The Government is asking us all to take far too much on trust over the nationalisation of Northern Rock. This may have become the only remaining option by last weekend. But that does not mean that Parliament should sign up to a blank cheque – on behalf of us all – granting ministers sweeping powers and providing little information about the possible taxpayer liability.

The House of Lords today has the last chance to force the Government to be more open. This is not about killing the Bill, or even delaying it, but about modifying it to provide greater checks on behalf of the taxpayer.

The Treasury line has been: “Trust Ron Sandler.” He will now reevaluate the company and its assets, work out what is worth keeping and manage the business before it can be returned to the private sector. That has left open questions about the value of the company and whether, in view of the Government’s guarantees, it will enjoy an unfair competitive advantage.

Then, shortly before midnight on Tuesday, just before the Commons completed its debates on the Bill, a row erupted over the position of Granite, an offshore trust enabling Northern Rock to raise money by selling off its mortgages. The unlikely trio of John McDonnell from the Labour Left, Philip Dunne, a thoughtful Conservative with a business background, and Vince Cable, the Liberal Democrat guru of the affair, raised worries about whether the best mortgages would be in Granite, leaving Northern Rock, and therefore the taxpayer, with greater risks.

The Government’s response yesterday was that Granite was an independent legal entity that would not be nationalised and had no claim on the assets of Northern Rock. However, there are still questions about the financial structure of Granite and its bonds. What would happen if it collapsed?

Uncertainty remains about the extent of the taxpayer’s liability. As I argued yesterday, talking about £100 billion-plus is grossly misleading. That is certainly the maximum exposure, or risk, in theory. But that assumes that the houses against which mortgages are secured are worth nothing. The probable liability faced by taxpayers is, in practice, much smaller, even if house prices do fall and even if the Financial Services Authority is being optimistic in its view of the quality of the assets.

Even if you put the Granite issue to one side, the Tories and Liberal Democrats are right to press for changes to the Bill. Amendments have been tabled about an independent audit of Northern Rock; publishing the new business plan and reporting to Parliament; regulation by the Office of Fair Trading to ensure no unfair competitive advantage; and removal of the exemption from freedom of information laws. Of course, there are issues of commercial confidentiality on details. But there is a strong case for greater openness to protect taxpayer interests.

Underlying all this is an argument about whether Northern Rock should be kept going, accepting new business, or whether the bank should be closed, as Lord Lawson of Blaby argued yesterday.

The Government is keen to press ahead as fast as possible, laying the nationalisation order as soon as tomorrow. But first ministers should be willing to compromise – or else they will be forced to do so by the Lords.

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