Dormant Bank and Building Society Accounts Bill [Lords]

I congratulate the Chief Secretary on introducing the Bill to the House. As someone who has been campaigning on the subject of dormant accounts for many years, I am delighted that the Bill has reached this stage today. The issue is technical, and a great deal of consultation and discussion with the banking industry has taken place. It is a credit to the Government that we now have an opportunity to legislate. Having made speeches, launched more early-day motions than I can remember and lobbied the Government for nearly a decade, I was half afraid that I would become dormant before seeing the introduction of the Bill. The Bill is important, despite its less than stimulating name, because it will have the potential to pour considerable resources into our national economy and to prevent unused resources from languishing hopelessly in the coffers of private companies. It may pave the way to fund community projects across the country, thereby strengthening Britain's social fabric and altering the lives of a great many people. To that extent, it matters a great deal. People are supposed to check their bank accounts every so often, and I first came across the issue of dormant bank accounts when I decided to look through my standing orders, direct debits and so on. I found a £1 direct debit going into a building society that I had never had any contact with in my life, as far as I was aware. I thought that I would stop paying it, but I then decided to find out more about it. I was going into town the next day, so I took the reference number and popped into the building society. I found that the money was going into a fundraising account for the Labour party that had been closed about 10 years previously, apparently. [Interruption.] Opposition Members may say that the account should remain dormant. The party got my money eventually, but it thought that it had closed the account. That is the point, and I wondered what would have happened if I had not stopped my direct debit. The building society could have used that money to loan to other people to generate money. Essentially, it would never have had to give it up to anyone. As luck would have it, Ireland was starting to legislate for the same thing at that time, so I looked around the world at other countries that had introduced such legislation, and quite a lot of countries have done so. I thought, ““Well, what can I do about it?”” I wrote to every bank and building society in the United Kingdom to ask them three questions: what was their definition of a dormant bank account; how many did they have; and how much money was in them? Not surprisingly, not many of them told me the answers, but some did. A sufficient number answered to enable me to work out that there was a great deal of money sitting doing nothing—or at least doing nothing but making profit for the banks and building societies. I wrote to the British Bankers Association, but it seemed quite happy with its scheme, which consisted of one person in the BBA offices distributing forms to people who wanted to know where their bank account had gone. It took me two years to get a meeting with its then chief executive, Ian Mullen; after showing a great deal of reluctance, he eventually met me. He, too, thought it quite acceptable to continue to have only one person meeting the needs of people who had lost contact with their bank accounts. The problem has had a very slight impact on my personal life, but for countless others, the impact is great, and will continue to get greater. The reasons for dormancy are many and varied, and we have heard some of them. They include death and intestacy; small, overlooked standing orders; and simple forgetfulness. No matter what the reason for the dormancy of the account, all people with a dormant account have one thing in common: the right to regain the money to which they are entitled. The Bill has at its heart the objective of reuniting people with their money, and I salute the lengths to which the Government have gone to protect that right in the Bill. It is just and fair that the rightful owner be placed at the heart of the legislation, as they have been. I suspect that some in the press, and perhaps in the House, will attempt to scaremonger and pander to cheap media criticism of the Bill. Even in 2004, The Daily Telegraph referred to the Government's ““dormant accounts grab””. I urge Members of all parties to steer clear of that line of attack, because the effort, skill and consultation that has gone into protecting individual citizens' finances is laudable. Any accusation that the scheme is theft from private bank accounts is wholly without substance. I pay tribute to the provisions of the Bill that ensure a perpetual right of reclaim, to the provisions that mean that a member of the public need not deal directly with the central reclaim fund but can always deal with their own bank, and to the Government's continued efforts to lead a public information campaign to reunite people with their lost funds. I hope that the Economic Secretary to the Treasury can assure us that the provisions will be acted on fully, and that the Government will continue with their public information campaign aimed at allowing people to reconnect with their lost funds. The Bill is not about moving funds from citizens' bank accounts to the Government's. It is about reconnecting people with their lost funds. Where that is not possible, the Bill is a means of using unclaimed and lost funds to achieve social goals in the community, and preventing those funds from padding out the profit margins of the banking industry. The Bill's goal is highly commendable. It raises the amount of money available for the furtherance of good causes and lowers the risk that any British bank account can be lost forever without a right to reclaim. I have praised the Bill, but I have concerns about the voluntary nature of the scheme; that subject has already been raised. At present, no bank will have to contribute to the scheme if they do not want to do so, and if they commit to the scheme, they are under no compulsion to do so fully. That, obviously, is what is meant by a ““voluntary”” scheme. Recent times have perhaps shown that the free market, and in particular banking lobbies, cannot be trusted to act in the public interest of their own volition. Stronger regulation over recent years could have gone some way to protecting us from the current credit crunch, but I will not dwell on that. I am not alone in expressing fears about the opt-in scheme; I am joined by the Treasury Committee, which respectfully urges the Government to reconsider a compulsory scheme. It should be noted that not a single developed nation with dormant bank accounts legislation has chosen anything but a compulsory scheme. Such schemes are found in Ireland, the USA, Canada and New Zealand. A compulsory scheme would guarantee not only a level playing field for all concerned, but a single unified banking commitment and fidelity to the legislation. I understand the Government's desire for soft-touch regulation but I cannot align myself fully with that desire. Regulation is not burdensome when it is necessary. As I say, I have concerns about the voluntary approach. The first such concern is simply that the banks will not participate at all, especially as they can currently use the credit crunch as an excuse for non-participation.