Dormant Bank and Building Society Accounts Bill [Lords]

It is very good to follow the hon. Member for High Peak (Tom Levitt). There is clearly a particular Derbyshire interest in this subject. I also congratulate the hon. Member for Dudley, South (Ian Pearson) on his new role at the Treasury. I think that he combines it with his role at the Department for Business, Enterprise and Regulatory Reform, where I suspect, on balance, he will have more fun. However, we welcome him to his new role. Like the rest of my hon. Friends, I fully support the motivation behind the Bill and I certainly welcome the spirit in which the Chief Secretary to the Treasury spoke about her approach to considering possible amendments in Committee. That is good for the purposes that lie behind this legislation. I wholeheartedly believe that allowing money in dormant accounts to be used to help good causes or to be reinvested in the community is completely the right thing to do, and it certainly has my full support. The Bill follows a long period of consultation and discussion, which we heard about, between the Government and the banking sector, as well as with the Treasury Committee and the Commission on Unclaimed Assets, chaired by Sir Ronnie Cohen. There was much discussion during the Select Committee's proceedings as to how the money should be directed, and there were a number of suggestions. It is worth looking at some of those that were put forward. The right hon. Member for Birkenhead (Mr. Field) and the hon. Member for Sittingbourne and Sheppey (Derek Wyatt) suggested that the first claim on the unclaimed assets should be given to the victims of the wind-up of occupational pensions. The Prince's Initiative for Mature Enterprise called for a focus on microfinance for the over-50s to enable more of that generation to start up businesses. Although many worthwhile ideas have been floated, I welcome and support the allocation of the unclaimed assets to improving youth services in particular, and to tackling financial inclusion and boosting social investment. However, my hon. Friend the Member for Fareham (Mr. Hoban) talked persuasively about the issue of additionality, which was at the heart of what the original lottery legislation was all about. The point is that these areas are already funded by Government expenditure, and I should like the Minister to tell the House how this money will be spent differently from money already spent by the Government on new services. This is an important point, and we come back to the additionality factor. When the Bill was debated in Committee by Members in the other place, Lord Howard of Rising mentioned that in his evidence to the Treasury Committee the Economic Secretary admitted that youth services had been underfunded for years—a point that I think is generally accepted throughout this House. However, that raises some question marks over the ability to guarantee that the revenue from dormant accounts will not be substituted for normal Government spending. I come back to the point that it is crucial that we all understand what the Government have to say about this issue. Can the Minister therefore tell the House what proportion of money in dormant bank accounts will be transferred to the Big Lottery Fund? If he cannot answer that question, is it wise to make specific commitments about the use of funds, such as those made on youth centres? I look forward to his reply. Before this money is given to help these good causes, it is vital that there are robust measures in place to reunite owners with their unclaimed assets—a point that has been powerfully made by a number of Members today. I very much welcome the banking industry's efforts to achieve that, which I believe to be absolutely genuine. That is all the more essential as this is a time when many families are under great economic stress, and the situation is getting worse. It is also crucial that once the liability is off the bank's balance sheet, there is reserve in the reclaim fund so that it can still pay out to customers who come forward in future to claim their assets. That possibility has to be considered. The Government must continue to give an assurance that a balance will be struck between funding good causes and protecting the customer. The British Bankers Association believes—we have heard many estimates—that that there is between £250 million and £350 million in dormant bank accounts. The Building Societies Association estimates that there is some £150 million in dormant building society accounts. Taking those figures together, we are talking about £400 million to £500 million in UK dormant accounts. I would be interested to hear whether the Government agree with the Treasury Committee that banks' estimates of funds in dormant accounts are more likely to be underestimates than overestimates. The Chief Secretary touched on that, but it would be interesting to learn a bit more about the Government's evaluation of this matter after their consultations with the banking industry and the building societies. The House of Commons Library agrees with that assessment, because it believes that the scale of unclaimed assets"““is staggering, but, the estimates vary hugely and reliable sourcing of any estimate is very difficult.””" The Halifax alone has £700,000 of unclaimed money for customers located in the east of England, some of which undoubtedly belongs to my constituents. I am glad that many banks and building societies are now focusing their efforts on becoming more proactive in reuniting customers with their accounts. To take up the point that the hon. Member for High Peak made, this voluntary activity—the framework of this legislation—will work only if such a process materially takes place. We must monitor the situation to see whether a more statutory basis is warranted in future. Last month, HSBC started to send out letters to its 17,000 customers who have unclaimed money in dormant bank accounts; the average amount in their forgotten accounts is £1,400. In the same spirit, Lloyds TSB announced earlier this year that it had brought in a search agency to track down the holders of 120,000 dormant savings accounts. A number of hon. Members have mentioned the website that provides a free service to help to trace lost accounts and savings. That website, which I have visited, brings together the three tracing schemes of the British Bankers Association, the Building Societies Association and NS&I into a single website, meaning that anyone who has a dormant or lost account with a bank or building society or NS&I, or with all three, can initiate a search simply by visiting the website. It is free to use, it averages more than 760 claims a day and I find it easy to access. I am encouraged by the progress that has been made in accelerating the process of finding the owners of dormant accounts. Following the consultations, I believe that the banks and building societies understand the importance of getting this issue right, and the House will welcome the fact that there seems to have been movement in that direction. It is so important that the process of reuniting lost accounts and savings with their owners is kept under review and works effectively. It is essential that the effectiveness of the scheme and the amount that the banks have transferred for investment is constantly examined. If we are to have a statutory scheme, it is imperative that it is accountable to Parliament. Such a provision had been missing, so I was pleased that in the other place the Conservative party successfully amended the Bill to ensure that the reclaim fund sends specified information to the Treasury, which must then lay it before Parliament. I was also pleased that their lordships voted in favour of another amendment, which was sponsored by Baroness Noakes, to provide for a triennial review of the scheme's operations. It is also vital that the money passed on to good causes remains entirely separate from and additional to normal Government spend. As I mentioned at the beginning of my speech, the Bill's objectives are entirely admirable, yet I am worried that the Big Lottery Fund has increasingly become insufficiently independent of Government. For example, the BLF has awarded about £1 billion in grants to statutory bodies such as schools, local councils and national health service trusts since 2004. In a March 2005 press release entitled ““Healthy Food in Schools—Transforming School Meals”” the then Education Secretary, the right hon. Member for Bolton, West (Ruth Kelly) unveiled a £280 million package to transform the quality of school meals. Despite the fact that more than a fifth—£60 million—of the money was coming from the BLF, the Government seemed happy to take the credit for that decision 36 days before the 2005 general election. That is not at all the spirit in which the lottery was founded or in which it should operate. Unclaimed assets should be used solely for the benefit of society; they should not be used to solve, even by implication, any short-term problem or to achieve what is considered desirable politically by any Government. I would like the Minister to assure the House that all money given to the BLF from dormant accounts will go only to projects in the voluntary and community sectors, where it should really go. If the money is to be spent differently, what measures will be in place to ensure that the BLF does not duplicate Government spending? I simply cannot see how additionality will stay intact. Given the choice, no Minister will choose to spend money that comes from his own budget over money that will come from the BLF. I am afraid that such has been the pattern for a number of years. That is why money that has not come as a result of general taxation must be accountable to an independent body. In passing, let us consider the composition of the BLF. There is an argument as to whether it should be the distribution body that implements the legislation. Over the years, a number of questions have been raised about the role of the lottery. If there is a change of Government after the next general election, we will introduce a national lottery independence Bill to free the national lottery from political interference by making the National Lottery Commission and the distribution bodies accountable to Parliament.