Dormant Bank and Building Society Accounts Bill [HL]

I was going to give a simpler answer, but I understand what the noble Lord, Lord Higgins, said. I shall address the noble Baroness’s question in a moment. Let us be clear: National Savings and Investments is fundamentally different from private sector banks and building societies. The function of National Savings and Investments is only to borrow money for the Government. All of the money it borrows from the general public is used to fund public spending. This means that money deposited with National Savings and Investments is already being used for the public good, as defined by the priorities established by the democratically elected Government. The liability to pay the National Savings and Investments customer lies with the Exchequer on the National Loans Fund, not with National Savings and Investments out of its own balance sheet. The answer to the noble Baroness, Lady Noakes, is quite straightforward: funds deposited with National Savings and Investments are classed as national debt and reduce the amount that the Government need to raise through taxation. Including NS&I in the scheme would mean that we were diverting money that would have been spent on public services to the objectives identified in the scheme. Therefore, the Government would have either to cut planned public spending or to find an alternative way to fund it, having seen these funds being diverted elsewhere. In other words, it would increase the burden on the taxpayer, who would bear the cost either directly through higher taxes or through high-interest costs on the national debt.