Dormant Bank and Building Society Accounts Bill [HL]

My Lords, I am grateful to all noble Lords who have contributed to the debate and, like everyone else, I look forward with enthusiasm to the Committee stage, when we will have a considerable amount to discuss—as though I ever doubted it. The only general point that I make concerns the questions asked by the noble Baroness, Lady Noakes. She will appreciate that the approach of the Bill is both voluntary and light touch. Therefore, if the Government came in with very heavy directions in the way that she requested, that would run counter to the philosophy behind the legislation. She may disagree with that philosophy or she may contend that it cannot work on that basis. Of course, I always respect her opinion and I shall listen to the way in which she expresses herself at subsequent stages, but I hope that at this stage she will give us the benefit of the doubt and agree that we have presented to the banks and building societies a proposal for how dormant accounts can be used intelligently. Of course we are vague about the figures. I said at the start of my opening contribution that the British Bankers’ Association and the Building Societies Association estimate that between £250 million and £350 million is currently in banks and up to £150 million is in building societies. Those are approximations and there are therefore bound to be caveats. I cannot talk about categorical figures at this stage and I do not think that it is reasonable that we should do so, particularly as the noble Baroness and other contributors to the debate have emphasised the prime importance of restoring these accounts to their rightful owners, if that can be achieved. If the Bill succeeds in passing through Parliament, it will come into operation as an Act some time hence because the banks and building societies need time to do their best to locate the owners of these accounts. Not only are we concerned that that process should continue over the next year with the intensity to which those organisations committed themselves in their 8 November statement but we will also give all the support that we can to the delivery of the process, because the individuals to whom the dormant accounts belong have a prior claim on the property. That is an absolute principle to which we subscribe. Before that process starts, we have a rough estimate of the money that might be available. I do not suggest for one moment that banks and building societies are currently dilatory in finding out what has gone wrong when an account is not activated, but they are not committed to a drive in this respect because they know that the consequence of the accounts remaining dormant is that they will fall within the framework of the Bill when, in due course, it becomes an Act. Therefore, it is not reasonable for us to be challenged too precisely on the figures for the possible return, which has been a central element in the debate. The noble Viscount, Lord Astor, as astute as ever, had the opportunity to speak first. He identified the key issues for the benefit of us all. He looked at the priorities to which the resources should be devoted and said that he was not too sure that they were the right ones. They are the product of the most extensive consultation. I do not think that any noble Lord disagrees that we should do something with resources from this source to improve the level of financial literacy and understanding in our society. The fact that resources remain dormant is proof positive that people do not have the acumen to use them as effectively as they might, otherwise they would not be dormant in banks and building societies in the first place. I hear what the noble Baroness says about how prescriptive and narrow our vision might be of the needs of youth. I do not think that any Member of the other place can be other than very well advised of the challenges that youth provide in the community. We live in challenging times as regards young people. They are articulate and make their presence felt and, of course, if they engage in anti-social activity it affects the whole community in a very direct way. So we will be concerned to look at the provision for youth in the widest possible perspective and against local needs and local demands. We will pursue that objective intelligently. On other social purposes, we recognise that there will be demands from communities for such resources to be devoted to matters that benefit the immediate local community. The noble Viscount, Lord Astor, has had enough experience of the lottery legislation, which we happily debated together in past years, to focus on the Big Lottery Fund operating this. I make one thing clear. These resources going to the Big Lottery Fund will be separate. They will be separately accounted for and the lottery fund will merely be the intermediary and allocator. There is no question of them being in any way, shape or form absorbed in other activities, going towards the Big Lottery Fund costs or being used for other aspects of the Big Lottery Fund. I want to reassure the noble Viscount, Lord Eccles, who has also been prominent in our debates on these issues in the past, on that point. They would be separately accounted for. I had one direct challenge from the Liberal Democrat Benches—in fact, a number of challenges—from the noble Lord, Lord Shutt, about the fact that the Government have already created more effective, greatly to be welcomed local partnerships, which could be better distributors. I apologise, it was the noble Lord, Lord Tope. I shall turn to the virtues of the noble Lord, Lord Shutt, in a moment, but I shall start with the virtues of the noble Lord, Lord Tope, who mentioned the local partnerships. I am the first to identify the potential success of the local partnerships doing great work in the localities. He described how and where they were intended to act. Of course, they are distributors of public funds. We went out to consultation about these funds and the principle on which we should work. These are not public funds; these are private resources in banks and building societies. Of course we have to go in with a light touch. The noble Lord, Lord Newby, emphasised that and I remember the noble Lord, Lord Shutt, mentioning it in connection with who owns the banks and, therefore, how much they will participate. Of course, we have to go for the best and most consensual model, because this is a voluntary scheme and we want the maximum participation by the holders, the organisations that have dormant accounts. The noble Lord, Lord Tope, is a persuasive and articulate member of a number of bodies as well as of your Lordships' House, but I defy him to go to the banks and building societies and say, ““I think the Labour Government have exactly the right model and you could add your resources to the local partnerships, which distribute public money locally””. That is not quite how we envisage the world working. I understand the criticism, although I do not accept it, about the Big Lottery Fund being high on costs. It is not high on costs; it produces good figures on costs and on its distribution. It has the great advantage that not only is it a national organisation but it has regional offices and is represented in all the nations of the United Kingdom. It has a structure on to which we can latch, intelligently, the distribution of other funds, which are not public funds any more than the lottery proceeds themselves are government resources. We can put on to the Big Lottery Fund a distribution mechanism, which is all that we are doing. In Committee, there will be many questions about the efficacy of the Big Lottery Fund and I have not the slightest doubt that we will have lively exchanges on that matter. It is part and parcel of the main theme behind this legislation, which is to create not a state bureaucracy, or even an arm of a state bureaucracy, but a voluntary participative scheme to do good in the community by the distribution of resources and with the maximum amount of participation. That is why nearly every one of the structures that we have in place with regard to the Bill—of course, I shall listen to strong criticism of them in Committee—has a basis in considerable public support following the consultation process on the way in which the Bill should be created. I have heard the noble Baroness, Lady Noakes, the noble Lord, Lord Newby, and others say that the Bill is too limited in the number of financial institutions to which it addresses its objectives. The answer is that we are delighted with the progress that we have made and with having on board the two biggest financial institutions, in terms of their spread across the United Kingdom. There are more challenges regarding insurance policies and other financial institutions compared with the bodies that we have approached at present. I hear what noble Lords say: we should leave the door open. That is a debate to which I shall listen with great care. The Government believe that, on the whole, permissive legislation that offers up the hope and optimism of the future being fulfilled, rather than closing down everything within the narrow parameters of the year in which we are operating, is an advantage. So I shall listen to the points that are made on that. Effectively, a deal had to be struck and arrangements had to be made for a voluntary, light-touch scheme. That is why this scheme has certain limits to its ambition. I have been asked a range of detailed questions. There are two advantages to winding up at Second Reading. First, people hope that you do not continue for too long in any case. Secondly, I can offer the reply that where I invariably fail is in never having produced a satisfactory reply for the noble Baroness, Lady Noakes—so I am not going to succeed this evening. My great advantage is that I will be able to make fuller replies when we meet in Committee in the not-too-distant future. I have not the slightest doubt that several important points will be made in Committee, or that, from the original concept of what could be achieved by resources that currently benefit no one, we have the basis of a light-touch, voluntarily committed scheme. It can achieve a great deal through a distribution mechanism that has already stood the test of distributing funds for the lottery. I want to reassure the noble Viscount, Lord Astor, that we will not be returning to debates about where resources for the Olympics go, or anything else to do with the Big Lottery Fund. I trust that I will be able to reassure the Committee that these resources are channelled in a specific, controlled direction for the objectives that will eventually be identified in the legislation. On Question, Bill read a second time, and committed to a Grand Committee.