Dormant Bank and Building Society Accounts Bill [HL]

moved Amendment No. 19: 19: Clause 5, page 4, line 9, after ““money”” insert ““to the Pension Protection Lifeboat Fund established by section (Pension Protection Lifeboat Fund) or”” The noble Baroness said: I shall speak also to Amendment No. 45. I said at the beginning of our session that we thought the Bill was too narrowly drawn in relation to the purposes to which the money gathered under the dormant accounts scheme could be put. The amendment is intended to widen the way in which the money can be used on a national basis. Amendment No. 19 would insert some additional words into Clause 5(1)(c) so that a reclaim fund could transfer money either to the pension protection lifeboat fund set up by my Amendment No. 45 or to the Big Lottery Fund. The amendment itself does not create an obligation on the reclaim fund to transfer money to the lifeboat fund, but there is a Treasury power of direction in Clause 5(4) that would allow the Treasury to direct a reclaim fund to give effect to a specified object. Transferring money to the lifeboat fund would be one of the reclaim fund’s objects. Amendment No. 45 would insert a new clause after Clause 10 setting up the pension protection lifeboat fund. Noble Lords who followed the passage of the Pension Bill in our last Session will recognise the drafting of that amendment. It draws very heavily on the amendment which was passed by your Lordships’ House during the passage of that Bill but overturned in another place before the Bill became an Act. The lifeboat fund is designed to ensure that those unfortunate individuals who lost their pension entitlements prior to the setting up of the Pension Protection Fund get pension payments at the same level as those who qualify for payments from the Pension Protection Fund. I shall not recite the whole messy history here. The Parliamentary Ombudsman has said that the Government should provide compensation to those who lost their pensions. The Government have refused to do that and have instead introduced a financial assistance scheme that gives some additional pension payments but certainly not at the level that would be paid under the Pension Protection Fund. The amendment does not address the many concerns that there are about the efficiency of the financial assistance scheme in delivering additional pension payments but it does help to address the need to increase the level of payment beyond the FAS level. The lifeboat fund, which would be run by the PPF, would pay top-up pensions up to the PPF levels. Under subsection (4), the Secretary of State could make loans to the lifeboat fund to enable the pension top-ups to be paid until sufficient had been received from a reclaim fund. If the reclaim fund ended up transferring more than was needed, subsection (6) would require the funds to be returned to the reclaim fund, which could then transfer the money to the Big Lottery Fund. When we moved our amendments to the Pensions Bill, we also tried to set up an asset recovery agency, which was designed to gather in dormant assets to pay for the lifeboat fund. That was widely misreported as being aimed only at unclaimed pension assets—about which there are technical issues, as well as strong opposition from the pensions industry—but in fact the agency was designed so that dormant bank account money would also have been covered. We believe it is important not to let the Bill pass without creating the opportunity—it is no more than that—for dormant bank account money to be used to supplement the FAS level of support. The work being undertaken by Mr Andrew Young’s review of scheme assets is identifying some further money for the FAS, but the interim review did not find enough to fill the funding gap. Today’s papers are saying that Mr Young’s final report will say that there will be enough money only if the Treasury matches certain elements of funding, and it is no surprise to learn from the newspapers that the Treasury does not want to stump up. Hence, these amendments are potentially important in ensuring that decent pensions are delivered to those who were unfortunate enough to suffer pensions loss before the PPF came into force. I should say that that we support money being spent on the matters listed in Clause 17 and, in particular, we support spending on youth facilities, provided that it produces things that young people actually want and not what some well intentioned committees think they want. At Second Reading, I asked some questions about that as the Prime Minister had been talking about £670 million being spent on youth, which is way ahead of the amount that will be available from the dormant accounts scheme according to the figures from the British Bankers’ Association and the Building Societies Association. I asked the Minister to cover that question in his winding-up speech but he chose not to do so. I have heard from the Commission on Unclaimed Assets that the £670 million was a classic bit of government spin because it included already budgeted government expenditure and existing lottery money amounting to £495 million. What a surprise! The additional amount going to youth projects, being spun as £670 million, is, I understand, somewhere between £100 million and £150 million, depending on whom you ask. So, we can fulfil the Prime Minister’s promises to fund youth and still have a lot left over, even on the cautious estimates being put up by the banks and building societies. Few would deny that spending money on youth projects is a good thing, but I hope that the other end of the generation spectrum is not forgotten when the dormant account money is handed out. Pensioners and prospective pensioners forced to rely on the stingy FAS support payments should be among those first in the queue for help, and I hope that noble Lords will support these amendments, which create the ability to give some very deserving pensioners a slightly better income in retirement. I beg to move.