Dormant Bank and Building Society Accounts Bill [HL]

These are important amendments. I completely agree with the noble Baroness, Lady Noakes, about the phrase ““social investment wholesaler””. I thought that I knew something about this sector, but I do not think that I have ever heard the phrase before. Somewhat bizarrely, the Bill obfuscates what is intended in a situation when the Government have a clear view about what they mean; that is, a social investment bank in the terms set out in Amendment No. 76. Changing imprecise, obscure language could enable, in principle, money to be spent under this heading on a whole raft of support for voluntary sector organisations, which has nothing to do with investment. The argument for changing that in the terms set out by the noble Lord, Lord Hamilton, is strong and unanswerable. In a sense, my next question is even more important. Amendment No. 75 takes us back to our discussion last week on the Government’s priorities. I thought that then the Minister said that the Government had not yet set their priorities between the three headings and that all was up for grabs. Earlier today, however, we were told that the top priority will be youth affairs, which is why the Secretary of State concerned is the Secretary of State for Children, Schools and Families. The burden of the case put forward by the noble Lord, Lord Hamilton, with which I have a great deal of sympathy, is that of the three headings the one most likely to yield the most benefit for the community per pound spent is the third one for the reasons that he gave. By putting £1 in the social investment bank, you very readily generate several multiples of that pound from other sources in ways which simply do not happen under the first heading. The second heading is a pure distribution of funds for another purpose. So the principle of having a priority under this heading in order to make sure that the money generates the maximum possible return is a good one. There is also a simple logic to dormant bank accounts being used to establish a bank. It sounds and feels right and I hope that it will be established. My other concern, which I expressed last week, is that, unlike paragraphs (a) and (b) in Clause 17, which are mandatory, paragraph (c) follows an ““or””. This implies that the Government could decide that they were not going to have a social investment bank at all. That would be a big missed opportunity. I do not think that is what the Government mean but it is certainly what the Bill says. Amendment No. 75 would therefore reverse the ““or”” and almost make the social investment bank the first heading. I am agnostic as to whether £250 million is the right threshold. It is important that the social investment bank be an initial beneficiary of moneys from the scheme because the biggest bulk of money will go across to the reclaim fund in year one. Unless the social investment bank is established at that point, it is highly unlikely that there will be a big-enough flow of money to establish it. I am less clear about whether you need £250 million to do it. I know that it has been argued that you need £350 million to establish a social investment bank, but that is a heck of a lot of money, particularly if, as the noble Lord, Lord Hamilton, said, you can lever in many multiples of it in any event. Let me explain my concern with having a high threshold. Suppose that in year one, which I say is the crucial year, £500 million goes into the reclaim fund. If I were sitting in the reclaim fund, I might well want to hold on to at least half of that. I would not know how much of it was going to be reclaimed and, therefore, the amount that I might have available could be a fraction less than half of the total amount that comes across. I am not sure that £250 million is the right amount but the principle of the amendment is sound. I suspect that the Minister will not be able to give us an assurance that, come what may, a social investment bank, in the terms set out in Amendment No. 76, is a guaranteed outcome of the passage of the Bill.