Dormant Bank and Building Society Accounts Bill [HL]

Many, of course, my Lords, but indefinable numbers would be involved, given the colossal assets of the society, its great reputation for effectiveness and its size. As the noble Baroness indicated, the eight represent a substantial proportion of the resources that are likely to emerge from dormant accounts. It is reasonable therefore for the Government to say that local societies can do an enormous job in their localities and should be encouraged to do so, and that we want to encourage that local activity by such local institutions. It is a different matter altogether with the eight that are truly nationwide—if not all by name; a relationship between location and point of origin has long been departed from because of the sheer size of the operation. The noble Lord, Lord Naseby, has to face up to facts. Of course I enjoyed his exemplar of the best assets and virtues of mutualisation, but anybody would think that no building society had ever demutualised, that there had never been an occasion when people vested with these virtues had ever taken a different view about the role of the building society and its transformation. We have seen that occur; and the noble Lord knows a great deal more about it than I do. All I am indicating is that there is a difference between the commitment of a local building society and that of the large institutions. During consultation we were challenged to define the credible threshold. We defined it as assets of about £7 billion. Under the Bill, 51 out of the 59 building societies are defined as local. Only eight will be concerned with the wider distribution of resources. This is surely a perfectly reasonable position for the Government to adopt. The noble Baroness, Lady Noakes, was right to say that the Government were concerned about equity across the nation and about there being less money available for wider projects across the nation if all building societies were allowed to follow the local path and look to their local areas, if that could be defined in certain circumstances. Of course, she is right about that. That is the basis of the Government’s case. There is a difference between resources that ought properly to be determined locally and resources from nationwide institutions whose dormant account money could properly be directed towards the benefit of local communities, but be defined in terms of national priorities. We have been clear about the basis on which we think those resources should be allocated. We shall debate these issues later. I hope that the House will forgive me if I have delved too far into issues concerning the Big Lottery Fund and its distribution role. Later amendments will require the Government to address themselves from the Dispatch Box to the pertinent points that will be made from the Opposition Benches in that regard. However, there is great advantage and fairness in distributing huge resources for the benefit of communities right across the nation as opposed to the arbitrariness that would flow from the amendment of the noble Lord, Lord Shutt. The small building societies are concerned and knowledgeable about their localities. They are constantly in contact with them and are able to distribute resources to them accurately and effectively, in ways which the Government and the whole House commend. The eight big institutions will generate a huge percentage of the dormant account resources, as we see from the figures, and therefore a different distribution mechanism will be necessary. I know that there will be criticism of the distribution mechanism the Government have chosen, but suffice to say that we have chosen one which is involved in nationwide distribution but has regional and local branches and, of course, understands the separateness of the nations of the United Kingdom in this regard. That is the basis of the role of Big with regard to distribution. I cannot go any further at this stage because there is an issue of principle between us. The noble Lord, Lord Shutt, made it clear right from the beginning that a building society is a building society, that is has strong local links and should be allowed to deploy whatever resources come out of its dormant accounts as it sees fit. We seek a clear differentiation between resources that would benefit discrete localities and bigger resources that could more effectively be distributed through another route. That is the bone of contention between us. I see that I have not persuaded the noble Lord, Lord Shutt, but I give way to the noble Lord, Lord Naseby.