Dormant Bank and Building Society Accounts Bill [HL]

moved Amendment No. 1: 1: Clause 12, page 7, line 31, at end insert ““, and to be able to trace all such accounts at any one time”” The noble Baroness said: My Lords, I wish to speak to all the amendments together, as they address a principle that is at stake: enhancing reunification of bequeathed assets with the beneficiary, however small a benefiting charity may be. I have tabled these sharply defined amendments to enhance the amendment moved by the noble Baroness, Lady Noakes, and passed by the House on Report, providing for a triennial report to Parliament on the working of this Bill. These amendments simply provide for a clearly defined, specific enabling power. They would not impose any additional burdens or give the Secretary of State extensive powers. Instead, they would strengthen parliamentary accountability. The wording has been specifically chosen to reflect the helpful comments made on Report by noble Lords. This Bill will have a considerable impact on the charitable sector. I declare an interest as vice-president of Marie Curie Cancer Care, which, along with 53 other charities, is part of the Unclaimed Assets Charity Coalition. The coalition supports these amendments. Amendment No. 1 is crucial. Without it, the register would not work as a one-stop shop search facility, which is essential if charities are to be able to conduct searches quickly and cost-efficiently. In the case of deceased estates, information about the financial institution in which the asset is held is unlikely to be known, hence the difficulty in utilising the new industry tracing scheme, which requires an approach to each and every individual bank. My amendments would maximise the incentive for banks and building societies to reunite people, including the beneficiaries of wills, of which many are charities, with what is rightfully theirs—their assets in dormant accounts—while also ensuring that, where reunification efforts prove fruitless, as much as possible is available for reinvestment in society. As drafted, the Bill will not require financial institutions to make data on unclaimed assets more easily accessible to potential beneficiaries of legacies. Instead, banks and building societies will simply be asked to publicise the fact that they hold unclaimed assets. This will be of no help to people who do not know which institution is holding a lost asset. Crucially, it will be of no help to charities trying to trace lost assets bequeathed to them from deceased people’s estates. This will be a particular problem for small charities. Why does it matter? One in seven people who die with a valid will leave legacy gifts to charity, which, on average, comprise 5 per cent of the total estate left, so there are potentially large sums of legacy income that have yet to reach the named charities. Legacies are an extremely important source of voluntary income for the charitable sector. For example, 46 per cent of the British Heart Foundation’s voluntary income is from legacies, amounting to more than £47 million last year, while Cancer Research UK relied on legacies for a third of its income. There may have been many more bequeathed amounts that could have gone to the charities, but these are unknown at present. The banking and building society industry has introduced a welcome new online tracing scheme, the launch of which coincided with the Bill. However, while this is a step in the right direction, it is completely inadequate and does not create the register needed if beneficiaries, including charities, are to be more easily reunited with their assets. The online tracing scheme is not straightforward. It requires knowledge of which institution holds the account and it does not enable searching across a broad range of banking institutions. Let me now address a few of the issues raised by your Lordships on Report, when I proposed giving powers to the Secretary of State to establish a register if needed. The noble Baroness, Lady Noakes, suggested that charities want access to accounts long before they have become dormant. I have been reassured by the coalition that the key point is to establish a system where basic details of accounts can be searched for by registered charities after dormancy has been established. The charities may have to wait, but so be it. The Minister, the noble Lord, Lord Bach, mentioned cost, stating that a register would be expensive. The Unclaimed Assets Charity Coalition believes that a register should be no more costly to run than a voluntary scheme. In fact, a register could be self-financing and need not be maintained by the Government. Moreover, in the longer term, having such a system in place would reduce administrative burdens. A central register would establish a consistent system and format for information about dormant bank and building society accounts and would facilitate searching, particularly by small charities which do not have the manpower to undertake widespread searches, as well as shorter processes for financial institutions to locate and return dormant accounts to their rightful owners. The Minister also raised confidentiality issues. The coalition has sought advice from Withers legal partnership, which has now been shared with the Treasury. Withers confirms that data protection and fraud issues would not be a barrier to a register. I can therefore assure the House that the amendments would not breach confidentiality of information agreements. Indeed, a register would be less open to problems of data protection than the scheme operated by industry at the moment. The industry’s new online tracing scheme operates on a central website portal where people can enter their personal details. These details are then sent to a number of banks and building societies around the country, increasing the risk that information could be intercepted or diverted. In contrast, a central register would hold minimum data centrally, such as the name of the account holder, their date of birth and their previous or last known address. The register would enable someone to establish only whether there was a match between a legatee, for example, and a dormant account. It would then direct the charity conducting the search to a specific institution. The charity would still be required to go through stringent proof-of-identity processes with the institution holding the asset. That would be no less rigorous than any other proof-of-identity process required to access accounts. A number of other tried and tested schemes around the world use a register system, including in the US and Australia. I agree with the point raised by the noble Baroness, Lady Noakes, that accountability to Parliament is vital and I am sorry that she is unable to be in her place today. My amendments would strengthen that accountability and enable Parliament to effect its wishes without recourse to further primary legislation. I worry that there is a presumption that assets in dormant accounts are somehow the state’s money. They are not. These assets are not ours, the Government’s or Parliament’s, and they are certainly not the industry’s. They are unclaimed assets in dormant accounts that in many cases have been bequeathed, as a proportion of a deceased estate, to a charity. The tightly drafted amendments would help to ensure that people’s dying wishes were respected. This is a principle that transcends party politics and I hope that your Lordships will feel able to support it. I beg to move.