Dormant Bank and Building Society Accounts Bill [Lords]

I pay tribute to the hon. Member for Clwyd, South (Mr. Jones), both for his long-standing interest in the subject and for his heroic but seemingly futile attempts to save the Labour party from bankruptcy. When the business was originally scheduled for 6 October, our first day back, no one could have anticipated how much water would flow under the economic and political bridge. The then Chief Whip, who presumably originally scheduled the business, has moved on to a different role. Half the Treasury Ministers have also moved on, although I welcome the part-time Economic Secretary to his post. Furthermore, concern about dormant bank accounts has been overtaken in many quarters by concerns about dormant banks. However, the Prime Minister deserves some congratulations on reawakening the dormant career of Peter Mandelson, which is one of the finest developments of the past few days. It might help the House if I provide a little background. In the current phase, the issue was first brought to light in the 2005 pre-Budget report, which stated that where dormant accounts could not be reunited with their owners the money should be reinvested in the community, and specifically in youth services, financial education and social investment. I shall come to those three fields of spending in due course. The Government undertook two consultations on the proposed scheme: first, ““A UK Unclaimed Asset Scheme: a consultation””, which was published in March 2007, and, secondly, ““Unclaimed assets distribution mechanism: a consultation””, which was published in May 2007. In August 2007, the Treasury Select Committee published its report, ““Unclaimed assets within the financial system””, and the Government's response was published in October 2007. We welcome this considered approach to legislation, although it has not always typified the way in which the Government have addressed these matters. However, this process has been drawn out over such a long period that one wonders whether some of the accounts in question were new deposits when the Government first turned their mind to the matter. The Bill provides a framework designed to balance the rights of owners with action designed to benefit communities, and that is an important balance to strike. If this were simply a matter of the state being seen to confiscate the funds of private individuals, it would clearly raise considerable concern. The Bill is divided into three parts. Part 1, comprising clauses 1 to 16, deals with transferring liability and money to the reclaim fund. Part 2 deals with the distribution of funds, and there are some final provisions in part 3. Money in dormant bank and building society accounts of 15 years or older will be transferred to the reclaim fund, but it will be reasonable for us to discuss during our deliberations this evening and in Committee whether 15 years is the most appropriate time span. My party supports the principles of the Bill, as it did in the other place, and we support the improvements made to it in the House of Lords, although there have been some interesting developments in the interim, as the hon. Member for Stratford-on-Avon (Mr. Maples) pointed out to the Chancellor a few hours ago. He asked whether the current banking crisis raised new issues that we need to address during the passage of the Bill, not least because there seems to be an assumption in some quarters that the money sitting in the banks at the moment is gathering dust on a shelf and not being used for any purpose at all, and that it could therefore be utilised for good causes without any other consequences. That might seem increasingly like a less safe assumption to make, if indeed it was ever safe. I give my thanks to Lord Shutt and Lord Newby, who led for the Liberal Democrats on the Bill in the House of Lords. It has already been considered at some length in the other place, and that will inform our deliberations throughout. In the House of Lords, the Liberal Democrats supported all the cross-party amendments that were pressed to a Division—jointly, in most cases, with the Conservatives—and the Government were defeated on four of them, the first of which, tabled by Lord Shutt, dealt with the £7 billion cut-off point. There is an important discussion to be had on the overall merits of the scheme on a national basis, and the degree to which individual banks and building societies should be able to take a more local approach to projects that they have supported for a considerable period. Another amendment on which the Government were defeated proposed the introduction of a statutory requirement for all annual accounts, reports and directions received from the Treasury by the reclaim fund to be laid before Parliament. We supported two further Conservative amendments that were passed: one introduced the requirement for a tri-annual report to be laid before Parliament on the running of the scheme; the other related to the technical definition of the word ““dormant””. Given the cross-party approach to the Bill as a whole, and because we do not anticipate any Divisions this evening, I urge the Minister not to dismiss out of hand the amendments that were passed in the other place. They were not partisan amendments tabled by the Conservatives and Liberal Democrats in order to be divisive. We were seeking to strengthen the Bill, and the Labour Government might see merit in the proposals that were made, if they could only put to the back of their mind the authorship of the amendments. Some other amendments that were proposed in the House of Lords were defeated—one Conservative amendment would have required the use of the affirmative resolution procedure, but it was defeated by 130 votes to 107—and others were withdrawn. It would be worth the Government's while to revisit some of those proposals, because it does not necessarily follow from the numerical superiority in the House of Lords that the proposals were without merit. I wish to raise a few areas of concern, some of which have already been touched on, and some of which have received less careful examination over the past couple of hours. The first concern relates to the amount of money involved, and was mentioned by the hon. Member for Clwyd, South. The Chief Secretary to the Treasury was talking about hundreds of millions of pounds—her estimate was about £350 million to £500 million—and such figures have been widely quoted. However, I have heard a huge number of other figures quoted, and there is a big disparity between them. I have heard estimates of £3 billion to £5 billion, which is 10 times the amount that the Government anticipate being realised through the scheme. As I understand it, when a similar initiative was introduced in Ireland, the amounts that accrued were far in excess of those anticipated by the Irish Government. It would also be interesting to know how much money will be available year on year. There will be an initial hit, when the funds in all the accounts that have lain dormant for 15 years or more are realised—assuming that they can be uncovered—but the accounts that have currently been dormant for 14 years will presumably come on stream a year later, and those that have currently been dormant for 13 years will do so the year after that. The Government should provide a cash flow estimate, and it would be interesting to hear how much they anticipate becoming available year on year, after the original money has been realised, for the causes that they have identified. A second area of concern is the rather convoluted way in which depositors will be able to get their money back. As I understand it, they will have to go to the bank in question, rather than to the reclaim fund. Will the Minister clarify the degree to which the bank and the reclaim fund will be able to exchange information that could make it easier for the person who deposited the money more than 15 years previously to track it down without the process becoming unnecessarily burdensome? For example, they should not need to be put through to people on the other end of telephone lines who cannot provide them with the relevant information due to confidentiality or other issues of that type. If that issue has been resolved to the Minister's satisfaction, everyone will be very pleased, and I hope that he will touch on that point in his response to the debate. A third area of concern is the status of England compared with the other parts of the United Kingdom. It is our intention to explore in greater detail in Committee the proposal that the money be restricted to youth investment, financial management and social investment. We need to determine whether the Government intend to stick to that restriction, or whether it is even desirable to do so. Some people will see this as another Olympic subsidy fund, but, as the hon. Member for Fareham (Mr. Hoban) pointed out, we have still not had a proper indication of the balance to be struck between those three uses for the funds. Obviously, dividing the money equally between them would have different implications from giving 95 per cent. to one area and 5 per cent. to the other two. I hope that the Minister will be able to spell this out in greater detail. Will he also tell us why the fund in England is to be restricted to those three areas, while Scotland, Wales and Northern Ireland will have total discretion over how the money is to be spent in those countries? For example, Wales could presumably choose to spend 100 per cent. of the money on youth investment, or none at all. It would also be interesting to know about the proportions involved in the division of the money. Would the decisions be made roughly in proportion to the populations of the countries of the United Kingdom, or would they depend on the bank deposits in those countries, which could give Scotland a better share of the money than if the decision were based on population figures? Or, as a Labour Back Bencher suggested earlier, would the decisions be made following an assessment of need? That could benefit some parts of the United Kingdom disproportionately, compared with others. It is still unclear to me, and perhaps other Members, how these matters are to be resolved.