Dormant Bank and Building Society Accounts Bill [HL]

moved Amendment No. 4A: 4A: After Clause 1, insert the following new Clause— ““Reserve power to control the transfer of balances to reclaim fund (1) The Secretary of State may make regulations specifying the conditions under which the transfer of the balance of a dormant account to the reclaim fund might occur, including the establishment of a register of dormant accounts. (2) No regulations may be made under subsection (1) unless a draft of a statutory instrument containing the resolutions has been laid before, and approved by a resolution of, each House of Parliament.”” The noble Baroness said: My Lords, I have tabled the amendment because of the huge impact the Bill can have on the charity sector. I declare an interest as vice-president of Marie Curie Cancer Care, whose tireless work, as your Lordships need no reminding, provides nursing care to cancer patients. The Bill is important not only for Marie Curie Cancer Care, but for the other 53 member charities which comprise the Unclaimed Assets Charity Coalition. It is worth highlighting just how representative the coalition is of the charity sector. As well as the National Council for Voluntary Organisations, which represents 5,400 voluntary organisations across the country—it has itself recently joined—the coalition’s members include charities such as the RSPCA, the Salvation Army and the enormous Cancer Research UK. If we ignore the coalition, we run the risk of ignoring the sector as a whole. As drafted, the Bill appears to ignore the coalition. My amendment takes its interest into account. There are two issues, both of which would be supported by a reserved power being included in the legislation. First, as the NCVO has argued in its briefing which has been circulated to all Peers, should a voluntary scheme prove unsuccessful there must be mechanisms in place to enable the Government to make mandatory the transfer of unclaimed assets from banks and building societies to the reclaim fund. This would ensure that the amount of money available for reinvestment in society is maximised—which, after all, is the Government’s stated motivation behind the Bill. The inclusion of reserve powers would not mean that the Government would have to make use of them, but would give them that option, should it prove necessary, without recourse to further primary legislation. This was a recommendation in the Treasury Select Committee’s report and, while there are merits in the suggested light-touch voluntary scheme, we must be sure that there is enough take-up of the scheme by the banks. My concern is that the removal of unclaimed assets from a bank’s balance sheet may mean that there is little incentive for them to participate. There is also no international precedent for a dormant accounts framework run on a voluntary basis. In Ireland, Australia, New Zealand and Canada, participation by banks and building societies is mandatory. It therefore seems right to propose the introduction of a reserve power into the Bill. On the specific issue of a register for unclaimed assets, the aim of which would be to improve reunification efforts, my own view is clear: I would like to see this Bill bring in a mandatory register. It may be that the answers already provided by the Minister will, in part, cover this, but I shall listen with interest to the Minister’s response. Having listened to noble Lords in Grand Committee, I got the firm impression that a reserve power amendment would be put forward on Report, but as no amendment was tabled, I have tabled this amendment. It is vital that we include provisions in the Bill that ensure that we maximise the incentives for banks and building societies to reunite people, including the beneficiaries of wills, many of which are charities, with what is rightfully theirs—their assets—while also ensuring that where reunification efforts prove fruitless as much as possible is available for reinvestment in society. While a triennial report to Parliament, as proposed in an amendment tabled by the noble Baroness, Lady Noakes, would enable government to monitor the scheme’s progress and make recommendations for improvement, there would be no mechanism in place to enable Parliament to implement its wishes should it then decide that a voluntary scheme was not working. That is a significant gap, and I hope the amendment will plug it. In their response to the House of Commons Treasury Select Committee report on unclaimed assets, the Government argued that including reserve powers would not be a good use of Parliament’s time. I struggle to reconcile that statement with the simple fact that it might save parliamentary time to include it on the face of this Bill, rather than having to return later. In fact, if a reserve power is not included and the voluntary approach fails, Parliament would have to pass primary legislation, and thus go through the whole debate again before the mandatory register could be established. That was why I thought we should have something in the Bill. The Government have included reserve powers in previous legalisation, such as in the Charities Act 2006 in relation to the regulation of fundraising standards, so there is a precedent. I wonder whether we risk losing sight of what is at stake here. This is a technical Bill, but surely a simple principle also applies: it is that these are not our assets, they are not the Government’s assets, they are not Parliament’s and they are certainly not the industry’s, however much it might profit from them. They are unclaimed assets that belong to individuals and which in many cases have been bequeathed to charity as a proportion of a deceased’s estate. Of course, in cases where reunification efforts prove fruitless, such unclaimed assets would be to the public good and should be available to channel back into society. However, where it is possible to reunite people with what is rightfully theirs, that would seem to be the right thing to do. That is why the 54 charities that I referred to in my opening remarks are asking for help. One in seven people who dies leaves a valid will including legacy gifts to charity. On average, those gifts total 5 per cent of the total estate, so there are potentially large sums of legacy income that have yet to reach the charities named in the wills. As many of us know, legacies are a key part of the income stream of the voluntary sector. For example, 46 per cent of the British Heart Foundation’s voluntary income comes from legacies, which came to over £47 million last year. One third of Cancer Research UK’s voluntary income comes from legacies, which was more than £135 million last year. In all, legacy income to the sector amounted to £1.5 billion last year. The sad truth, however, is that as drafted, the Bill—as the Minister knows—does not compel financial institutions to make data on unclaimed assets more easily accessible to the general public and to charities. Instead, banks and building societies will be asked to publicise the fact that they hold unclaimed assets, which will be of no help to people who do not know which institution is holding a lost asset and, crucially, it will be of no help to charities trying to trace lost assets belonging to deceased people’s estates. That is why it is important that we strengthen the Bill by ensuring a mandatory register is included in its provisions, whether that be by reserve power or by a provision that a mandatory register be created on the commencement of this Act. I urge the Government use the unique opportunity of the Bill to get the system right for the charitable sector. I beg to move.