Dormant Bank and Building Society Accounts Bill [Lords]

I am grateful to the Minister for tabling new clause 3, which reflects the commitment that he gave in Committee to return to the issue. A feature of the debates in the House and the other place has been that a review process is needed. In Committee, the Government sought to remove the new clause that was inserted into the Bill on Report in the other place. As a consequence of that decision in Committee, we are considering Government new clause 3 and new clause 2, which I tabled. It is worth bearing in mind that one reason why we feel that a review is needed is that the scheme is unusual in that the banks and building societies will join it voluntarily, but a statutory legal framework is required to enable balances to be transferred from the banks to the reclaim fund. Clearly, once expenses have been set aside, the amounts transferred to the reclaim fund will be transferred in England to the Big Lottery Fund to be used for the purposes set out in the Bill, and we will discuss those purposes later. Given the hybrid nature of the scheme, it is important that a review mechanism is in place. One of the things that characterised the debate in the other place was the need to remove uncertainty about how the scheme will operate day to day, and there is still some uncertainty about how the reclaim fund will function. On that basis, the Lords determined that there should be a triennial review—that was provided for in the new clause introduced in the other place—but I accept the concerns that the Chief Secretary expressed on Second Reading that to commit the Government to a triennial review in perpetuity was perhaps not the right way to go. Having reflected on that and the deletions that the Government made in Committee, I came up with new clause 2, which would provide the option to hold more than one review. One of the big differences between the Government's new clause and ours is the option to hold further reviews. The requirement for a review could be terminated if both Houses approved a draft statutory instrument. Once the scheme is up and running and we have been through one review, it might well take another review before we are certain that the scheme is operating properly. That is why the Government are wrong in new clause 3 to create the scope for just one review, whereas we want reviews to be carried out more frequently but not necessarily until the end of time, as under the original new clause. Our new clause also differs from the Government's new clause in its provisions for the scope of the review. We would have a broader set of arrangements under new clause 2. The hon. Member for High Peak (Tom Levitt) talked about the voluntary nature of the scheme. Of course, new clause 3 does not explicitly address that issue, whereas new clause 2 does. We will talk about the voluntary nature of the scheme when we consider new clause 1, which was tabled by the hon. Member for Taunton (Mr. Browne), but the scope of my new clause would enable the essential issue of the scheme's voluntary nature to be considered properly. People expect the scheme to work, but there are concerns, which we will come to in more detail in considering new clause 1, that the scheme might not work on a voluntary basis, and we want to ensure that that is explicitly addressed in any review. The review provides a mechanism to enable us to signal to the voluntary sector, which is most concerned about the voluntary nature of the scheme, that we take on board its concerns and want to make sure that they are addressed in any subsequent reviews. Subsection (4)(b) of new clause 2 would give the Treasury flexibility on what issues it considers. Matters other than"““the operation, effectiveness and scope of the dormant accounts arrangements””" could then be considered. For example, one might want to look into the expenses incurred by the reclaim fund, or the range of assets covered by the Bill, which simply covers bank accounts. Subsection (4)(b) could enable the Treasury to broaden the scope of the assets covered, and to consider national savings and investments and other unclaimed assets—perhaps shares, life assurance policies and pensions policies. That was discussed at some length in the other place, but not in Committee. It is an area of activity that we want to keep under review. One of the reasons why we need a review is to ensure that there is a spotlight on the operation of the scheme. We are talking about the way in which banks unite dormant accounts with their customers, the processes that they use to do so, and the thoroughness with which they try to identify the customers concerned, to make sure that they do not lose out as a consequence of the scheme. In Committee, we discussed concerns about how well that would work in practice. A review will require the banks and building societies to continue to work hard on that. It will ensure that there is a mechanism for identifying flaws in the system, and will make sure that we have feedback from consumers on how well the scheme works. It will enable us to understand what the administrative burdens on the banks are, and how easy it is for charities to be able to identify dormant accounts to which they might be entitled. One of the concerns of charities, which are often the residuary legatees of an estate, is how they could find out whether they had got all the money to which they were entitled. There is a dispute between the charities and the banking sectors about how that would work in practice. Again, a review would enable the issue to be considered, so that we could see how things work in practice. I know from talking to both the Unclaimed Assets Charity Coalition and the British Bankers Association that they have a commitment to working closely together on that, but the fact that there is a review means that they have to work very closely together and reach a pragmatic solution to the problems without, I hope, having to resort to a compulsory scheme. The strength of new clause 2 is that it would enable us to hold more than one review. That reflects the fact that we may not get the scheme right straight away. We may need to consider how the scheme operates in its first three years, and we may then say that we need to come back for a second review. However, that second review might be the last review that is needed, if people are happy that the review was properly carried out. That capacity to hold a review beyond the initial period is one of the key distinctions between new clauses 2 and 3. New clause 3 does not go far enough. It does not provide the comfort that I am looking for on the issue of the scheme being kept under regular and frequent review. I am being optimistic, of course, but I would much rather that the Government withdrew new clause 3. New clause 2 provides a far more effective sanction and check, and offers far more effective scrutiny of the operation of the reclaim fund, than new clause 3 does. I hope that I have persuaded hon. Members that that is the case and that they will join us in the Division Lobby. However, the Government have moved some distance on this. When the matter was first raised in the other place, the Government were reluctant to accept a triennial review.