Dormant Bank and Building Society Accounts Bill [HL]

Oratory is difficult enough without the interruption of a Division, but I will try to recall that I was trying to spell out the limited sums that we expect to be available. I said that we expect between £250 million and £350 million from the banks and up to £150 million from building societies, which will take time to come through. We also expect that the very significant reuniting effort that the banks and building societies are making throughout 2008—to which they are committed, in order that the money should be restored to its proper owners, if it can be—may have a significant effect on those figures. The reclaim fund also must make provision against future successful claims from people who seek to be reunited with their money after 15 years when the money has been transferred. So we are dealing with some uncertainties in this area and the noble Lord, Lord Hamilton, as the nub of his important points, asked me specifically about this, but I am afraid I have to be less than specific in my answer. I have answered one of the points that he emphasised in his amendment; we cannot specify £250 million. At the moment, there is no guarantee that that figure will be available. I congratulate the noble Lord on his amendment. It is broadly on the right lines and he made strenuous efforts to deal with a complex topic. I hope that he thought it was complex, because the Government do and they consider that they have quite a lot of work to do in this area. That is why we are eager to keep the Bill as it stands, which makes proper reference to the possibility that we cannot be specific on the scheme itself. I hope I have been able to explain the interesting comments of the noble Lord, Lord Hamilton, about our own social investment wholesale institutions. These have elicited considerable criticism and the Committee will expect me to respond to that in due course. We are wrestling with the same issues as the noble Lord, Lord Hamilton, and it is obvious that a great number of them remain to be resolved. With his usual acuity, the noble Lord, Lord Newby, emphasised the ““or””. We do not know how much money will be available to the priorities. We want to go ahead with the top two priorities but the third concept in the clause is dependent on resources being available. We also have to respond effectively to some of the questions that have been addressed today. I hope I shall be able to demonstrate to the Committee that it is not for the want of trying because the Government have done a great deal of work in this area. At the very least I shall be able to defend our new terminology. The noble Viscount, Lord Eccles, asked whether there had been any study on this issue and whether any representations had been submitted on the role. As the Government said to the Treasury Select Committee on this, we are studying the issue carefully. We have not had many representations but work is ongoing on this matter. We are aware of the valuable work of the Commission on Unclaimed Assets, which is helping us, but I do not think there have been any specific representations along the lines the noble Viscount, Lord Eccles, had hoped to identify. As to the more general issues, we think this priority should remain within the Bill in addition to the primary ones for England. In her opening speech the noble Baroness, Lady Noakes, was emphatic that I should make clear that this is about England—and it is. The devolved Administrations have some decisions to take on this matter but we intend to promote the primary priorities of England as opportunities for young people, financial capability and financial inclusion. However, we can see the potential benefit of the third concept and, if resources permit and we resolve the outstanding issues, we would in due course seek to activate it. We have come to this conclusion not only through government resources but as a result of evidence that we have received from a wide-ranging review on the future role of the third sector. Some doubts were expressed as to whether charities were taking any cognisance of the Bill. Of course they are. They have a very important role to play in supporting the third sector. The wide-ranging review carried out by the Treasury and the Office of the Third Sector, as well as evidence which the Commission on Unclaimed Assets has provided, suggest that the social investment market is underdeveloped and that the Government ought to think about filling a defined gap. That is why we see the merit of this institution, which would invest in the long-term sustainability of the third sector and boost the social investment market, which has some difficulties in this respect. We would want to use a share of the unclaimed assets fund to support the creation of this body. I hear what the noble Baroness says—that she has never heard the word ““wholesale”” in this context. Governments are rarely accused of being innovative and novel, but here we are putting forward what we believe to be a new concept. Therefore, it is not surprising that we give it a new name. We think that it will fulfil a wholesale role, as I hope to demonstrate in a moment, so it is entirely appropriate that the concept should be included in the title. The social investment wholesaler would be a body with finance that it would deploy to strengthen and develop the capacity of specialist lenders and investors, attract new private capital and enable third sector organisations to access the finance that they need. So the wholesaler could finance the activities of those who already give financial or other support to the third sector, such as future builders and community foundations, through finance advisory work and investment management. The aim would be to address what we define as a gap in the market of our existing front-line investors and lenders. This would be a wholesale distribution of funds, which could also make the links between investment banks, charitable trusts and foundations. We have testimony to the gap that exists to the detriment of charities, foundations and the third sector, but we want to ensure that the social investment wholesaler should not be given any unfair advantage in the existing market. If I had not alluded to that point, I have not the slightest doubt that the noble Baroness, Lady Noakes, would have referred to it in her later speeches. On the other amendments in the group, the noble Lord, Lord Hamilton, attempts to set out in some detail a definition of a social investment bank and gives us the figure of £250 million. As I am sure he will agree, we would be loath to put in legislation a figure that we might not be able to realise, as nothing could take off if we did not have the available assets. We considered vehicle and institution as well as bank, but we think that wholesaler most accurately reflects the problem that we are trying to address. There are already a number of financial institutions that lend or invest in the third sector at the retail level. The wholesale concept places the emphasis on the gap in the market above existing front-line investors and lenders. That is why it is a novel concept with novel terminology. With respect to the detailed description of the wholesaler’s activities, I have said that we have considerable work to do on this area. However, our view is that there is no need at this stage to define the precise activities of a social investment wholesaler in the Bill. If we did so, we might run into problems later as we produce solutions to the issues that we have still to confront. We are confident that the definition in the Bill is wide enough to allow for the activities that I have described. The current text already goes into greater detail on the descriptions of the youth services and financial capability inclusion—and so it should, because this is a novel part of the Bill. With regard to funding, the Government have identified since 2005 a clear and consistent set of priorities for the use of unclaimed assets in England and we remain committed to them. Given the importance that we attach to addressing those needs, it would not be appropriate to prioritise support for a social investment wholesaler ahead of investment in services for young people and financial capacity or inclusion. Hence, we have the phraseology in this clause to which the noble Lord, Lord Newby, drew our attention. In addition, there is continuing uncertainty as to how much will be available, as I have indicated, and therefore the Government are seeking in the Bill to create a novel concept which fills a defined gap in the market. We are aware that considerable work remains to be done on how this will work and that is why we have expressed the priorities, two of which can be worked upon immediately; the third might take a little more time. Given the huge amount of work done on the other side of the Committee by the noble Lord, Lord Howard, and, no doubt, by the noble Lord, Lord Newby, and the noble Baroness, Lady Noakes, I hope they will recognise that the Government’s position is tenable and support it by withdrawing their amendments.