sitting all night as ministers were determined to get the emergency bill onto the statute book by Friday.
It paves the way for a session of Parliamentary "ping pong", where measures bounce between the Commons and the Lords. In the Commons MPs overturned calls for an independent audit by 277 votes to 167 and for the bank to be brought under the Freedom of Information Act by 268 votes to 171.
The government should have nothing to fear from the truth Lord HuntConservatives What is Granite?Darling hits back over Rock trustThe government should have nothing to fear from the truth Lord HuntConservatives What is Granite?Darling hits back over Rock trust
A key battleground is Conservative and Lib Dem peers' decision to defeat the plan to exempt Northern Rock from Freedom of Information laws. Conservative and Lib Dem peers opposed the government's decision to exempt Northern Rock from Freedom of Information laws.
In the Commons Treasury chief secretary Yvette Cooper said it would not be right to publish "detailed commercial sensitive information" on Northern Rock and accused the Conservatives of "playing games" over a serious issue.In the Commons Treasury chief secretary Yvette Cooper said it would not be right to publish "detailed commercial sensitive information" on Northern Rock and accused the Conservatives of "playing games" over a serious issue.
But in the Lords Conservative peer Lord Hunt said it was "imperative" that there was sufficient transparency and accountability over Northern Rock's operations as "its directors' salaries and bonuses will be paid out of taxpayers' funds". But in the Lords Conservative peer Lord Hunt had said it was "imperative" that there was sufficient transparency and accountability over Northern Rock's operations as "its directors' salaries and bonuses will be paid out of taxpayers' funds".
Independent auditIndependent audit
He added: "The government should have nothing to fear from the truth."He added: "The government should have nothing to fear from the truth."
Peers also voted by 154 votes to 142 for an amendment requiring the Bank of England to carry out an audit of the bank after three months in public ownership, then at least annually. Peers had also backed an amendment requiring the Bank of England to carry out an audit of the bank after three months in public ownership, then at least annually.
"There are very important reasons why there needs to be an independent audit by a firm of auditors who are not associated with the previous regime," said Lib Dem frontbencher Lord Oakeshott."There are very important reasons why there needs to be an independent audit by a firm of auditors who are not associated with the previous regime," said Lib Dem frontbencher Lord Oakeshott.
"There are very serious concerns now in the City about the last interim report - the last published report - we have seen from Northern Rock on June 30 last year.""There are very serious concerns now in the City about the last interim report - the last published report - we have seen from Northern Rock on June 30 last year."
But Lord Davies, for the government, said it was "vital" in the interests of eventually returning the bank to private ownership, "that we dot no apply inappropriate public sector requirements". But Lord Davies, for the government, said it was "vital" in the interests of eventually returning the bank to private ownership, "that we do not apply inappropriate public sector requirements".
"The Treasury is the public authority subject to the act and its relationship with Northern Rock as shareholder and lender will be in the public domain.""The Treasury is the public authority subject to the act and its relationship with Northern Rock as shareholder and lender will be in the public domain."
The government says the bank's audited annual accounts will be published after an independent audit, by the end of March.The government says the bank's audited annual accounts will be published after an independent audit, by the end of March.
A third amendment requiring the Office of Fair Trading to report annually to Parliament on the nationalisation's impact on competition in the UK's banking market, was rejected without a vote. A third amendment requiring the Office of Fair Trading to report annually to Parliament on the nationalisation's impact on competition in the UK's banking market, was rejected without a vote by MPs, after Ms Cooper offered a compromise.
She said that the government had held talks with the OFT and recognised that Northern Rock should not "enjoy inappropriate unfair competition" with other banks or building societies.