Dormant Bank and Building Society Accounts Bill [HL]

moved Amendment No. 5: 5: Clause 2, page 2, line 4, leave out ““smaller bank or building society”” and insert ““building society or a smaller bank”” The noble Lord said: My Lords, the ultimate purposes of this Bill are, first, that in general money for good causes as defined, with separate provisions for Wales, Scotland and Northern Ireland, ends up being disbursed by the Big Lottery Fund. The second purpose—the alternative scheme—is to assist charities that are local to where the banks or building societies are based. Banks and building societies are able to avail themselves of the alternative scheme if they have an asset base of less than £7,000 million. In Committee, I endeavoured to put the view that the £7,000 million was a cliff edge and that there should be some apportionment for all banks and building societies. All of them have a local or regional element, whatever their size. I am not clear how many banks in the scheme as envisaged would fit the smaller scheme. However, as the building societies publish figures, we know that the smaller scheme applies to 51 of the 59 societies. I have received no message from any bank, and I find it sad that the banks shrug their shoulders, so to speak, and say, ““We’ll fit in with this. So be it””. That is not the case with the building societies. The eight largest building societies—the ““big eight””—do not wish to be volunteers for the general scheme. Indeed, they have written to us. We are told that this is a voluntary scheme but the building societies do not wish to volunteer. Why is that? Building societies all have a clear local or regional element. Perhaps the Nationwide, the biggest of them all, is the only one that really is, as its title suggests, nationwide. Seven of the eight biggest building societies have clearly defined charitable foundations that they themselves have set up and into which they put millions each year. Those foundations have independent trustees. All eight see clearly that charitable giving is an expression of their mutuality. It is invidious to treat the building society movement on this 51:8 basis. It is right to treat them all in the same way. The Bill says that the £7,000 million can be changed by order. That could be needed quite soon. Take building society number nine, the Derbyshire. At its last account date in 2006, its asset base had exceeded £6,000 million. Unless an order is placed in the next couple of years, it will, as it were, be added to the big eight. We do not know much about Northern Rock, although much has been said here and in the other place. We saw the queues. I suspect that many of those people making withdrawals from Northern Rock went around the corner and placed their funds in a building society. We do not yet know—we will not know for a month or two—what effect that will have on the balance-sheet values of all the building societies. There could well be a quantum leap in all building societies at the 2007 balance-sheet dates. It occurs to me that mergers are not totally unknown. In 1900, there were 2,286 building societies; by 1950, there were 819; 20 years ago, there were 131; and, 10 years ago, there were 71. Now, there are 59. I do not believe that anybody has decreed that there should be no more mergers. It would be wrong for this Bill somehow to get in the way of what building societies naturally wish to do. I am suggesting neither that there should be further mergers, nor that there should not be further mergers. If, for reasons of their own, which might have something to do with cash machines or computers, the societies believed that there should be a merger, it would be very strange if, under this Bill, that merger meant that, in future, dormant accounts had to join the general scheme, rather than the two local schemes. Decision-making in those building societies—sub-contracted, in the cases of seven of the big eight, to those trusts that they have set up—involves several people. Often, the societies involve their membership in deciding how, with their mutuality, they give away what they feel is right to society and the communities that they represent. I contrast that with the decision-making that may be there when we come to the Big Lottery Fund and its board. It is right to free all building societies from being part of that general fund and to let what has certainly been built up locally be used in a local way. It is often used in this way at present, but this would firmly enhance it. I beg to move.