Dormant Bank and Building Society Accounts Bill [HL]

moved Amendment No. 57: 57: Clause 15, page 7, line 38, leave out from ““and”” to end and insert ““adjusted as set out in subsections (2A) and (4). (2A) Where the Big Lottery Fund has invested money under—”” The noble Baroness said: In moving Amendment No. 57, I will also speak to related Amendments Nos. 58, 59 and 63 in this group. These are probing amendments to Clauses 15 and 16 designed to tease out exactly how dormant account money is to be calculated and distributed. This is not particularly easy territory even for accountants so I apologise in advance if this is difficult to follow. Amendment No. 57 paves the way for Amendments Nos. 58 and 59 and amends Clause 15. The definition of ““dormant account money”” in Clause 15 is important because it drives the ““apportionable income”” of the Big Lottery Fund as set out in Clause 16 and hence how much can be distributed under Clauses 17 to 20 to the various countries for good causes. The definition of ““dormant account money”” in Clause 15(2) starts with the amounts transferred by the reclaim fund. That is not difficult. Then it moves on and ““includes the proceeds”” of money, which is invested either under the National Lottery Act or under this Bill. I believe that this concept of including proceeds is a problem because it focuses on the return from an investment but ignores the initial investment. For example, if the Big Lottery Fund receives £1,000 from the reclaim fund and invests £300, it has £700 left in cash in its bank account. That is what is available to pass to distribution bodies. There are no proceeds from investment because it is simply invested money, so Clause 15(2) says that the amount of dormant account money is £1,000—the amount received from the reclaim fund—which has to be apportioned under Clause 16. But that cannot be right because there is only £700 in the bank ready for distribution. The effect of my Amendments Nos. 57 and 58 would be that, first, you deduct any money which is invested and then add the proceeds from those investments, including interest. I have drafted that in for the sake of completeness as ““proceeds”” is rather a vague word. It would then work out that the dormant account money in the year of cash outflows for investment would reduce the money before it became apportionable income. In my example that would be £700 because it would have reduced by the amount invested. Amendment No. 59 also picks up another anomaly in the calculation of dormant account money. Let us suppose that the Big Lottery Fund has made a loan of £100 when it distributed some money in year one. In year five, the money is paid back in full but with a return, probably interest, of £25, so that £125 actually flows back to the fund. That extra £25 is not within the definition of dormant account money in Clause 15(2) because it is neither money received from the reclaim fund nor the proceeds of specified types of investment in Clause 15(2), and it does not appear to be dealt with in any other way. My Amendment No. 59 says that the excess over the amount originally loaned or granted is added to the dormant account income. That just leaves making sure that the capital amount of any loan or grant, when it is repaid, is treated correctly. The Bill appears to be silent on that, too. The £100 in my previous example, when it flows back as a repayment, appears in a form of limbo. My Amendment No. 63 tackles this by saying that the amount repaid up to the amount of the original grant or loan is not treated as apportionable income and is available for expenditure only on the category of income from which it was first made. I am not sure that the wording precisely achieves this, but the intention is that if a loan or grant was made from money for meeting English expenditure, it should continue to be treated in that way, so that, if my £100 was a loan to an English youth facility, on repayment it would be recycled within the English expenditure category and would hence be eligible for meeting further English expenditure, not treated as part of the apportionable income whereby other countries got a bit of it. I hope that the Minister has followed those points. The amendments are offered in a spirit of seeking to make the Bill work properly in practice. I beg to move.