Dormant Bank and Building Society Accounts Bill [HL]

moved Amendment No. 21: 21: Clause 5, page 4, line 27, leave out subsection (4) The noble Baroness said: Amendment No. 21 deletes subsection (4) of Clause 5 on a probing basis. Subsection (4) allows the Treasury to give a direction to a reclaim fund requiring it to give effect to any specified object that it has—the objects are set out in subsection (1)—and it also allows the Treasury to direct that the reclaim fund will comply with the obligatory articles of association, as set out in Schedule 1. Will the Minister explain why the Treasury needs these powers and how it intends to use them? Why, for example, does it have the power to tell a fund to give effect to one of its objects? Does that allow the Treasury to set the financial policy of the reclaim fund, whether it is the reserving policy or perhaps its investment policy? Can the Minister explain why the Treasury needs to be the enforcer of the fund’s articles? It is also the case that the reclaim fund will be under the care and supervision of the Financial Services Authority—we established that yesterday and Schedule 2 gives effect to it—but why does the reclaim fund have to be interfered with by both the Treasury and the Financial Services Authority? We saw in relation to Northern Rock what a mess can be made if more than one body has responsibility for a financial institution. Would it not be more efficient if only one regulator were involved and not two? The Explanatory Notes indicate that the British Bankers’ Association will be setting up the reclaim fund, as I imagine that the Government will want the fund to be classified to the private sector. Yesterday, the Minister described the reclaim fund as a private sector body, but does he expect it to be classified as such in national accounts terms? Is, then, the Government’s position that the existence of the powers of direction does not cause the reclaim fund to be classified to the public sector, giving the Treasury power of control over the fund? Would the same conclusion be reached if the Treasury ever exercised its power of direction? The Minister will be aware that it is rather unusual to have a private sector body with powers of direction over it, so I think it is right that we probe, first, why the Government need the powers and, secondly, the implications of those powers. I hope that the Minister will be able to respond to that. I beg to move.