Debates — Dormant Bank and Building Society Accounts Act 2008

Committee stage in the Lords

10 Jan 2008103 speechesView in Hansard ↗

Lord Shutt of Greetlandmoved Amendment No. 34:
Speaker
Lord Shutt of GreetlandLiberal Democrat
Quote
moved Amendment No. 34:
Source
View in Hansard ↗
Lord Davies of OldhamI am glad that the noble Lord, Lord Shutt, has been profitably engaged over the recess, or just after it, in discussion…
Speaker
Lord Davies of OldhamLabour
Quote
I am glad that the noble Lord, Lord Shutt, has been profitably engaged over the recess, or just after it, in discussions with various people with a keen interest in the Bill. I hope he recognised that he was getting a favourable response from all sides. He is right that the government amendment helps matters, as he would see it, to move a little closer to his position and, as we would see it, to make clear the provisions in the Bill. The noble Lord’s amendment is not necessary. I hear what he says about historical accounts. However, Clause 1 applies to historical accounts where a bank or building society transfers to an authorised reclaim fund the balance of a customer’s dormant account, and it is clear that, provided the customer is able to show that he has entitlement over the account as the proper claimant, the money will be paid to him regardless of the fact that so far as concerns the institution there may have been historical issues or changes relating to the account. The account may not be in the original account holder’s name because of the factors identified by the noble Lord, but he is right—he read out the relevant passage—that the banks and building societies are participating in a voluntary scheme, and they are participating on very clear principles. The objective is to ensure that account holders are reunited as far as possible with money that is properly theirs. An account will become dormant only after the 15-year period, subject to the safeguards in the Bill. I recognise the noble Lord’s anxieties but I do not think that his amendment advances the cause significantly. If a financial institution has a combined historical dormant account for its own operational reasons, that does not prevent a balance owing to a customer either being reclaimed by that customer if he is able to establish entitlement or going into the scheme. I assure the noble Lord that we have considered these points carefully. He made his position clear on some of them at Second Reading. If I thought that there was a smidgen of doubt regarding these accounts, I should respond to him differently. He kindly referred to Amendment No. 42, so he recognises that we are making our position clearer, but I assure him that his amendment is not necessary and would not add to the security that he seeks regarding the accuracy of the definition of dormant accounts.
Source
View in Hansard ↗
Lord Shutt of GreetlandI am far from clear that the Minister understands where I am coming from on this matter. We have received a lot of pape…
Speaker
Lord Shutt of GreetlandLiberal Democrat
Quote
I am far from clear that the Minister understands where I am coming from on this matter. We have received a lot of paperwork recently, and are still receiving it, on the subject of “reuniting”, and it is right and proper that that reuniting endeavour takes place, but three things can happen. First, money can be reunited. Secondly, money that goes to the reclaim fund can ultimately go to a good cause. However, I am concerned with the third area, whereby money does not go to the reclaim fund because it was written off to a suspense account by the bank in 1950 or was written off to profit in 1935 or whatever. If we are talking about a level playing field, we have to be absolutely clear about what is in the Bill. I could understand if the Minister said that anything before 1918 or 1945 or whatever date was being written off. That is why I said in the first place that every account that has ever existed should be included. If it is really dormant and cannot be reunited, it should get through to the reclaim fund. I am concerned that there should not be a situation where a bank or building society says, “We wrote it all off in the old days. We have had some since about 1970, but anything before that has been forgotten and we are not bothering about it”. That is the problem. If there is a level playing field, there must be that clarity. That is why we need an amendment of this nature. We will have to look at this matter another day. This is an issue, but for the moment, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendment No. 35 not moved.] On Question, Whether Clause 9 shall stand part of the Bill?
Source
View in Hansard ↗
Baroness NoakesI gave notice that I intended to oppose the Question that Clause 9 shall stand part. At our last sitting, I tabled Amen…
Speaker
Baroness NoakesConservative
Quote
I gave notice that I intended to oppose the Question that Clause 9 shall stand part. At our last sitting, I tabled Amendments Nos. 33 and 35 to Clause 9, which were intended to tease out the meaning of the drafting. In the event, the 7.30 pm Grand Committee curtain came down before we were able to complete our discussions and I promised the Minister that I would try to find a way of bringing back the points to continue them. Since we were in the middle of our discussions of Clause 9, I was able to continue our debate under the simple device of clause stand part. I will remind the Minister what I asked on our last Committee day because that was some time ago. I first probed what was meant in subsection (1) of Clause 9 about an account which “consisted only of money”. I pointed out that accounts always consisted of money because that is how accounts are expressed. I asked the Minister to explain what subsection (1) was intended to include or exclude and I hope that he can give some examples so that the Committee can be clear about what is intended. Secondly, I probed why subsection (2) restricted accounts to those which are part of a bank's “activity of accepting deposits”. I asked how that applied to accounts that arrived in the bank through other financial services. I cited the specific example of a self-invested pension plan, which includes a bank account. How is a customer to know whether his account falls within subsection (2)? Again, I asked the Minister to give some examples of what is intended to be included or excluded by virtue of subsection (2) to bring the policy intent behind Clause 9 to life. In Committee, the Minister replied that the Government wanted to restrict this Bill to ordinary current and deposit accounts. He said a lot of other things as well but they were not relevant to the issues that I raised. In particular, he did not respond to the questions that I raised in respect of subsections (1) and (2) and did not give any examples to clarify why, if the Government intended to restrict this Bill to current and deposit accounts, the Bill does not simply say that it should be so restricted, with appropriate definitions. I tabled the clause-stand-part objection to enable the Minister to reply to the points that we did not fully get a chance to explore in December and to gain greater enlightenment of the Government's intention behind Clause 9.
Source
View in Hansard ↗
Lord Davies of OldhamAs the noble Baroness said, she promised to return to this and I knew that she would fulfil her promise. I hope that I…
Speaker
Lord Davies of OldhamLabour
Quote
As the noble Baroness said, she promised to return to this and I knew that she would fulfil her promise. I hope that I am better equipped today to respond to the points that she made. Perhaps a little refreshment on the issues after the new year is appropriate. This is a voluntary scheme— the product of the Government working with the bank and building society sector to produce a scheme based on dormant bank and building society accounts.
Source
View in Hansard ↗
Baroness NoakesI thank the Minister for that reply, which was a much better reply than he gave me during our previous day in Committee…
Speaker
Baroness NoakesConservative
Quote
I thank the Minister for that reply, which was a much better reply than he gave me during our previous day in Committee. He underlined that the Government have not chosen a direct form of drafting—which is to define current and deposit accounts—but an indirect form designed to ensure that the Bill does not catch anything other than bank and building society accounts. We debated that during our first day in Committee, as the Minister is aware, and most of us are dissatisfied with the scope of the Bill, but if the Minister is insistent that it should be narrowly defined, Clause 9 achieves that effect. That does not mean that we are happy with the outcome, but he has better explained the intent behind Clause 9. Clause 9 agreed to. Clause 10 [“Dormant”]:
Time
14:15
Source
View in Hansard ↗
Baroness Noakesmoved Amendment No. 36:
Speaker
Baroness NoakesConservative
Quote
moved Amendment No. 36:
Time
14:15
Source
View in Hansard ↗
Lord NewbyAs the noble Baroness said, the substance of this amendment appears to have been accepted by the BBA. Given that we hav…
Speaker
Lord NewbyLiberal Democrat
Quote
As the noble Baroness said, the substance of this amendment appears to have been accepted by the BBA. Given that we have a voluntary scheme in prospect—until we can change it on Report—if the BBA supports the substance of the amendment, it is difficult to see why it should not be put in the Bill to reassure everybody. There is no issue of principle here for any of the actors in this saga so why not put it in the Bill and be done with it?
Time
14:15
Source
View in Hansard ↗
Lord Davies of OldhamI am grateful to noble Lords who have spoken on this amendment. As I have emphasised time and again, the important prio…
Speaker
Lord Davies of OldhamLabour
Quote
I am grateful to noble Lords who have spoken on this amendment. As I have emphasised time and again, the important priorities of this scheme are successfully reuniting customers with their proper resources and increasing consumer awareness about such resources and what is proposed in the Bill. We consulted on these issues when preparing the Bill. The scheme’s publicity should leave account holders clear on how they can trace dormant accounts and claim their money. The noble Baroness was generous enough to refer to the announcement by the British Bankers’ Association that it is in the process of amending the Banking Code to reflect this. She is right that the code is voluntary but it covers a wide range of banks. The banks have, I think, also written to noble Lords about this matter; if not, I am sure that the letter is on its way. They understand the anxieties of the House that maximum steps should be taken to make customers aware of their assets and the implications of the scheme. In real terms, account holders will not feel any difference from this legislation with regard to their accounts. They are active in pursuing their interests with regard to their accounts; the only time when they are affected is if an account is defined as dormant. We hope that the cases when reclaim occurs will be few and far between; that is the purpose of the publicity that the banks are undertaking. The parts of the scheme dealing with reunification and customer notification are not a matter for the Government or for legislation, but I assure the Committee that the Government were at pains to emphasise to the interests concerned that such a scheme would not work to public satisfaction unless significant efforts were made on the process of reunion between the customer and their account, when the account had fallen into abeyance. We have had proof over the past two months of the work that has been done in this area, including later this month the launch of the one-stop shop for the customers searching for their lost accounts, which will enable them to initiate a free search covering banks, building societies and national savings via a single application. We are satisfied that significant efforts are being made with regard to this aspect of the scheme. In keeping with the voluntary concept of the scheme, we do not propose to put in legislation demands on the institutions about how they should increase awareness. They have agreed to notify account holders generally of the scheme’s introduction—that is, all customers—and its implications for them. When account holders are in active contact with their bank, notification will go through the existing channels, with the existing literature. If an account has been inactive for 15 years and the institution is not confident that it has the account holder’s current address, it is not likely to be very productive for the bank or building society to write to an address that has produced no response for that length of time. It is already usual practice for banks and building societies to write to customers whose accounts have been inactive over a much shorter period than the 15 years envisaged in the legislation. That is set out in the 10-pledges leaflets issued by the British Bankers’ Association and the Building Societies Association. If the institution receives no response, the account is treated differently from other live accounts. For example, the banks and building societies no longer send statements to an address when it is clearly proving to be unproductive. Therefore, a further requirement for a written notification after 15 years is likely to prove of benefit only to fraudsters engaged in identity theft. It would be burdensome on the institution, likely to produce little return, and the return that it could achieve could be quite deleterious. For that reason, the banks and building societies will instead continue their current practice of attempting to contact lost customers at a much earlier stage than 15 years and publish their policies on how they will determine their accounts eligible for the scheme at that 15-year stage. We have already had evidence of the work being done by the banks and building societies with regard to the scheme. I hope therefore that the noble Baroness, who tabled this as a probing amendment, will feel that she has a satisfactory enough answer to be able to withdraw it.
Time
14:15
Source
View in Hansard ↗
Baroness NoakesI did say that it was a probing amendment. I thank the noble Lord, Lord Newby, for his support. He hit the nail on the…
Speaker
Baroness NoakesConservative
Quote
I did say that it was a probing amendment. I thank the noble Lord, Lord Newby, for his support. He hit the nail on the head in asking why, if the banks and building societies say that they are going to do this, we cannot have it in legislation. The Government did not want to place demands on the institutions, but that is approaching the issue from the wrong end. This is about protecting the interests of the individual account holders. As the banks and building societies say that writing to those holding accounts is something they would do routinely, it seems to me perfectly reasonable to say that that should form part of the definition. The British Bankers’ Association and the Building Societies Association have said that they will do this, but, as the Minister said, it is entirely voluntary, as is compliance with the code. As far as I am aware, there are no penalties for non-compliance with the Banking Code, because it exists in the realm of voluntary activity. The Minister said that writing would only aid fraudsters. That is a rather sweeping assertion because it makes certain assumptions about why people may not have responded to letters. I am not convinced that it is a sufficient answer, although clearly there is a risk to banks and building societies being required to do what they say they are going to do to ensure that account holders are informed about their account and the effect of the Act. People do not want to get into reclaim situations: they want to know that their accounts continue to exist. I do not regard the Minister’s response as satisfactory. However, as this and a number of other amendments are probing, I will withdraw them today and will consider whether, in the light of other answers I receive, the Bill overall is satisfactory in this regard. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.
Time
14:30
Source
View in Hansard ↗
Lord Monsonmoved Amendment No. 37:
Speaker
Lord MonsonCrossbench
Quote
moved Amendment No. 37:
Time
14:30
Source
View in Hansard ↗
Baroness NoakesThe noble Lord, Lord Monson, has raised an important point. A person may well instruct a bank not to communicate with h…
Speaker
Baroness NoakesConservative
Quote
The noble Lord, Lord Monson, has raised an important point. A person may well instruct a bank not to communicate with him, or to send him only statements. Those of us on the receiving end of all kinds of unwanted communications from our banks and other financial institutions with which we have had dealings, trying to sell us all kinds of financial services which we do not want, would sympathise with that position. The only question I have for the noble Lord, Lord Monson, is: why is the drafting confined to statements being on a six-monthly or yearly basis? Statements come out with all kinds of frequency, and to state that these should be sent six-monthly or yearly is perhaps a little too restrictive. Apart from that, we support the amendment.
Time
14:30
Source
View in Hansard ↗
Lord Davies of OldhamClause 10 sets out the minimum conditions that an account must meet to be regarded as dormant. No-mail accounts and fix…
Speaker
Lord Davies of OldhamLabour
Quote
Clause 10 sets out the minimum conditions that an account must meet to be regarded as dormant. No-mail accounts and fixed-term accounts which have not reached their maturity date are excluded from the definition. That is because the aim is to cover accounts that are genuinely dormant. It is difficult to know whether in those two instances customers have forgotten about their accounts or not. Amendment No. 37 would exclude accounts where, on request, the only post the account holders received from their bank or building society were yearly or half-yearly statements. It would seem, therefore, that he is content for the bank or building society to contact account holders. If that is the case, unlike no-mail accounts, which are excluded, institutions would be able to use their usual processes to contact the account holder to establish dormancy. Therefore, the amendment is unnecessary. The current definition excludes fixed-term accounts, not to be used on a regular basis, and no-mail accounts where it can be difficult for an institution to establish dormancy. But those two exclusions are self-evidently sensible. I do not think that we need to be excessively concerned about circumstances in which the customer has established an arrangement with the bank which, as far as the bank is concerned, is a continuing and live relationship, and within this framework it is straightforward for the institution to stay in contact with the account holder. Of course we could tighten things up by increasing the exclusions. However, with this Bill we are seeking to apply the lightest possible touch to a scheme which, I emphasise, is voluntary, and, at the same time, ensure that customers’ interests are safeguarded, which is the noble Lord’s concern. I therefore do not believe that his amendment is necessary, although I recognise the motives behind it.
Time
14:30
Source
View in Hansard ↗
Lord MonsonI am grateful to the noble Baroness, Lady Noakes, for her provisional support. For the reason I specified, half-yearly…
Speaker
Lord MonsonCrossbench
Quote
I am grateful to the noble Baroness, Lady Noakes, for her provisional support. For the reason I specified, half-yearly or yearly statements are sent, in my experience, because banks like to reduce their costs and do not like sending out monthly statements. I know of one semi-dormant charity account that I deal with where that takes place. I could not grasp the Minister’s argument, but it seems to me that the Bill as it stands is not satisfactory. However, it would appear that the Government’s Amendment No. 42 puts the ball in the court of the account holder, who must actually ask the bank to make the account dormant, otherwise it is not. If that is the case, and assuming Amendment No. 42 is passed, all will be well and good. It certainly gives the extra protection that we are looking for. For the time being, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.
Time
14:30
Source
View in Hansard ↗
Baroness Noakesmoved Amendment No. 38:
Speaker
Baroness NoakesConservative
Quote
moved Amendment No. 38:
Time
14:30
Source
View in Hansard ↗
Lord NewbyThis is a sensible amendment. I have two comments. First, in the case of someone like Aung San Suu Kyi, if by any chanc…
Speaker
Lord NewbyLiberal Democrat
Quote
This is a sensible amendment. I have two comments. First, in the case of someone like Aung San Suu Kyi, if by any chance she found herself with a dormant account 30 years afterwards, she would still be able to access it under the legislation. Secondly, the noble Baroness is suggesting that the banks should exercise their discretion. My experience is that the banks increasingly feel unable to exercise discretion and are bound by rigid rules for fear of litigation of various kinds. The obvious example is that as a result of the money-laundering regulations, even where you are a customer of the bank and the bank knows everything it can about your circumstances, if you wish to change accounts or add your signature to another account at the same bank, you have to go through the same procedure as if you were a complete stranger. The way in which banks are now behaving goes against the grain. It is a pity because the amendment would provide a logical and common-sense approach. However, the world in which we live is moving away from logic and common sense to a rule-based approach in virtually every case.
Time
14:30
Source
View in Hansard ↗
Lord Davies of OldhamI hear what the noble Lord, Lord Newby, says, but we are making strenuous efforts with this legislation to minimise the…
Speaker
Lord Davies of OldhamLabour
Quote
I hear what the noble Lord, Lord Newby, says, but we are making strenuous efforts with this legislation to minimise the rules imposed by statute. That is what the Bill is all about. I am grateful to the noble Baroness, Lady Noakes, for giving a fascinating illustration of a potential bank account. On the blessed day when Aung San Suu Kyi becomes free, it would be a pretty dim bank that was not able to respond to her claims upon resources which she might have lodged in the United Kingdom. Let us remember where we are starting from: these are the minimum bases for an account being dormant; the bank is involved in judgment on other matters. The noble Lord, Lord Newby, referred to the regulations on money laundering, which is an important consideration, but with dormant accounts the bank has other means at its disposal beyond just the minimum. It is quite clear from the Banking Code that banks will err on the side of protecting the customer—that is their obligation—and the account holder still has the right to claim even when a transfer to the reclaim fund has occurred. I hope I have been able to respond positively enough to this probing amendment to reassure the noble Baroness. At the root of this and other anxieties about how far we should go on definitions, the concept behind the Bill is not to impose the money-laundering regulatory definitions to which the noble Lord, Lord Newby, referred; this is an attempt to get the co-operation of the banking and building society institutions in a flexible scheme with the minimum amount of statutory constraint.
Time
14:30
Source
View in Hansard ↗
Lord Hamilton of EpsomIt is not a point of substance, but the Minister said that it would be an insensitive and extraordinary bank that did n…
Speaker
Lord Hamilton of EpsomConservative
Quote
It is not a point of substance, but the Minister said that it would be an insensitive and extraordinary bank that did not know about Aung San Suu Kyi. Personally, I find that I do not get written to by individuals—it is the computer that communicates with me, as a customer of the bank, and it is the most unintelligent machine you can imagine.
Time
14:45
Source
View in Hansard ↗
Lord Davies of OldhamI imagine that all noble Lords share that sentiment.
Speaker
Lord Davies of OldhamLabour
Quote
I imagine that all noble Lords share that sentiment.
Time
14:45
Source
View in Hansard ↗
Baroness NoakesI thank noble Lords who have spoken. I accept that there is always the possibility that reuniting can take place, but i…
Speaker
Baroness NoakesConservative
Quote
I thank noble Lords who have spoken. I accept that there is always the possibility that reuniting can take place, but it is a fall-back and not the core activity. The amendments that I propose in this small group to Clause 10 try to ensure only that the definition is robust. As my noble friend Lord Hamilton said, computers are stupid and, as the noble Lord, Lord Newby, said, banks do not actually exercise their common sense. This is about ensuring that a series of technical rules do not result in a non-common-sense approach and a number of accounts being declared dormant, because that would mean that being imposed on an account holder was the requirement for reuniting. That would not necessarily be something that we should seek to do. The Minister said that the banks would err on the side of protecting customers. I can say only that he is an extraordinarily optimistic man about how banks as commercial institutions acutely operate. I have tried in these amendments to ensure that the Bill protects the customer in those instances in which rules are insensitively applied, and the customer is not protected but required to go through unnecessary procedures such as reuniting.
Time
14:45
Source
View in Hansard ↗
Lord Davies of OldhamI would not want to be accused of excessive naivety about how financial institutions work. We should recall the purpose…
Speaker
Lord Davies of OldhamLabour
Quote
I would not want to be accused of excessive naivety about how financial institutions work. We should recall the purpose of the transfer of funds. If the bank reaches a judgment that the account is dormant, the bank is not the beneficiary;—the funds go to the reclaim fund. I am not being excessively naive in this case.
Time
14:45
Source
View in Hansard ↗
Baroness NoakesNo, but the Minister did suggest that the banks would be out there exercising discretion to make this work properly. It…
Speaker
Baroness NoakesConservative
Quote
No, but the Minister did suggest that the banks would be out there exercising discretion to make this work properly. It is not evident from the experience of this side of the Committee that that would be the case and that the rules in Clause 10 would militate against that. We may well return to this theme, but for the time being I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.
Time
14:45
Source
View in Hansard ↗
Baroness Noakesmoved Amendment No. 39:
Speaker
Baroness NoakesConservative
Quote
moved Amendment No. 39:
Time
14:45
Source
View in Hansard ↗
Lord NewbyPerhaps I may ask the Minister a question that I should probably have raised under another amendment. The noble Barones…
Speaker
Lord NewbyLiberal Democrat
Quote
Perhaps I may ask the Minister a question that I should probably have raised under another amendment. The noble Baroness has raised an interesting point. Clause 10(2) states that, “an account is to be treated as not dormant if at any time … the bank or building society in question was under instructions from the holder … not to communicate with that person”. If I have an account for which I am fed up with getting statements and say to the bank, “I don’t want you to talk to me about this again”, does that mean that the bank will then not communicate with me, and that the account will stay dormant until I communicate with the bank possibly 30 years down the line, or be deemed to be dormant on my demise?
Time
14:45
Source
View in Hansard ↗
Lord Davies of OldhamThe answer to the noble Lord is definitively yes. Instructions would have been given and the bank would therefore opera…
Speaker
Lord Davies of OldhamLabour
Quote
The answer to the noble Lord is definitively yes. Instructions would have been given and the bank would therefore operate under them. Those instructions would obtain, until, for some reason which would have to be justifiable in terms of law, the bank was able to show that the claimant no longer had a claim on those assets. Others potentially would, and the bank would therefore not be able to put such resources into the reclaim fund. I say in response to the more specific point raised by the noble Baroness that circumstances where the bank is under instruction to pay interest accrued on the account to another person or to another account are already covered by subsection (1)(b), as whenever interest is paid from one account to another account, that is a transaction on the instructions of the holder of the account. It is a live transaction, until it is countermanded by the person who has so instructed the bank. It is therefore clear that the account could not move into dormancy while such a requirement obtained against it. We think that that is covered by the legislation.
Time
14:45
Source
View in Hansard ↗
Baroness NoakesI asked whether subsection (1) dealt with that. The account sits there; no transaction goes through it; interest is not…
Speaker
Baroness NoakesConservative
Quote
I asked whether subsection (1) dealt with that. The account sits there; no transaction goes through it; interest is not transferred from it; it is calculated outside the account and goes to another account. The core account, therefore, is not touched; there is not a transaction that involves it. I raised the amendment to clarify whether that separate calculation and payment of interest were correctly described as a transaction in relation to the account when it had not been touched.
Time
14:45
Source
View in Hansard ↗
Lord Davies of OldhamThat is an interesting point. It is so interesting that I am lost in interest rather than able to provide an immediate…
Speaker
Lord Davies of OldhamLabour
Quote
That is an interesting point. It is so interesting that I am lost in interest rather than able to provide an immediate reply. As I said, I have had it confirmed that if a transaction occurs in relation to the account, it must be because of an instruction given by the account holder. As long as such transactions are live, the account cannot become dormant. That is the best that I can do.
Time
14:45
Source
View in Hansard ↗
Baroness NoakesI am grateful to the Minister. I will consider his response carefully and I beg leave to withdraw the amendment. Amendm…
Speaker
Baroness NoakesConservative
Quote
I am grateful to the Minister. I will consider his response carefully and I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.
Time
14:45
Source
View in Hansard ↗
Baroness Noakesmoved Amendment No. 40:
Speaker
Baroness NoakesConservative
Quote
moved Amendment No. 40:
Time
14:45
Source
View in Hansard ↗
Lord Davies of OldhamThe noble Baroness is fertile in producing some interesting illustrations of how dormancy may not be defined in the Bil…
Speaker
Lord Davies of OldhamLabour
Quote
The noble Baroness is fertile in producing some interesting illustrations of how dormancy may not be defined in the Bill. This is another interesting illustration, which I will probably need to reflect on, as will my officials. However, she will recognise that banks are not totally unfamiliar with the complexities that can arise from joint accounts, some of which need multiple signatures. A submission by an individual who is a joint account holder may not as defined in the Bill protect the account from going into dormancy, but it is a relevant transaction. If an account holder writes to the bank, it is certainly a communication with the bank that falls outside the definition of dormancy for which we are searching, which is the bank having an understanding that there is no person with interest—I am using interest in the general sense—in the account at all. I emphasise to the noble Baroness that I can see how complex things can become, but the claim upon the moneys in the account still obtains, even if the resources go to the reclaim fund. The individual who has been able to make no progress within a certain timeframe may be able to make progress later because of changed circumstances, and claims upon the reclaim fund can be entertained at any stage.
Time
14:45
Source
View in Hansard ↗
Baroness NoakesThe Minister said that the definition in Clause 10 would cover the situation, but I put to him that it would not becaus…
Speaker
Baroness NoakesConservative
Quote
The Minister said that the definition in Clause 10 would cover the situation, but I put to him that it would not because it would not have been a transaction carried out in relation to the account—the receiving of a communication by one of a pair who could give instructions would not be a transaction—and it would not be within subsection (2) because it would not be under instruction from the holder not to communicate because, by definition, the holder, being two people jointly, cannot agree on instructions to be given. The Minister’s fall back is that they can get their money back in due course. I do not think that is an adequate answer because people do not want to see their moneys temporarily confiscated so that they have to go through the reclaim procedure for accounts that they know about. What is missing from the Bill is something that would go beyond this rule base because, as we explored earlier, it does not require the banks to take account of other knowledge, which could come in a number of different ways, that puts them on notice that the account is not regarded by the account holder, or somebody who could be the account holder, as dormant. What will happen is that computer programs will be written to sweep all these accounts into the reclaim fund. There will not be individual judgments on individual accounts; a series of algorithms will produce the answer. Individuals who have spoken to me are rather aggrieved that an algorithm could sweep an account that has not been touched for a number of years for the reasons that I explained into the reclaim fund. The current definition is flawed to the extent that it will allow an algorithm approach without requiring the bank to take account of knowledge of any other facts. I may well want to return to this issue at the next stage, unless the Minister wants to say anything else at this stage.
Time
15:00
Source
View in Hansard ↗
Lord Davies of OldhamThe definitions of dormancy are limited because they mean that a customer sees those resources going into the reclaim f…
Speaker
Lord Davies of OldhamLabour
Quote
The definitions of dormancy are limited because they mean that a customer sees those resources going into the reclaim fund. They are minimalist definitions. The bank can follow its normal procedures for reaching a judgment on whether an account is dormant in the circumstances that the noble Baroness identified. She said that if the other person survived or relented on his obduracy in his obstruction of the account and sought to activate it, it might take some time to reclaim it from the fund. By definition, time has already elapsed, otherwise the abuse would not be as the noble Baroness defined it, with two account holders who cannot agree to activate an account at any stage. I take it that that is not meant to happen over a very short period of time but over a considerable period of time. Secondly, I maintain again that the banks can take this matter into account if the other joint account holder makes a submission to the bank. I know that that does not fall within the law. We have not tried to construct the law with a precise, exclusive definition of dormancy because, if we sought to do so, we would have a Bill as long as some of our greatest pieces of legislation. The banks are intending to operate this scheme in a manner consistent with the Banking Code, under which they are used to having to exercise judgment on issues of flexibility. The noble Baroness gave the example of a joint account holder making a submission and illustrating why he could not get access to the account or affect it in any way, shape or form, although he had an interest in it, but it would be a very odd banking judgment if that was regarded as not being a declaration of activity.
Time
15:00
Source
View in Hansard ↗
Baroness NoakesI think that we will be returning to this topic on Report because the Minister consistently articulates the issue in te…
Speaker
Baroness NoakesConservative
Quote
I think that we will be returning to this topic on Report because the Minister consistently articulates the issue in terms of what banks do and I consistently try to articulate it in terms of the account holder and his right to have his account ring-fenced from the ambit of this legislation if he so chooses. On the whole, I do not believe that people would want their accounts to be swept into the reclaim fund, as that would push them into a reuniting situation. As we discussed during our previous day in Committee, the reclaim fund may well run out of money for various reasons and it will probably have a lower covenant value than the major commercial banks. Therefore, there is no reason why an account holder should be forced to have his money temporarily confiscated through this legislation, which is drafted from the perspective of the banks rather than that of account holders. As I said, we will return to this matter on Report but, for today, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.
Time
15:00
Source
View in Hansard ↗
Baroness Noakesmoved Amendment No. 41:
Speaker
Baroness NoakesConservative
Quote
moved Amendment No. 41:
Time
15:00
Source
View in Hansard ↗
Lord MonsonThe noble Baroness, Lady Noakes, is far too modest about this amendment, which is excellent. It has much the same purpo…
Speaker
Lord MonsonCrossbench
Quote
The noble Baroness, Lady Noakes, is far too modest about this amendment, which is excellent. It has much the same purpose as Amendment No. 37, which I withdrew, but provides much more comprehensive protection to the account holder as well as being more neatly drafted. This amendment is much easier to comprehend for anyone studying the Act. It is particularly important that we should pursue this, because on closer reading government Amendment No. 42 does not provide the degree of protection that I had first imagined and I apologise for having eulogised so much an hour ago. I know that the noble Baroness says that this is a probing amendment, but I hope that at the next stage it will be a non-probing amendment to be pursued with the utmost vigour—unless, of course, the Minister sees fit to accept its obvious merits today and save us all a great deal of trouble.
Time
15:00
Source
View in Hansard ↗
Lord NewbyI assumed that this amendment states what would happen anyway. Going back to our earlier discussions on banks and build…
Speaker
Lord NewbyLiberal Democrat
Quote
I assumed that this amendment states what would happen anyway. Going back to our earlier discussions on banks and building societies writing to people who have not been in touch with them for 15 years—someone gets the letter and they write back to the bank to say, “I just want to maintain the account”— presumably that is enough to stop the account being deemed to be dormant, which is what this amendment seeks to do. If that is the case, my only question would be whether this is not almost too obvious. Equally, I would welcome the Minister’s reply.
Time
15:00
Source
View in Hansard ↗
Lord Davies of OldhamWell, I think I have been guilty of making things too obvious. Let me emphasise that I would have thought that the fact…
Speaker
Lord Davies of OldhamLabour
Quote
Well, I think I have been guilty of making things too obvious. Let me emphasise that I would have thought that the fact that the specification that this account was to be defined as non-dormant was something that the bank would take into account. We are indicating that in a number of other areas the bank is motivated by the scheme to seek to ensure that assets are reclaimed by the holders. If a bank receives a straightforward instruction that an account is not to be directed towards the dormant category and taken into the reclaim fund, it is obviously part of banking practice. If that action were taken after the account had been opened, I cannot think of anything that is likely to render the bank more liable to criticism than the straightforward instruction that, even in 15 years’ time or beyond, the account is to be defined as non-dormant. There has been an instruction to the bank. So I do not see a need to put this into legislation. I am sorry not to be helpful to the Committee. I was surprised at the eulogy of the Government by the noble Lord, Lord Monson, but it did not manage to survive more than an hour this afternoon. In fact, I have been counting the minutes of its endurance. I know that he will speak shortly and I will certainly do my best to reawaken his faith in the Government’s position when we reach Amendment No. 42. For now, I can reply only in the way that I have replied to other representations on the definition of dormancy; but regarding this amendment, nothing could be more explicit to the bank and we would expect the bank or building society to follow that explicit instruction.
Time
15:00
Source
View in Hansard ↗
Baroness NoakesThe Government are making very encouraging noises about my amendment. I think the Minister said that it was obvious tha…
Speaker
Baroness NoakesConservative
Quote
The Government are making very encouraging noises about my amendment. I think the Minister said that it was obvious that this was what banks would do and that they would be liable to criticism if they did not do it, but my point is that that is not what the Bill says. The Bill sets out criteria for dormancy, which, as I have been trying to tease out in this series of amendments, have lost touch with some common-sense roots. For example, if a bank account holder says, “I don’t want to be part of this scheme”, he should not be. I am glad that the Minister agreed with that but it is not what the Bill says. That is the purpose of teasing out all these points in the amendments. The Bill needs to be able to cover not only the slightly more advanced things set out in subsections (1) and (2) but also the basics, such as what would happen if an account holder did not want to take part. What would happen if an account holder or a joint account holder told the bank that they did not think that the account should be treated as dormant until issues relating to the validity of the joint account were sorted out? What would happen if someone was out of the country and could not issue instructions? All these common-sense aspects of dormancy are nowhere to be found in the Bill, and that is why I have been teasing out these points in the amendments. I am sorry that the Minister has not seen fit simply to accept my common-sense amendment, as he was invited to do by the noble Lord, Lord Monson, whose support I greatly value, and I think that we will have to return to this whole aspect on Report. I had hoped that we would be able to dispense with many of these issues during Committee but clearly we cannot. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.
Time
15:15
Source
View in Hansard ↗
Baroness Noakesmoved Amendment No. 41A:
Speaker
Baroness NoakesConservative
Quote
moved Amendment No. 41A:
Time
15:15
Source
View in Hansard ↗
Lord Davies of OldhamWe have already cantered around this course several times and each of the jumps is becoming increasingly familiar. With…
Speaker
Lord Davies of OldhamLabour
Quote
We have already cantered around this course several times and each of the jumps is becoming increasingly familiar. With this amendment, the noble Baroness again wants a fully inclusive definition of “dormancy” to be put in statute, imposing on the banks all the circumstances in which they will be obliged to recognise that an account is not dormant. However, this is a voluntary scheme. The banks and building societies have given pledges about how they intend it to operate and they have been clear about how they intend to treat dormant accounts. Not being able to contact an account holder can be an indication of dormancy. Being able to contact one indicates the exact opposite—it is clear that it is very unlikely that the account is dormant. I understand that we are to return to these issues on Report. It looks as though we are involved in a clash of principles on how the Bill should look on this important issue. I regret that. The noble Baroness must find herself in a slightly strange position by being involved in an excessive degree of regulation with regard to a private scheme into which these institutions have entered voluntarily, for which they have a code and pledges of conduct that indicate how they intent to operate the scheme; but the noble Baroness wants it in statute. At this stage, the Government are not convinced by those arguments, but no doubt we will return to them and we will have to wait and see what degree of success the noble Baroness has.
Time
15:15
Source
View in Hansard ↗
Baroness NoakesThe Minister almost makes the case for my amendments, but draws back at the end by saying that although I have made a g…
Speaker
Baroness NoakesConservative
Quote
The Minister almost makes the case for my amendments, but draws back at the end by saying that although I have made a good point, it cannot go into legislation. The Minister accuses me of excessive regulation, but that is entirely unjust. I have been trying to ensure that there are clear definitions that respect property rights. The Government have proposed a definition that may suit a lack of clarity and gives the banks freedom to do virtually whatever they want. The Government may well have agreed that with the banks, but that is unsatisfactory in the context of protecting the rights of individuals, because we are talking about property rights. We appear to have a clash of principle in our approach to the Bill and that will have to be played out when we can seek the opinion of the House, which I regret we cannot do this afternoon. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.
Time
15:15
Source
View in Hansard ↗
Lord Davies of Oldhammoved Amendment No. 42:
Speaker
Lord Davies of OldhamLabour
Quote
moved Amendment No. 42:
Time
15:15
Source
View in Hansard ↗
Lord Shutt of GreetlandI would like to speak to this amendment, because I referred to it earlier when I moved the first amendment of the day.…
Speaker
Lord Shutt of GreetlandLiberal Democrat
Quote
I would like to speak to this amendment, because I referred to it earlier when I moved the first amendment of the day. The noble Baroness, Lady Noakes, mentioned “getting under the skin” of the customer and it is possible to get under the skin of the bank. I want to speak as if I am a trustee for the good causes, because that is another skin that we can get under. It is absolutely crucial that we get this clear at this stage. We keep talking about named accounts that look as though no one has touched them for a while. I am talking about balances that have not been touched for very many years and the bank or building society has already said, “They have gone; they have vanished; we will put the account in suspense”. If it is in suspense, then it is in suspense—it does not have a name on it any more. Or the bank may have said, “We will take it for profit”. If the institution is a mutual, the account becomes part of accumulated funds. If it is a bank, it has gone to real profit and could even be paid out as dividends. My concern about this is a day-one principle for the sums that we are talking about. Once the Bill becomes law there should be a flood of money from accounts that have not been touched for donkey’s years. Then, every year or two, people think, “The 15-year process has happened for those accounts, perhaps we should look at these others”. It is crucial that we have a real definition. I was hoping that that would be of help and we get it absolutely clear that we are talking about sums of money that are nowhere near having a name on them in accounts that are in suspense, accumulated funds or profit-and-loss accounts. They used to be account-holders’ moneys that have not been claimed for many, many years. I hope that that issue can be bottomed.
Time
15:15
Source
View in Hansard ↗
Lord Davies of OldhamI am grateful to the noble Lord because he recognises what we are seeking to achieve with this technical amendment. Tha…
Speaker
Lord Davies of OldhamLabour
Quote
I am grateful to the noble Lord because he recognises what we are seeking to achieve with this technical amendment. That is exactly what we are seeking to do—there should not, in fact, be an obstruction to the account being defined as dormant, because of the technical nature of the operation of the building society or bank. So I am grateful for the noble Lord’s support on that.
Time
15:15
Source
View in Hansard ↗
Baroness NoakesThe noble Lord, Lord Shutt, raised an interesting point there. I completely understand the distinction as regards accou…
Speaker
Baroness NoakesConservative
Quote
The noble Lord, Lord Shutt, raised an interesting point there. I completely understand the distinction as regards accounts that are pushed to suspense and that such accounts are treated as closed within the bank in order to deter fraud and other things. Those balances should be within the scheme, but if the bank or building society has been smart enough and chosen to transfer the money to profit, reserves or whatever in the past, do they come back again? I do not know how banks and building societies have accounted for such accounts, but I know how many other commercial organisations account for liabilities that hang around the balance sheet for a long time—they take them into profit.
Time
15:15
Source
View in Hansard ↗
Lord Davies of OldhamI am not sure that I can respond to the noble Baroness’s interesting but challenging question directly, but let me adum…
Speaker
Lord Davies of OldhamLabour
Quote
I am not sure that I can respond to the noble Baroness’s interesting but challenging question directly, but let me adumbrate the principle again. First, as I said to the noble Lord, Lord Shutt, we are seeking to make sure that there are no undue obstructions on resources being made available to the scheme through the technical operations of banks. That is the purpose of the amendment. In response to the noble Baroness, the issue that I addressed was: if the account was transferred into the reclaim fund and the claimant appeared with a properly attested claim after the money was gone, of course the available resources would include the account and proper interest that might have accrued. It looks as if I am not answering the noble Baroness’s direct question, so I will draw a line and give her a chance to press me further.
Time
15:15
Source
View in Hansard ↗
Baroness NoakesLet me try to explain again what I think the noble Lord, Lord Shutt, and I are trying to get at. The noble Lord has put…
Speaker
Baroness NoakesConservative
Quote
Let me try to explain again what I think the noble Lord, Lord Shutt, and I are trying to get at. The noble Lord has put himself in the skin of the charities—the good causes—and wants to make sure that the maximum amount under the terms of the Bill gets into the reclaim fund and moves on via the Big Lottery Fund and so on. This definition makes sure that if an account is not technically closed, it can still be treated as a dormant account. What the noble Lord, Lord Shutt, asked in his important intervention was whether there was a distinction between an account that was closed and put in suspense, which is a conventional way of coming out of the active treatment of an account, and accounts that have been treated as extinct in an accounting sense, transferred out of suspense and sort of lost sight of in today’s accounting records. You could not look at those records and see the account because, in the past, it was transferred to profit. I think that the question put by the noble Lord, Lord Shutt, was: are we going to get those accounts or not as part of the reclaim fund activity?
Time
15:15
Source
View in Hansard ↗
Lord Hamilton of EpsomI support the noble Lord, Lord Shutt, on this. We are talking about the identification of the account. What has happene…
Speaker
Lord Hamilton of EpsomConservative
Quote
I support the noble Lord, Lord Shutt, on this. We are talking about the identification of the account. What has happened to the money is secondary. Even if it has been paid out in profits and dividends, it can still be hauled back again. There can be a contra item to transfer it back. Are we saying that the accounts have effectively been written off and the name has gone, the money has been transferred and that there is no way in which to identify the account in future? If that is the case, the holder is never going to see that money again.
Time
15:30
Source
View in Hansard ↗
Lord Davies of OldhamIf a claimant or their heirs is able to attest that there was an account that was in existence for a period of time and…
Speaker
Lord Davies of OldhamLabour
Quote
If a claimant or their heirs is able to attest that there was an account that was in existence for a period of time and went after the 15 years into the scheme, the claimant would have the right to expect those resources to be presented to them together with the appropriate interest that the account might have accumulated over that period of time. I am trying to reassure the noble Lord, Lord Shutt, and the noble Baroness, Lady Noakes, on this: we are not seeing this money swallowed—which is the anxiety expressed by the noble Lord, Lord Hamilton, too. Such accounts are eligible for the scheme and the money goes into the scheme, and the recipients at the other end—and this is the first time this afternoon that we have addressed such individuals or organisations—will be the beneficiaries of these resources, because they will be within the scheme. But in response to the anxiety about the definition of dormancy, which we have discussed for the past hour or so, I can say that there is potential for a claim from the original depositor or their successors, if it can be attested to subsequently. The prime principle of the Bill is obvious. Banks and building societies are participating in our concern that people should be reunited with their property but, when they are not, the scheme obtains.
Time
15:30
Source
View in Hansard ↗
Lord Shutt of GreetlandPerhaps I may have another go. I read out what the British Bankers’ Association said in the paper that it published a d…
Speaker
Lord Shutt of GreetlandLiberal Democrat
Quote
Perhaps I may have another go. I read out what the British Bankers’ Association said in the paper that it published a day or two ago. It includes accounts dating back to when the financial institution first opened, including accounts originating in banks and building societies that have since been subsumed. Let us assume that one of our great-great-grandfathers opened an account in 1850 and that he put in £100. I do not believe that if you go back to that bank or building society and say that you are the great-great-grandson, it is going to say, “Ah, yes—we’ve got it in the old ledger, in the safe”. I believe that some time between 1850 and now it has either gone to profit or suspense. The point is whether that money is going to get to the good causes—because it is clear that it will not get anywhere else. It will stay with the bank unless it gets to the good causes, as I do not believe that after all this time anyone is going to knock on the door for the money.
Time
15:30
Source
View in Hansard ↗
Lord Davies of OldhamI remember at Second Reading the noble Lord saying that a relative of his had left him 15 shillings, or 60p. If the nob…
Speaker
Lord Davies of OldhamLabour
Quote
I remember at Second Reading the noble Lord saying that a relative of his had left him 15 shillings, or 60p. If the noble Lord talks about historical records in those terms, I will have difficulty in responding to him. He will recognise that what is being transferred into this scheme are accounts that have been extant but have not been active over the past 15 years. If he is asking whether banks are going back into their historical records since their foundation, I think that that would be a somewhat unreasonable request. The banks are addressing themselves to those accounts that are extant with them and which have not been activated over the past 15 years. Those resources are going into the scheme. I shall have to write to the noble Lord about how far banks are going to go back into their historical records on claims, but it is obvious that if there is a claim on a bank, it can always be sustained as long as the law will establish that. Nineteenth century money is as eligible for the scheme as 20th or, in 15 years’ time, 21st century money. As the noble Lord is not acting as the claimant but on behalf of the potential recipients, I can give him the positive answer that the scheme will benefit from all such resources. On Question, amendment agreed to.
Time
15:30
Source
View in Hansard ↗
Baroness Noakesmoved Amendment No. 43:
Speaker
Baroness NoakesConservative
Quote
moved Amendment No. 43:
Time
15:30
Source
View in Hansard ↗
Lord Davies of OldhamI never thought I would see the day when the noble Baroness was eager to see the Treasury have additional powers, certa…
Speaker
Lord Davies of OldhamLabour
Quote
I never thought I would see the day when the noble Baroness was eager to see the Treasury have additional powers, certainly not while I was standing at this Dispatch Box, but she is, and I can emphasise to her on principle that I disagree. This is a private scheme and the law is meant to be applied with a light touch. As we have argued for a good part of this afternoon, the Government’s perspective is that the framework of the scheme must have the minimum of prescription. The noble Baroness is threatening the participants in this private scheme, who have given many assurances on how they intend to activate it, and suggesting to them that what lies in wait is the Treasury’s interestingly heavy hand on further potential definitions of dormant or not dormant. We do not think this amendment is necessary. Banks and building societies have indicated how they intend to interpret the scheme. We are providing in legislation the necessary prescription to make the scheme work. We do not think that it is consistent with the philosophy behind the Bill to have an element in it indicating that the Treasury may have second thoughts. I hope the noble Baroness will see that my reservations on this account may even be shared by some on her own side.
Time
15:30
Source
View in Hansard ↗
Baroness NoakesI can assure the noble Lord that it is not shared by those on my side of the Committee. The Minister keeps referring to…
Speaker
Baroness NoakesConservative
Quote
I can assure the noble Lord that it is not shared by those on my side of the Committee. The Minister keeps referring to this as a private scheme; it is not. It is a statutory scheme and the Government have an obligation to make it work efficiently, effectively and equitably. My diagnosis is that the Bill does not do that. It may be that it will still not do that when we send it to another place, but at least it should go with powers built into it to ensure that it will operate well. We resist the notion that this is simply a way of allowing banks and building societies to do what they want. The Bill should set out with precision the way in which money can, should and should not be transferred under the scheme. We have a difference of approach and we will, of course, return to the issue. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.
Time
15:30
Source
View in Hansard ↗
Baroness Noakesmoved Amendment No. 44:
Speaker
Baroness NoakesConservative
Quote
moved Amendment No. 44:
Time
15:30
Source
View in Hansard ↗
Lord NewbyWe support the amendment, and our names have been attached to it. Fifteen years is not an unreasonable point at which t…
Speaker
Lord NewbyLiberal Democrat
Quote
We support the amendment, and our names have been attached to it. Fifteen years is not an unreasonable point at which to start, because as the BBA and the noble Baroness have said, one does not want to get to the point where one is transferring a large amount of money to the reclaim fund and a large proportion of it is coming back. That makes unnecessary work and effort, and almost brings the scheme into disrepute. If starting off at 10 years meant that 50 per cent of the money that went into the reclaim fund was being withdrawn, that would be unsatisfactory. The BBA suggests that 15 years will take us towards the 80:20 split, which seems a sensible target, but, as the noble Baroness said, we cannot be sure, and other countries clearly manage with a significantly shorter period than 15 years. The proposal in the amendment initially to stick with 15 years, see how it works and then change it if we find that we can beneficially do so seems to be a sensible way forward.
Time
15:45
Source
View in Hansard ↗
Lord Davies of OldhamThe noble Lord, Lord Newby, argued his case forcefully. The noble Baroness, Lady Noakes, kindly argued my case by repre…
Speaker
Lord Davies of OldhamLabour
Quote
The noble Lord, Lord Newby, argued his case forcefully. The noble Baroness, Lady Noakes, kindly argued my case by representing the two positions in respect of 10 years and 15 years. She was right that the Select Committee was presented with figures by the British Bankers’ Association which showed that 80 per cent of the accounts are generally lost and not reclaimed—20 per cent might still be so. Our judgment on the basis of that is the that more resources become available to the scheme the fewer the reclaim cases that have to be handled, for the obvious reason that the costs involved in that exercise are just a straight loss to the scheme. One cannot of course argue with certainty about the change between 15 years and 10 years, but it seems reasonable to judge that, after 10 years, many more accounts would be subject to reclaim, with all the costs involved. Our concern is to ensure that the greatest amount of resources is devoted not to dealing with reclaim and the costs involved in that area, but to the scheme. The noble Baroness presented the case very fairly and with great accuracy. She mentioned that we have looked closely at the Irish scheme, which is working very satisfactorily and is a good model to follow—it is based on a period of 15 years. That is why the Government are not prepared to accept the amendment. We do not think that the shorter definition would generate more assets for distribution in the long term. That is why the 15-year period is in the Bill.
Time
15:45
Source
View in Hansard ↗
Baroness NoakesI thank the noble Lord, Lord Newby, for his support. The Minister was almost not addressing the amendment before him, b…
Speaker
Baroness NoakesConservative
Quote
I thank the noble Lord, Lord Newby, for his support. The Minister was almost not addressing the amendment before him, but addressing the question whether “15” years is a good figure to put in the Bill. We have said that it is, based on such evidence as there is. I think that the British Bankers' Association presented no evidence as such; it presented assertions to the Treasury Select Committee. I do not think that the committee carried out any independent analysis of the impact of maturity or lapse of time on dormancy. However, that was not my point. It is not fruitful to get into the question whether 15 years is better than 10 years—we will accept the judgment that 15 years is right for now. The point of the amendment is that over time we can reasonably anticipate that the conclusion that 15 years was the right figure would not necessarily hold over time. It is entirely plausible, for the reasons that I outlined earlier, that that figure might come down. The British Bankers’ Association did not portray it as one of the universal truths of banking that it existed for all time or was likely to do so; it merely presented it as a figure based on current circumstances. The point of the amendment is to allow for flexibility to be built in so that the reclaim fund, which will have access to all this information and be able to track patterns of reuniting—because that information will not just be held in the banks—will be able to advise the Treasury on those patterns. Then it will be appropriate for the Treasury to take action to enable the banks to release further resources at an earlier time for the good causes that the Government are so keen on supporting. I fail to understand—and the Minister has not addressed—why the Government would not take flexibility to deal with those matters as they might emerge. I struggle to understand what the Government’s real position is on this amendment, because the Minister has just said that 15 years was good now and did not address how the figure would be changed to release further money for good causes if it were proved to be wrong in future.
Time
15:45
Source
View in Hansard ↗
Lord Davies of OldhamBefore the noble Baroness withdraws the amendment, as I sincerely hope she will, she has made a persuasive and interest…
Speaker
Lord Davies of OldhamLabour
Quote
Before the noble Baroness withdraws the amendment, as I sincerely hope she will, she has made a persuasive and interesting case, sufficient certainly for me to think that the Government should consider the matter before we arrive at Report. We shall certainly do so.
Time
15:45
Source
View in Hansard ↗
Baroness NoakesI am grateful to the Minister. That is almost victory in terms of the conduct of our Committee to date. I beg leave to…
Speaker
Baroness NoakesConservative
Quote
I am grateful to the Minister. That is almost victory in terms of the conduct of our Committee to date. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 10, as amended, agreed to. [Amendment No. 45 not moved.] Clause 11 agreed to. Clause 12 [Disclosure of information]:
Time
15:45
Source
View in Hansard ↗
Baroness Noakesmoved Amendment No. 45A:
Speaker
Baroness NoakesConservative
Quote
moved Amendment No. 45A:
Time
15:45
Source
View in Hansard ↗
Lord Davies of OldhamBanks and building societies are normally under a duty not to disclose information about their customers’ affairs to th…
Speaker
Lord Davies of OldhamLabour
Quote
Banks and building societies are normally under a duty not to disclose information about their customers’ affairs to third parties without the customers’ consent. That is an important obligation subject to only very limited exceptions. The proposed agency arrangements, under which claims for repayment against the reclaim fund will be handled by a customer’s original bank or building society, mean that customer records will need to be retained by the original institution to verify claims on the reclaim fund’s behalf. There should be no need for the confidential customer information to be transferred routinely to the reclaim fund. The Government recognise that there may be exceptional circumstances in which a customer is unable to seek repayment from their bank or building society and the claim may need to be handled directly by the reclaim fund, which would then require access to information. Nevertheless, it is envisaged that this would operate only where claims need to be properly verified in order to enable the reclaim fund to fulfil its function to repay the customer. The amendment would enable a bank or building society to share with the reclaim fund confidential information that is not directly related to customer repayments. We do not think that is necessary. We do not foresee circumstances, apart from those I have identified, where the reclaim fund may require confidential information. We want as far as possible to restrict the flow of information to just that consideration. I hope the noble Baroness will recognise our concerns in this respect.
Time
15:45
Source
View in Hansard ↗
Baroness NoakesI entirely recognise the concerns outlined by the Minister. The point of the amendment put to us by the Law Society of…
Speaker
Baroness NoakesConservative
Quote
I entirely recognise the concerns outlined by the Minister. The point of the amendment put to us by the Law Society of Scotland was to make the ability of the banks to pass information to the reclaim fund slightly less restricted. It is still restricted to claims made on the reclaim fund, but not only to the specific claims made under those two subsections. I shall ask the Law Society of Scotland to consider the Minister’s reply. I am not sure that he dealt fully with the concerns that it raised with me, but if it has ongoing concerns, it would be best if it raised them with the Treasury outside our deliberations in this Committee and, I hope, before we get to Report. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendments Nos. 45B and 45C not moved.] Clause 12 agreed to.
Time
15:45
Source
View in Hansard ↗
Baroness Noakesmoved Amendment No. 46:
Speaker
Baroness NoakesConservative
Quote
moved Amendment No. 46:
Time
15:45
Source
View in Hansard ↗
Lord Davies of OldhamThe noble Baroness fairly described the powers of the Information Commissioner and I do not need to repeat those or ent…
Speaker
Lord Davies of OldhamLabour
Quote
The noble Baroness fairly described the powers of the Information Commissioner and I do not need to repeat those or enter into a debate on them. The amendment would go further than the Data Protection Act 1998 to allow the Information Commissioner to exercise powers in relation to any information held by the reclaim fund, and not only personal data. Of course, the role of the Information Commissioner and the whole question of data protection has been an issue of lively public interest in recent months. As the Committee will be aware, the Prime Minister announced on 21 November that the Government would give the Information Commissioner the power to carry out spot-check inspections of government departments. Further, he asked Richard Thomas and Dr Mark Walport, as part of their review, to look at the Information Commissioner's powers of assessment to see whether there was scope for extending them. The issue is under lively consideration by the Government. It would not be right to extend the powers in the Bill only in relation to the reclaim fund and to what, in the wider scheme of things, is a fairly modest measure. I hope that the noble Baroness will give the Government due credit for addressing the Information Commissioner's powers and I hope that she will agree that it would not be appropriate at this stage to change the Information Commissioner’s powers in relation to this Bill.
Time
16:00
Source
View in Hansard ↗
Baroness NoakesThe Minister's response was wholly predictable. I put the Minister on notice that we regard the Information Commissione…
Speaker
Baroness NoakesConservative
Quote
The Minister's response was wholly predictable. I put the Minister on notice that we regard the Information Commissioner's powers as important—as we have argued in the context of many Bills, not only over the past year but over an extended period. Until the Government come forward with proper proposals and a legislative timetable for dealing with this issue, we will continue to raise it in relation to any relevant Bill that comes before the House. This issue should not be lost sight of. The Government have announced their reviews in the light of the disgraceful loss of data by HMRC and the equally disgraceful losses that have subsequently come to light from other government departments. It would be very easy for that to get lost and for legislative time never to be found to make the appropriate amendments. I will not press the amendment further in the context of this Bill, but I wish the Government to be on notice that we will not let go the issue of the Information Commissioner's powers. There may come a time when we must force the Government to accept that changes need to be made, if they have not voluntarily done so ahead of that time. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 13 [Banks making transfers under section 2: information in directors' reports]:
Time
16:00
Source
View in Hansard ↗
Baroness Noakesmoved Amendment No. 47:
Speaker
Baroness NoakesConservative
Quote
moved Amendment No. 47:
Time
16:00
Source
View in Hansard ↗
Lord NewbyWe support the amendments. There are several reasons for believing that it makes sense for the public to be able to see…
Speaker
Lord NewbyLiberal Democrat
Quote
We support the amendments. There are several reasons for believing that it makes sense for the public to be able to see how much money individual banks and building societies are passing across to the reclaim fund. First, as we were discussing earlier, in theory the banks will go back into the mists of time to identify orphaned and unclaimed assets to include in the scheme. If one bank is successful and assiduous in doing that and another bank is lax, a figure will help to draw that out. Equally, if one bank spends a lot of time and effort reuniting customers with their money and therefore pays across less to the reclaim scheme, that will also be apparent from having this kind of information available. The ability to compare the performance of banks and building societies via this information being in the public domain could be a good and effective way of putting pressure on them to use maximum efforts to reunite people with their money and to ensure that they are putting into the scheme all suitable assets.
Time
16:00
Source
View in Hansard ↗
Lord Hamilton of EpsomI also support the amendment moved by my noble friend. It strikes me that competition is very important, and the compar…
Speaker
Lord Hamilton of EpsomConservative
Quote
I also support the amendment moved by my noble friend. It strikes me that competition is very important, and the comparison between one bank or building society and another will play a significant role in applying pressure. There has also been some suggestion—I do not know how true the Minister thinks this is—that banks will cut their charitable contributions as they make contributions to the reclaim fund. Of course, that would then show up more clearly as well.
Time
16:00
Source
View in Hansard ↗
Lord BachWe agree with the noble Baroness that the scheme should be transparent. We agree that information on how much banks and…
Speaker
Lord BachLabour
Quote
We agree with the noble Baroness that the scheme should be transparent. We agree that information on how much banks and building societies transfer to the reclaim fund under Clause 1 should be disclosed and that building societies participating in the option for smaller institutions should be required to include in their annual reports the details of charities to which they have transferred dormant account money. We do not consider the amendments necessary, however. Under the provisions made by Schedule 1, the reclaim fund itself will publish information on how much money it receives from each individual institution, whether it is a large bank or a large building society. The comparison—the competition as the noble Lord, Lord Hamilton, described it—will be found in looking at what the reclaim fund publishes as information. It will be collected as a single source by the reclaim fund and we believe that that is the most transparent way of ensuring that people can access it and make comparisons. We do not feel that it is necessary to add to the Bill the provision for large banks—or even large building societies, should there be a forthcoming amendment at some future date. The disclosure requirement in relation to small, locally based building societies participating in the scheme can already be imposed and will be imposed by the Treasury through an amendment to the relevant building society account regulations. I understand that the general principle is that when a regulation-making power exists, as it does for building societies, under which the relevant provisions can be made, it is normal practice for that power to be used rather than making new provision in primary legislation. That is why, as far as smaller building societies are concerned, Amendment No. 49 is not necessary because we will do what it proposes under regulation. The Treasury intends to amend the relevant regulations dealing with building society accounts and reports that are made under the Building Societies Act 1997. Therefore, we do not believe that the amendments are necessary. I can see that the next question will be why the Bill includes provision imposing disclosure requirements for smaller banks as opposed to smaller building societies. That is because the relevant regulation-making powers lie with the Secretary of State under the Companies Act 2006, rather than being exercised by the Treasury. It was thought that, on balance, it would be better to include in the Bill a position for small banks, but I am telling the Committee that small building societies will be covered by regulation.
Time
16:00
Source
View in Hansard ↗
Lord Hamilton of EpsomI should be grateful if the Minister would come back to me on the question of charitable contributions and the juxtapos…
Speaker
Lord Hamilton of EpsomConservative
Quote
I should be grateful if the Minister would come back to me on the question of charitable contributions and the juxtaposition that one might make between them. If you compared one set of accounts for one year with another, you could see whether charitable contributions had been cut as contributions to the reclaim fund went up. If the reclaim fund is to publish this information, will it be done in the form of a league table? We are talking about percentages rather than bald figures, because the contribution to the reclaim fund vis-à-vis the total number of assets that that bank or building society manages is the relevant figure. Will they be put in a list in order of percentage?
Time
16:00
Source
View in Hansard ↗
Lord BachI cannot tell the noble Lord exactly how it will be done, but I take his point about year-on-year accounts as far as ba…
Speaker
Lord BachLabour
Quote
I cannot tell the noble Lord exactly how it will be done, but I take his point about year-on-year accounts as far as banks are concerned. I should have thought that a reclaim fund publication listing the banks and how much they had given under the scheme would be the best way to make the comparison that all Members of the Committee who have spoken in this short debate want to see, rather than having a whole load of different banks’ annual reports in front of them and comparing one with another. There is a certain advantage in what the Government are proposing here.
Time
16:00
Source
View in Hansard ↗
Baroness NoakesI thank other Members of the Committee who have spoken in this short debate. I am grateful for the Minister’s explanati…
Speaker
Baroness NoakesConservative
Quote
I thank other Members of the Committee who have spoken in this short debate. I am grateful for the Minister’s explanation of why small building societies are not covered. It can be summed up by saying that the Treasury does not trust any other department to use statutory instrument powers properly so it will include them in its legislation. It is rather incongruous for the Treasury to use its powers but for another bit of government not to be trusted. That does not say much for joined-up government. However, I am grateful for the explanation and the Government’s commitment to make the appropriate order in relation to small building societies.
Time
16:00
Source
View in Hansard ↗
Baroness Noakesmoved Amendment No. 50:
Speaker
Baroness NoakesConservative
Quote
moved Amendment No. 50:
Time
16:15
Source
View in Hansard ↗
Lord NewbyWe support the amendment very strongly. Our view is that the scheme is at best a hybrid scheme. It certainly has a sign…
Speaker
Lord NewbyLiberal Democrat
Quote
We support the amendment very strongly. Our view is that the scheme is at best a hybrid scheme. It certainly has a significant statutory element to it, so Parliament should be scrutinising it rigorously on a regular basis. The proposal in this amendment provides a peg on which to hang parliamentary scrutiny of how the reclaim fund is operating. The specific elements of the amendment are self-explanatory and sensible, and we hope that the Government will agree with us, in the spirit that the Minister operated under a few minutes ago, and signify some support for it.
Time
16:15
Source
View in Hansard ↗
Lord Hamilton of EpsomI, too, strongly support the amendment. So much legislation that goes through simply disappears into the ether at the e…
Speaker
Lord Hamilton of EpsomConservative
Quote
I, too, strongly support the amendment. So much legislation that goes through simply disappears into the ether at the end of the day, and there does not appear to be the opportunity to have any sort of retrospective look at it. This would be an enormously beneficial action to take, and I hope that it is supported by the Government.
Time
16:15
Source
View in Hansard ↗
Lord BachThe amendment is very clear. Let us consider what we are doing here. The legislation enables a voluntary dormant accoun…
Speaker
Lord BachLabour
Quote
The amendment is very clear. Let us consider what we are doing here. The legislation enables a voluntary dormant account scheme for the participating institutions to be set up. The responsibility for managing those assets will lie with a reclaim fund run by the private sector. The scheme will be highly transparent; the fund will publish the amount of money that flows into the scheme, so it will be public knowledge. It will publish the amount that is repaid to consumers, so it will also be made public. Reuniting customers with their accounts will be the responsibility of the bank and building society sector, which is committed to supporting the scheme by launching a comprehensive reuniting campaign before the launch of the scheme itself and to ongoing efforts to reunite customers with their accounts. We welcome all those commitments. The Government are working constructively with the private sector and with National Savings & Investments, which is taking a lead in reuniting efforts alongside the banks, encouraging them to put in place effective arrangements and will continue to do so. We are not proposing that the Government should publish information about the flows of money into the scheme or to customers, as it is more sensible for the responsibility for that to remain with the reclaim fund. Nor are we proposing to publish information about the reuniting work that the sector has pledged to do. We think it sensible that responsibility for that and for work to improve those arrangements lies with the banking sector. I know that that is not an answer that will appeal to those who supported the amendment, but it is important that the reclaim fund and the banking sector in their respective ways look after their own responsibilities. However, I can give a little ground to the noble Baroness in terms of a review of the scheme. We will determine an appropriate date for a review once the scheme is established, but I can tell the Committee that there will be a review at some stage after the scheme is established. However, I am afraid that I cannot accept the amendment.
Time
16:15
Source
View in Hansard ↗
Lord Shutt of GreetlandThat is a very interesting answer. Will the review look at whether the scheme can be expanded to bring in further asset…
Speaker
Lord Shutt of GreetlandLiberal Democrat
Quote
That is a very interesting answer. Will the review look at whether the scheme can be expanded to bring in further assets such as insurance? Does the Minister have that in mind? It would be an even more generous contribution at this point.
Time
16:15
Source
View in Hansard ↗
Lord BachI congratulate the noble Lord, Lord Shutt, on seizing the moment—this late on a Thursday afternoon, he deserves special…
Speaker
Lord BachLabour
Quote
I congratulate the noble Lord, Lord Shutt, on seizing the moment—this late on a Thursday afternoon, he deserves special congratulation. I cannot guarantee what the review will consider. I can go only so far as to say that it will review the scheme as it has worked up to that date. I think that that is the answer that the noble Lord expected.
Time
16:15
Source
View in Hansard ↗
Baroness NoakesWe are promised some unspecified jam at some unspecified time. The Minister cannot have expected me to welcome that wit…
Speaker
Baroness NoakesConservative
Quote
We are promised some unspecified jam at some unspecified time. The Minister cannot have expected me to welcome that with open arms. Indeed, he confirmed that he did not expect it. My amendment is rather modest, designed not to look at facts, but at how well the scheme is working in practice. The Treasury tells us that it will review it, but it will not tell us when. It does not tell us exactly what it will do. That is not satisfactory. Is it not a pity that we are in Grand Committee and not on the Floor of the House? However, we are where we are, so we will have to defer more extensive consideration of the amendment until a later stage. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 14 agreed to. Schedule 2 agreed to. Clause 15 [Distribution of dormant account money by Big Lottery Fund]:
Time
16:15
Source
View in Hansard ↗
Lord Newbymoved Amendment No. 51:
Speaker
Lord NewbyLiberal Democrat
Quote
moved Amendment No. 51:
Time
16:15
Source
View in Hansard ↗
Lord Hamilton of EpsomThe noble Lord, Lord Newby, mentioned the £250 million referred to in my amendment for the social investment bank. He m…
Speaker
Lord Hamilton of EpsomConservative
Quote
The noble Lord, Lord Newby, mentioned the £250 million referred to in my amendment for the social investment bank. He made the point that the British Bankers’ Association says that the total amounts raised might be £250 million to £350 million and that if it is at the bottom end of that it would be a problem. The question of youth was raised and I should be grateful to the Minister if he could clarify the issue. The Prime Minister said at the Labour Party conference: “We will use unclaimed assets in dormant bank accounts to build new youth centres”— comma— “and we will invest more than £670m so that in every community there are places for young people to go”. I am sure the Minister will accept that that comma is quite significant. It could mean that we will use unclaimed assets from dormant bank accounts to build new youth centres, and then we will spend a quite separate £670 million on youth. I believe the £670 million is spread over three years and that quite a lot of that money has already been allocated by the Government. However, the significant question is exactly how much has been allocated out of unclaimed assets for youth. I do not expect an answer now but if the Minister could find out for me for when we meet again next Tuesday I would be grateful. Quite clearly, if that has been pre-empted we are arguing about what is left over from there. I would be grateful if he could deal with that for me.
Time
16:30
Source
View in Hansard ↗
Lord Howard of RisingAs the noble Lord, Lord Newby, has pointed out, we have reached the point of deciding how to spend the money. One of th…
Speaker
Lord Howard of RisingConservative
Quote
As the noble Lord, Lord Newby, has pointed out, we have reached the point of deciding how to spend the money. One of the problems that I perceive as we go through the Bill is that there is a lack of clarity on this spending and I would be grateful if the Minister could clear up how the money is to be spent and, most importantly, whether some of this money will be used as a substitute for government programmes in order to save the Government having to spend money where they have made commitments. My noble friend Lord Hamilton asked about youth. An announcement was made only recently by Mr Balls on how much money will be spent on youth. Was he counting on cash from some of the unclaimed assets, or was he saying that it was government spending? It certainly appeared to be spending by the Government as opposed to spending unclaimed assets, which after all are not government money. The whole point of the Bill is that money should be made available to projects to which the Government are not committed, and where government funds would not be appropriate. We will seek to clarify that matter. I hope that the Minister will make a start when he speaks.
Time
16:30
Source
View in Hansard ↗
Viscount EcclesIt is true that a public body is much more comfortable with spending money on 3D assets—bricks and mortar—than on the p…
Speaker
Viscount EcclesConservative
Quote
It is true that a public body is much more comfortable with spending money on 3D assets—bricks and mortar—than on the provision of services. I know from my own experience of buildings being provided in which to meet people, but of nobody being told that they can meet in them and of there not being anybody to talk to when they got there. As the right reverend Prelate said, this whole question is much more a matter of people than of buildings—about how to make it work.
Time
16:30
Source
View in Hansard ↗
Lord Davies of OldhamI am grateful to all noble Lords who have participated in this interesting debate. We have certainly changed gear; it a…
Speaker
Lord Davies of OldhamLabour
Quote
I am grateful to all noble Lords who have participated in this interesting debate. We have certainly changed gear; it always adds a certain liveliness to proceedings when we discuss spending. We shall discuss these issues for a little while yet. An amendment has been tabled with the dreaded concept of additionality added to it. I say “dreaded” because for those noble Lords who were not present when we discussed the lottery several years ago—and I exclude the noble Viscount, Lord Eccles, who was present at the debates—we had endless discussions on the issue of additionality. No one in the Committee can underestimate the glee with which I saw this concept reappear in an amendment—and predictably so. It will raise the same problems of definition, too, when we actually get to it. Let me deal immediately with one canard—and in doing so I may also help the noble Lord, Lord Hamilton, with his query. The Prime Minister was referring to government expenditure in the Comprehensive Spending Review over three years. He identified that the sum of nearly £700 million should be spent on youth services as government expenditure. During our deliberations we will have plenty of opportunity to explore just how we are going to do this, but we are at pains to meet exactly the point that the right reverend Prelate identified.
Time
16:45
Source
View in Hansard ↗
Lord Hamilton of EpsomIs the Minister saying that new centres being built by unclaimed assets is not committed money, but something that will…
Speaker
Lord Hamilton of EpsomConservative
Quote
Is the Minister saying that new centres being built by unclaimed assets is not committed money, but something that will happen in the future and that none of the unclaimed assets has been pre-empted for use as a result of the Prime Minister’s statement?
Time
16:45
Source
View in Hansard ↗
Lord Davies of OldhamNot at all. We will follow the principle of additionality. It is very important that we should, which is why we propose…
Speaker
Lord Davies of OldhamLabour
Quote
Not at all. We will follow the principle of additionality. It is very important that we should, which is why we propose to set up the machinery in this way to guarantee that. Those are the principles under which the Big Lottery Fund has been obliged to operate since its inauguration under the lottery legislation. The second point that the noble Lord, Lord Hamilton, raised was about how much we are going to spend. We are pretty vague on how much we are going to get in, and particularly before the end of 2009. The Committee will recall that at Second Reading we had a range of estimates about how much might be made available. I cannot give the noble Lord the figures, but I can assure him that they are quite separate from the £670 million to which the Prime Minister referred. The right reverend Prelate made quite clear that we need a process of expenditure, on youth facilities in particular, that has imagination, enterprise and locality. There is a range of potential solutions to problems, some of which are idiosyncratic, but others are more general. Nevertheless, problems are addressed differently in different localities. I heard what the noble Viscount, Lord Eccles, said about the Big Lottery Fund. He was eloquent during the processes that established it, and I know he has scrutinised its operations closely. I hope I shall allay some of his greater anxieties on that score, and I shall come to that in a moment. However, he will recognise that an advantage of the Big Lottery Fund as a distributor is that it meets the right reverend Prelate’s concern that the distributor should be seen to be active in every nook and cranny of our country and in all the component parts of the United Kingdom. There are very few organisations that have that range and capacity. That is why we identified the Big Lottery Fund as the appropriate distributor. It could not have carried out the work that it has done over recent years without being subject to criticism. One cannot be involved in the distribution of the kind of resources it commands without critics—not least those who, disappointed by the decisions, are, by definition, critics—because they rightly hold their causes dear. There always will be criticism of and challenges to the Big Lottery Fund. I want to emphasise to the Committee that the choice of the Big Lottery Fund is directed towards the effectiveness with which we can reach right across the country. It has headquarters in England, Wales, Scotland and Northern Ireland and a great deal of devolved regional representation. Over this period of time it has also gained extensive experience of the third sector and public sector delivery partners, ranging from large-scale national charities through to local grass roots community groups. I take on board the point made by the right reverend Prelate on how we serve the youth of the nation. I do not think that anyone would gainsay that it is an enormous challenge for everyone in the community. It will need local and selective understanding of the problems and the allocation of resources accordingly. On social and environmental purposes, we have identified youth services and increasing financial capability as priorities. In this day and age, we are all shocked when we see the level of financial illiteracy in circumstances where a great many clear and key family decisions depend upon an understanding of how to manage budgets and, where appropriate, savings. We are aware that this has not been a feature of British education in past years. Changes are now affecting education and, although our children are getting greater access to such education, we have an adult population which has in the past had limited exposure to these issues. So there is a great deal to be done there. The third issue is that of social investment in environmental objectives. At this stage, I am not able to give the reassurance that the noble Viscount, Lord Eccles, seeks. I am not sure there is anyone, either in government or on the planet, who would totally reassure him about the effectiveness of the Big Lottery Fund. However, it is a significant feature in the landscape, particularly for the third sector. The distribution of lottery funds is a complicated job which is subject to significant convulsions, if I can use that word in a neutral sense—I am talking about the changes which have been effected to the resources made available to it by recent decisions—but it is difficult to identify any other organisation which could meet the necessary range of selectiveness and awareness of local situations. The second amendment of the noble Lord, Lord Newby, would remove the flexibility to spend on one or more of the three areas; it would require some spending on all three areas. Spending will of course occur on all three areas over a period of time but at this stage we do not know the level of available resources. There will be a question of priorities and all we are ensuring within the framework of the Bill is maximum flexibility with regard to expenditure. In doing so, we are ensuring that the legislation is fit for purpose. We are going to make clear priorities in regard to youth services and financial literacy. We are greatly interested in the innovative concepts which involve the third sector and we will address resources towards them. If we accept the noble Lord’s amendment, there will be a built-in rigidity, whereas we need flexibility in this legislation to deal with these matters. We have several other amendments which relate to this issue. I hope that I have given a precursor of the fact that I shall be pretty robust on additionality, as I sought to emphasise when responding to the appropriate question put by the noble Lord, Lord Hamilton. In addition, throughout our exchanges on the lottery, we invited all those who were worried about additionality to furnish the Government with a clear, legal, enforceable and operable definition of additionality. With all their fertile and intelligent resources, the Opposition were never able to meet that challenge, which is why I am afraid the Government have been obliged to express the legislation in the way they have. However, we shall return to this issue in due course.
Time
16:45
Source
View in Hansard ↗
Lord NewbyI am grateful to the Minister for that answer. As I made clear at the start, these are probing amendments and I was not…
Speaker
Lord NewbyLiberal Democrat
Quote
I am grateful to the Minister for that answer. As I made clear at the start, these are probing amendments and I was not seeking to introduce any unnecessary rigidity into the legislation. I am no clearer than I was at the beginning about how the Government view the three purposes. I am also slightly unclear about the extent to which the Government envisage that they will, or can, direct the Big Lottery Fund in terms of making payments within the three heads. Clause 21 states that a direction may, “specify matters to be taken into account … specify purposes … relate to the process … [and] relate to … terms and conditions”. It does not explicitly say that a direction can set priorities between the three purposes. It may be, as the Minister implies, that the Government do not have the faintest idea how they will spend the money that comes in and that they will wait to see whether they get any before doing so. None the less, I would have hoped, even at this stage, that the Government might be able to give a slightly more clear indication of where their priorities lie. However, as I said at the start, these are probing amendments and therefore I beg leave to withdraw Amendment No. 51. Amendment, by leave, withdrawn. [Amendment No. 52 not moved.]
Time
16:45
Source
View in Hansard ↗
Lord Howard of Risingmoved Amendment No. 53:
Speaker
Lord Howard of RisingConservative
Quote
moved Amendment No. 53:
Time
17:00
Source
View in Hansard ↗
Viscount EcclesThe Committee will recognise that this is not my number one solution; that would be to have a private sector solution t…
Speaker
Viscount EcclesConservative
Quote
The Committee will recognise that this is not my number one solution; that would be to have a private sector solution to the distribution of moneys. Maybe we shall debate that another time. Plenty of organisations are well experienced in dealing with the issues of education and the problems of youth. However, as a second-best solution, it is certainly a great improvement on giving Big a monopoly. The other three funds receive 16 and two-thirds of the money. That would achieve a halving of the moneys available. The other three have advantages over Big. What they are supposed to do is much clearer to the public. Everybody is pretty clear what heritage, sports and arts mean. There is no uncertainty—all three have identities and, I guess, board minutes in which they dissent from some sort of message that they have received from the department. I challenge the Minister to produce a single minute of Big’s board meetings in which it has dissented from the logic of the general policy directions given to it by the DCMS. My point is that Big is an arm of government and we should be in no doubt of that. It does not have any realistic independence. The chairman and chief executive write a joint report and there is not a single personal note in that joint report, which is very poor governance. The chairman is supposed to be independent of the chief executive when he writes reports and put his own personal view on paper. It does not happen in Big. The other three do that because they have been established longer and are not the heirs to the mixture that Big represents. They have a personality, an identity and stand up for themselves. Therefore, if at least half the money were to go to them, it would be a great improvement on the whole lot going to Big. I support the amendment.
Time
17:00
Source
View in Hansard ↗
Lord Davies of OldhamI am grateful to both noble Lords who have spoken and, like the noble Lord, Lord Howard, regret the absence of the nobl…
Speaker
Lord Davies of OldhamLabour
Quote
I am grateful to both noble Lords who have spoken and, like the noble Lord, Lord Howard, regret the absence of the noble Viscount, Lord Astor, who would certainly have made a trenchant contribution to this discussion and subsequent ones. Perhaps we will have the pleasure of his company during our later consideration of the Bill. These amendments would subsume the use of the unclaimed assets and resources within the general National Lottery scheme. We think that it is better, clearer, more effective and more answerable to the nation that Big should take responsibility for distribution, but with an entirely separate accounting and reporting procedure on its work with regard to these assets. That is the principle behind the Bill and we want these unclaimed assets to be entirely separate from other operations of the lottery distributors. We are insisting upon mechanisms within Big that guarantee that. The background is that these resources represent a once-in-a-generation opportunity which we need to make the most of. We want this investment to make the biggest possible impact and we think that the most effective way of doing that is by identifying clear priorities—which we are setting out—and by ensuring that the money will be used effectively to support long-term commitments, have the biggest impact on the most pressing priorities and have a lasting legacy for communities. I hear what the noble Viscount, Lord Eccles, said in his criticisms of Big. Some of them could be voiced against anyone with the challenging position that confronts the work of Big—particularly as we are still looking at a body that has existed for only three or four years and still has considerable expertise to build up. Nevertheless, it is clearly the most effective body for distribution, against a background where it will, as the legislation indicates, have responsibility for a separate fund for the discrete purposes of youth services’ financial capability, inclusion and social investment, which will differ from other work.
Time
17:00
Source
View in Hansard ↗
Lord Howard of RisingI am grateful to the Minister for his kind comments about my noble friend Lord Astor. I am sure he will enjoy reading t…
Speaker
Lord Howard of RisingConservative
Quote
I am grateful to the Minister for his kind comments about my noble friend Lord Astor. I am sure he will enjoy reading them in Hansard tomorrow. I am also grateful to the noble Viscount, Lord Eccles, for his comments and support. It is fine for the lottery to support the Olympics, but not at the expense of so many other things such as art, heritage and so on. The money from the assets going into Big will simply go to fill up the hole. It would be naive to suppose that there is not some direct correlation between the two. The Minister did not comment on the support of the Big Lottery Fund—I agree with the noble Lord’s comments on the word “Big”; it would take a genius to think of something quite so inappropriate—for other things such as the National Health Service and education. These are government responsibilities but money has been directed towards them. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.
Time
17:15
Source
View in Hansard ↗
Lord Shutt of Greetlandmoved Amendment No. 54:
Speaker
Lord Shutt of GreetlandLiberal Democrat
Quote
moved Amendment No. 54:
Time
17:15
Source
View in Hansard ↗
Lord Hamilton of EpsomWhat would the right reverend Prelate think of the “Resurrection Fund”?
Speaker
Lord Hamilton of EpsomConservative
Quote
What would the right reverend Prelate think of the “Resurrection Fund”?
Time
17:15
Source
View in Hansard ↗
Lord Howard of RisingI shall speak to Amendment No. 62 which is grouped with Amendment No. 54. This small amendment is designed to probe a m…
Speaker
Lord Howard of RisingConservative
Quote
I shall speak to Amendment No. 62 which is grouped with Amendment No. 54. This small amendment is designed to probe a matter that the Big Lottery Fund appears to have noticed may cause some conflicts of interest. The Big Lottery Fund Second Reading brief highlighted the important issues of accountability and transparency. From what has been heard from Her Majesty’s Government over the spending of the dormant accounts assets, that money will be going to similar organisations to support similar projects to those which money from the lottery currently supports and which it will continue to support. The National Lottery Act 2006 made it clear that publicising how this money is spent is a matter of some importance, not only to reassure people that the money they spend goes to worthy clauses but also to ensure that people are aware that the funding for prominent and popular projects around them comes from non-governmental sources. These issues will be equally important for dormant account money. Reassuring people that their money is being well spent is slightly less important since, I hope, the banks will have taken every step possible to ensure that no one has any claim on the money, but there will still be public concern that it is not wasted. It is still important that the public do not confuse projects that are financed by the Government and projects that are financed by this scheme. How does the Minister envisage that the Big Lottery Fund will draw the necessary distinction between government spending and the spending of dormant account money? The Big Lottery Fund quite rightly sees it as necessary to keep the identification completely separate, but how will that be done? I hope the Minister will be able to come forward with some ideas on this matter. It is of great concern to many people, not least my noble friend Lord Hamilton of Epsom, that this money is spent in a way that will produce the most long-term benefit. A most effective safeguard against money being frittered away would be more rigorous public scrutiny of the projects the Government and the Big Lottery Fund consider it should be spent on.
Time
17:15
Source
View in Hansard ↗
Viscount EcclesI want to ask the Minister to do something, and at a later stage we might discuss it. I want him to go into the Big Lot…
Speaker
Viscount EcclesConservative
Quote
I want to ask the Minister to do something, and at a later stage we might discuss it. I want him to go into the Big Lottery Fund’s website and look at what is there—there is a great deal of information there—and see if he can come out with an understanding of what the Big Lottery Fund does. I shall give a very small example to the Committee. The other day I fell into conversation with somebody in my village in north Yorkshire—a thing that happens pretty frequently—and he said, “You’ll be very interested to hear that we’re applying to the Big Lottery Fund for some breathing space money”. I asked him how much and he said, “We think about £1,500”. It is not difficult to breathe in north Yorkshire and there is plenty of space, but the particular space concerned is a plot of land that were the foundations—and there were very few of them—of a 1920s village hall made of wood and corrugated iron, which became unsafe. The right reverend Prelate will be pleased to hear that we are using the church instead of the village hall because the church is not fully used the whole time. There is going to be a study of this piece of ground, which is next to an abandoned garden, and there will be a specialist wild flower consultant coming to look it. We are going to put in an application. By my calculation, if that had been given to me to make into a vegetable garden, I could probably have done it in about 100 hours if I were about 20 years younger than I am—and I will bet that about 100 hours are spent assessing whether to give us a grant of £1,500 for a wild flower garden that within two years would otherwise be invaded by nettles. That is my perception of a piece of the Big Lottery Fund. On the name Big, it was very important to the Government to have an anonymous name, because they have the power to direct what it does. Noble Lords have heard its definition of additionality—and I do not want to fight about additionality at all, because it is not relevant. You can do with it what you will, as the Minister told us earlier. We have had those fights and they are not important; the important thing was to have the Big Lottery Fund in the Government’s hand so that from time to time they could change what it did without anybody understanding why they had come to that decision. That is why the website is so important. Ring-fencing the money from dormant bank accounts is no problem to the Big Lottery Fund. Having been the chief executive of the Commonwealth Development Corporation, which distributed money all over the third world, I am perfectly well aware of how you deal with that—you just ring-fence it. But that does not mean to say that you are not doing within the ring-fenced piece exactly what you might be doing within the other piece. There is no reason why you should not do what you want, some of it here and some of it there. Transparency is argued, but my response would be that it is much more like a Kafka novel than it is like transparency.
Time
17:30
Source
View in Hansard ↗
Lord BachThis has been an interesting debate on the independence of the dormant fund money spent by the Big Lottery Fund and on…
Speaker
Lord BachLabour
Quote
This has been an interesting debate on the independence of the dormant fund money spent by the Big Lottery Fund and on the importance of the public knowing that it is separate and different from other money. All those who have spoken in this debate have emphasised the need for that, and that is what these amendments are about. Even if I had not seen who was to move Amendment No. 54, after reading it I was pretty sure that it would be the noble Lord, Lord Shutt. Who else but him could think of the title “The Reawakened Fund” in the context of the Bill? I express agreement, if I may, not with the name itself but with what the right reverend Prelate said—as usual, his choice of words was spot on. However, we support the tenor of what the noble Lord says and how he argues his case. It is important to ensure that the process of distributing unclaimed assets is publicised in a manner that reflects the exciting opportunity here. It is also important to ensure that investments are presented in a suitably distinctive way, reflecting the once-in-a-generation opportunity to make a lasting difference in communities across our country. We believe that Big has done that in respect of some of its other activities. Therefore, I want the noble Lord to understand that we agree entirely with the sentiment, and I am sure that there is no disagreement in the Committee in that regard. However, we think that we can achieve the desired effect without necessarily amending the Bill. There is nothing to stop us referring to unclaimed assets by a distinctive title but, just as the right reverend Prelate said a few minutes ago, we are not certain that we are prepared to settle now on the expression dreamt up by the noble Lord. We think that it is a good try but even he may think that this is not the best description. Perhaps we can consider his suggestion along with others, or perhaps the noble Lord will come up with other suggestions. I think that he understands the spirit on which my reply is based—we like the idea but we are not sure that that is the right title. So far as concerns the amendment in the name of the noble Lord, Lord Howard, again, we take his point. It is a probing amendment about publicity regarding the money that will come from the dormant funds. Our view is that dormant account funds are the public’s money, and it is therefore of paramount importance that we achieve the transparency and clarity that he seeks in relation to where the money goes and who benefits. We would go so far as to say that accountability is the key. It is important that people are able to understand and recognise the effective use of the funds in communities across the country. Effective reporting will reinforce such transparency if the public are to support and have confidence in this worthwhile scheme. Concerns were expressed at Second Reading about the need for dormant money to be treated and accounted separately from lottery money. Indeed, I think that that is what the noble Lord is seeking in his probing amendment, and we agree with him. The Big Lottery Fund has been very clear. It will publicise, brand, report and account for dormant accounts funding separately from lottery funding, and we understand why it is important that it should do that in this case.
Time
17:30
Source
View in Hansard ↗
Lord Shutt of GreetlandI am grateful for the Minister's comments. “Reawakened” seems a quite logical name for something which was once awake,…
Speaker
Lord Shutt of GreetlandLiberal Democrat
Quote
I am grateful for the Minister's comments. “Reawakened” seems a quite logical name for something which was once awake, became dormant and then was reawakened. It may well have people questioning what it means, which is no bad thing, and asking what happened to the dormant money. That was my thinking. I am perfectly happy to believe that there could be brighter suggestions but “Big” and “Vague” are not two of them. I will think again—indeed, I hope that others will think again—because we should find an appropriate name. With those comments, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendments Nos. 55 and 56 not moved.]
Time
17:30
Source
View in Hansard ↗
Baroness Noakesmoved Amendment No. 57:
Speaker
Baroness NoakesConservative
Quote
moved Amendment No. 57:
Time
17:30
Source
View in Hansard ↗
Lord BachI congratulate the noble Baroness on the way in which she put her amendment and I absolutely appreciate the spirit in w…
Speaker
Lord BachLabour
Quote
I congratulate the noble Baroness on the way in which she put her amendment and I absolutely appreciate the spirit in which she is moving it. I hope that we can give her some kind of answer to her specific examples, but if we cannot, we will go away and think carefully about what she said, because this is an important point. Whether she is right—which she undoubtedly thinks she is—or not, it is necessary that we do some more thinking about the accountancy points that she raises. Let me do my best. Her first amendment appears to be aimed at ensuring that any sums of money generated through the investment of reclaimed fund money, either by Big or by its agent under Clause 24 on investment provision, including interest repaid to Big under the terms of a loan, are available for distribution in addition to the money originally transferred from the reclaim fund. I hope that I can reassure the noble Baroness that these changes are not necessary to the drafting of the Bill as it stands. It goes without saying that we accept and agree with the spirit of her amendments and that the proceeds of any investment of unclaimed assets in the reclaim fund should be recycled back into money available for distribution. We believe that the Bill already delivers this by way of the definition of dormant accounts money in Clause 15—the very passage that she referred to. The principal from the reclaim fund plus the proceeds of that sum are invested either in Big or by its agent under the Clause 25 provision. The second amendment goes with the first. We do not think that the third amendment is necessary; it is concerned to ensure that where Big has loaned money and received the principal back with interest, all of the money goes back into the dormant account pot. That money is within the definition, too. The final amendment seeks to ensure that where Big has made a loan, rather than a grant, when the loan is repaid an amount equivalent to the original payment is recycled back into the spending area where the loan was originally made. We do not believe it is appropriate to set a requirement like this in the legislation. The detailed approach to distributing unclaimed assets is yet to be developed and we are obviously going to draw on a wide range of evidence in developing it to inform our directions to Big. We can conceive of a position where the relative weight of spending on the various priorities would change over time for wholly appropriate reasons, perhaps because some priorities involve more concentrated up-front investment in facilities, while others relating more to the provision of services and advice are more ongoing in nature. Therefore, we would not want Big necessarily to be barred from recycling most of the receipts of a repaid loan that was made to support one purpose in the past to help meet the funding requirements of another priority, if that was more pressing at the time. We would not want to be tied down by the legislation to the approach which the noble Baroness put forward in her amendment. While distribution through loans may be appropriate in some circumstances, which is why it is in the Bill—the noble Lord, Lord Newby, and other noble Lords will be interested in social enterprises, for example, because they have indicated that they prefer that model of funding—we do not expect it to be our intention to direct Big as a general rule to make loans rather than grants. We would not expect it to be the predominant means of funding and large sums of money therefore to flow back into loans. We do not envisage Big investing other than to manage money not yet needed for distribution. Investment plus proceeds will be made available when needed for distribution. As far as grants made and repaid are concerned, money will go back into the general pot for the country for which the money is to be distributed. I assure the Committee that English money will stay in England. I am conscious that my answer has not dealt with the detailed points that the noble Baroness made, which is why I said at the outset that we would like to consider in more detail why she thinks that the present wording is unsatisfactory and whether we might come back with a form of words that is more in line, if not exactly in line, with her amendments. That can be usefully done between now and Report. We are trying to get to the same point; it is just a question of what wording is appropriate. I hope that the noble Baroness will forgive me if I leave my answer there.
Time
17:45
Source
View in Hansard ↗
Baroness NoakesI am grateful for the tenor of the Minister’s reply. He did not answer all the points that I made, which he recognised.…
Speaker
Baroness NoakesConservative
Quote
I am grateful for the tenor of the Minister’s reply. He did not answer all the points that I made, which he recognised. I hope that what I said in my introductory remarks will be self-explanatory when we have Hansard available to us. They focused on my suggestion that the wording either gives the wrong result or does not cater for certain categories of receipt and expenditure. If the Minister’s officials cannot follow that, I am happy to take them through some further worked examples to see how it flows through in practice. I hope that he will reflect—as I think that he did in his comments—that I was seeking to make the Bill unambiguous. In the one category where I gave a solution as to where the money should go, I was not being dogmatic about whether one recycles; I was merely saying that one needs an answer about whether it flows through the apportionable mechanism or is recycled within a category. I am happy to withdraw the amendment on the basis that, between now and Report, we will have the opportunity to bottom these matters out. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendments Nos. 58 and 59 not moved.]
Time
17:45
Source
View in Hansard ↗
Lord Davies of OldhamThis may be a convenient time for the Committee to adjourn until Tuesday at 3.30 pm.
Speaker
Lord Davies of OldhamLabour
Quote
This may be a convenient time for the Committee to adjourn until Tuesday at 3.30 pm.
Time
17:45
Source
View in Hansard ↗
The Deputy Chairman of Committees (Lord Brougham and Vaux)The Committee stands adjourned until Tuesday 15 January at 3.30 pm. The Committee adjourned at 5.53 pm.
Speaker
The Deputy Chairman of Committees (Lord Brougham and Vaux)Conservative
Quote
The Committee stands adjourned until Tuesday 15 January at 3.30 pm. The Committee adjourned at 5.53 pm.
Time
17:45
Source
View in Hansard ↗

Show 95 more speechesShow less

EnactedDormant Bank and Building Society Accounts Act 2008