Dormant Bank and Building Society Accounts Bill [HL]

That is not a satisfactory response because that small detail should at least have been thought out. If the banks are to set up and promote this company, there must be some idea of whether it will have capital. I have not seen anything written about capital, so I suspect that it will not have it, and that makes a big difference to whether it will ever run out of money. If it does not have a shareholders’ equity buffer to take the first bit of pain, it is rather more important that we look at the potential consequences of the money running out. The Minister has relied on a couple of factors, the first of which is that it is highly unlikely that the fund will become insolvent. That is not the basis on which we legislate, because it is clearly possible that the reclaim fund will become insolvent for reasons of changed circumstances over time. When it receives the original £400 million to £500 million of dormant account money, a set of assumptions will be made about what the incidence of reclaim will be. With the best will in the world and with no malice or negligence, those assumptions could prove to be wrong over time, particularly because of the success of reuniting activities. It is therefore entirely plausible to ask about reserves. The noble Lord, Lord Newby, said that the banks should sort it out. That is a fine idea but it is not clear that they are obliged to do so. Once they have been excused their liability—which, as my noble friend Lord Eccles pointed out, is written into Clause 1—they will see that as the end of their liability. They will not feel obliged to underpin the scheme as it goes forward. The Minister spoke about FSA regulation. I have raised one question about the nature of prudential capital, on which I have not received an answer. We are assuming that the FSA knows how to regulate a reclaim fund. However, a reclaim fund does not exist anywhere in the UK and therefore it is no better equipped to make judgments about reserve levels than is a set of directors who will be appointed, so we are going into a curious situation. The Minister correctly spotted that I did not advocate a Treasury guarantee. My noble friend Lord Higgins, who was a Treasury Minister, said that the Treasury would never allow it. I was Treasury-trained as well and I know the answer to that question.