Dormant Bank and Building Society Accounts Bill [Lords]

Two of the amendments in this group relate principally to the operation of the reclaim fund. In relation to the debate on how the fund will work, the Treasury has made it clear from the outset that this is a voluntary arrangement, and that the fund would be a private company set up by the British Bankers Association and the Building Societies Association to manage the transfer of money into the reclaim fund. It will also manage the reclaim process and determine how much money will be passed across from it to the Big Lottery Fund. My concern is that, under clause 5(4), the Treasury will have the power to give a direction to the reclaim fund requiring it"““to give effect to any specified object that it has””" or"““to comply with any specified obligation or prohibition imposed on it by a provision that its articles of association are required to make under Schedule 1.””" In Committee, the Minister said that it would be the sole responsibility of the Financial Services Authority to regulate the reclaim fund for prudential purposes, and that the fund would be authorised by the FSA. That is fine, and we can understand the reasons for the limits on that involvement. However, there is still a requirement for the Treasury to give directions. In Committee, we tabled an amendment proposing that, when such directions were given, they should be subject to parliamentary approval. The Government opposed that amendment, but we were reassured that these powers would be deployed only as a last resort. It is difficult, therefore, to work out why the Government were so reluctant to allow parliamentary scrutiny in this area. Indeed, when we pressed the Minister on the circumstances in which the power would be deployed, he said that the Government did not have any particular area specifically in mind, because they did not anticipate any problems. So, we have a power that the Government do not believe will be used, and they do not believe that its use should be subject to parliamentary scrutiny. I could accept the power to give directions, if it were to be subject to parliamentary scrutiny, but I do not accept it without such scrutiny. This is an unsatisfactory situation. I have therefore tabled amendment No. 10, which proposes to omit subsection (4) of clause 5, which would make the measure more in keeping with the spirit of the legislation, namely that the reclaim fund is to be a private company established by the BBA and the BSA, and that it should operate as such, without Ministers having the power to give directions to the company to force it to act in a particular way. Amendment No. 12 deals with this issue in a different way. It proposes that, when the Treasury gives a direction under clause 5(4), that direction should be published within 28 days of its being given. If there is to be no parliamentary scrutiny, and if these powers are to remain part of the Bill, there should at least be some publicity given to the direction. Accepting this amendment would not be a big step for the Government to take, if they believe that the powers are absolutely essential for them to have. They should not be afraid of publicising such directions. Indeed, elsewhere in the Bill, there are provisions for directions to be given to the Big Lottery Fund, and such directions will be publicised through the Big Lottery Fund's accounts. So there is a clear role for the publicising of directions. Amendment No. 12 would provide a vehicle—although not as good a vehicle as a statutory instrument—for Parliament to scrutinise the Treasury's use of the power of direction. Members of Parliament would be able to ask questions, and the Treasury Select Committee would be able to investigate the Treasury's use of the power. A softer scrutiny element is therefore involved. The amendment is a perfectly reasonable proposal to achieve some level of parliamentary scrutiny, if the Government are so wedded to keeping on the statute book a power that, at the moment, they do not expect to use. Amendment No. 11, which goes back to an issue that we discussed in Committee, concerns the level of publicity that should surround this part of the scheme. Schedule 1(3) contains a provision for the reclaim fund to publish certain information in its accounts. At the moment, that information is limited in four ways. The fund must publish its accounts and reports in accordance with the Companies Act 2006. It must publish"““the name of each bank and building society that transferred money to the fund in that year, and the amount transferred by each one””." It must publish"““the name of each bank and building society in respect of whose accounts payments were made from the fund in that year following repayment claims and, in relation to each of those banks and building societies, the total of the payments made””." It must also publish"““the total amount transferred in that year to the body or bodies for the time being specified in section 15(1).””" However, that does not include a requirement to name and shame, by saying which institutions have not contributed to the reclaim fund. As part of the series of measures that we need to take to ensure maximum scrutiny, and to ensure that we know that institutions are taking seriously their commitment to be part of this voluntary scheme, the reclaim fund should make it clear in its accounts which institutions have not contributed to it. When we debated this in Committee, the Minister argued that it was not the job of the reclaim fund's horizon scan to find a list of banks and building societies, and to determine whether or not they had contributed. He said that the FSA had a register of such entities. I have learned a lesson from my previous drafting experience, which is why amendment No. 11 refers specifically to the list of banks and building societies that the FSA will hold in its register. The reclaim fund would therefore not have to do any horizon scanning; it would simply have to compare the list in the register with the banks and building societies listed under paragraph 3(1)(b). Those that were not so listed would be listed under proposed new paragraph 3(1)(ca), which would tell us exactly which had not contributed to the scheme. That measure would maintain keep the spotlight on those institutions that had not co-operated with the scheme. These are three very reasonable amendments. Amendment No. 11 is about scrutinising who has not contributed to the scheme. Amendments Nos. 10 and 12 give the Minister some choice: either to take out the powers in the Bill or to require the Treasury to publish the direction within 28 days of publication. The Minister will have his own views, and I suspect that he is minded to reject both, but given that the Government rejected parliamentary scrutiny of the direction—in the Minister's words, it is the ““ultimate sanction””—there needs to be some check on the Government. If they are not prepared to accept such a check, amendment No. 10 is the right road to go down.