MoneyMarketing, Helen Pow, 19/2/2008

The Government is attempting to exempt Northern Rock from the Freedom of Information Act with a clause in its draft legislation to nationalise the stricken bank.

The legislation states: "Article 18 deems Northern Rock not to be a publicly-owned company for the purposes of the Freedom of Information Act 2000."

The Freedom of Information Act says nationalised companies in Northern Rock's situation should be subject to freedom of information requests. Other publicly-owned companies such as Royal Mail, Scottish Water and the Tote are subject to the Act.

Shadow Chancellor George Osborne says the clause is an attempt to prevent the public obtaining information about how the institution is managing public funds and claims it "flies in the face of the Act itself".

He says: “The public is now paying for this bank. We are entitled to know what it is doing with our money. It is completely unacceptable to exempt it from the Freedom of Information Act. The Chancellor of the Exchequer has been incompetent and now he’s trying to cover his tracks.”

But the Treasury says Northern Rock would be at a disadvantage to other banks if it were subject to the Act.

A spokesperson says: "Northern Rock will carry on being run as a commercial bank and, as no other commercial banks are subject to Freedom of Information requests, this clause keeps it on an even keel. This is not an attempt to hide anything, we have been transparent throughout this whole process."