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Viscount Goschen: My Lords, those are just the kind of issues that have been taken into consideration and will continue to be taken into consideration. The remit of the review is to consider all practical options.

Lord Clinton-Davis: My Lords, will the Minister indicate the stage at which the Government decided to change course on this matter and the specific grounds that necessitated that change of view?

Viscount Goschen: My Lords, my right honourable friend made an announcement in December last year. The Secretary of State felt that this was a scheme which had an unusual degree of continuing public interest. In the light of that, he decided that he would initiate a review to make sure that we had the right solution for the people of Newbury and to investigate other solutions.

Lord Orr-Ewing: My Lords, is my noble friend aware that this scheme has been under considerable discussion for nearly 20 years? Does he appreciate that when anything is stopped it means an exceptionally long delay before it starts up again? Will he accept that we must have an early decision on this matter; otherwise, there are two sets of planning blight—on the west route and the east route—so that many people are affected while nothing is going ahead at all?

Viscount Goschen: Yes, my Lords, this situation has been going on for a long while. We seek to make a decision as soon as possible.

Earl Russell: My Lords, does the Minister agree that some part of the congestion in Newbury arises because it lies between the Midlands and Southampton Docks? Would he therefore consider doing something to avoid the choice between causing congestion in Newbury or pollution in the surrounding countryside, by making progress with the high speed rail link to the Channel Tunnel?

Viscount Goschen: My Lords, that is slightly wide of the Question on the Order Paper. We are indeed making

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progress on the public transport issue. But the point is that there is continuing demand in Newbury. At the moment there is a bad situation. There is extensive congestion and we need a solution to address that problem which already exists, never mind what might happen in the future.

Lord Clinton-Davis: My Lords, if a decision were to be made in favour of the bypass within the timescale indicated by the Minister, can he say when work would be likely to commence, having regard to the concerns already expressed on both sides of the House about this matter?

Viscount Goschen: No, my Lords, I do not think that I can say that. It would depend on what the review says. I do to want to pre-empt the review. But I said that we would seek to make an announcement as soon as possible and to take forward as soon as possible any further work that might develop.

Lord Stoddart of Swindon: My Lords, is the Minister aware that when I fought the Newbury constituency on two occasions in 1959 and 1964 a grave traffic problem existed at that time also? I have listened carefully to the answers given both now and previously by the Minister and I still cannot understand why the Government ordered the review. What is the mystery? Can the noble Viscount explain why, on the eve of the project being started, the Secretary of State suddenly decided to have a review? We have not had that question answered and I should like it answered now.

Viscount Goschen: My Lords, ultimately, as proposer of the scheme, it is up to the Secretary of State for Transport whether a project should go ahead, even after the statutory processes have been gone through. We have now been through two public inquiries on the issue. I stated that the Secretary of State felt that a review was necessary because of the continuing level of public interest in the scheme. It is the responsibility of the Secretary of State and he must satisfy himself that the right solution has been found.


2.51 p.m.

Lord Spens asked Her Majesty's Government:

    Whether they have assessed the long-term consequences of the decision to allow Barings Bank to be put into "administration" on the earning capacity of United Kingdom financial institutions.

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley): My Lords, the directors of Barings applied for administration when they formed the view that the bank was unable to continue trading. The Bank of England took the view that the problem was specific to Barings and would not result in major systemic risk to the financial system. The Governor did not recommend the use of taxpayers' money to rescue Barings, and subsequent events vindicated that approach.

Lord Spens: My Lords, while thanking the Minister for that Answer, does he and the Treasury realise that a

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second Wimbledon has been created in the City of London? It is now a place where it is wonderful to come and play as a foreigner to win the large prizes that exist, but not much good if one is British. Does the Minister realise that 40 per cent. of that business is already in the hands of overseas companies and will rapidly increase. As I understand it, last week the Japanese banks decided to remove all their deposits from London banks, other than the major ones, and put them with German, Swiss, French, American and other banks of that ilk.

Lord Henley: My Lords, I do not accept the analysis of the position as related by the noble Lord, Lord Spens. It was a sad and regretful episode but the circumstances which brought Barings down were unique to that bank and ought not to apply to other banks.

Lord Eatwell: My Lords, is the Minister aware that the 1987 Banking Act defines the Bank of England's Board of Banking Supervision as an advisory and not an investigative body? Is he aware also that the Economic Secretary to the Treasury, Mr. Anthony Nelson, described the Board of Banking Supervision as a,

    "cosy club of Governor's appointees"?

Is it not clear that the board is an entirely inappropriate body to investigate the role of the Bank of England in the Barings affair? Only a fully independent inquiry will enjoy the confidence which is so vital to the economic future of the City of London. Why are the Government afraid of an independent inquiry?

Lord Henley: My Lords, the noble Lord's point in relation to my right honourable friend the Economic Secretary to the Treasury is a silly one. My right honourable friend made that comment when he was a Back-Bencher in another place. At the time he was concerned about the number of independent members on the board. Following his intervention in that Bill, the number was increased. At the time he agreed that the increase would enhance the weight and power of the Board of Banking Supervision. As a Treasury Minister he is fully confident that the board can fulfil the tasks set for it by the Chancellor. The board was set up by the 1987 Act and its role is to advise the Bank of England on the discharge of its supervisory responsibilities. It will produce a report in due course which my right honourable friend the Chancellor of the Exchequer will consider.

Lord Eatwell: My Lords, can the Minister say why the Government are afraid of an independent inquiry?

Lord Henley: My Lords, the Board of Banking Supervision is independent. It consists of nine members—I can list them if the noble Lord wishes me to—six of whom are totally independent. The other three are ex officio—the Governor of the Bank of England and two other members of the Bank.

Lord Monkswell: My Lords, will the Government advise the House, and thereby the nation, as to which British banks are secure for the deposit of money

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belonging to individuals, local authorities and charities and will be safe and guaranteed by the Bank of England?

Lord Henley: My Lords, I presume the noble Lord is aware—he tabled a similar Written Question—that I shall shortly be answering his Question. I can give a preview of that Answer. No lists of such banks exist. Local authorities are responsible for making their own decisions on the creditworthiness of deposit takers.

Iraq: British Exports

2.55 p.m.

Lord Haskel asked Her Majesty's Government:

    Whether they have any plans to encourage and support British industry to export to Iraq.

The Minister of State, Department of Trade and Industry (Earl Ferrers): My Lords, while sanctions continue in force Her Majesty's Government neither encourage nor discourage the supply of those goods which are permitted to be supplied to Iraq by the United Nations.

Lord Haskel: My Lords, I thank the Minister for that Answer. However, is he aware of the pressure on some UK companies to engage in sanctions busting on the grounds that, if we do not trade with Iraq, other firms and other countries will get in first? Does not the Minister agree that the two visits made by groups of 25 people to Baghdad during the past few months sent entirely the wrong signals, particularly as some of the companies represented deal in goods unrelated to humanitarian purposes? Those visits were used to great propaganda effect by the Iraqi authorities.

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