Clause 5
Dormant Bank and Building Society Accounts Bill [Lords]
11:15 am
Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)
I beg to move amendment No. 26, in clause 5, page 4, line 32, at end insert—
‘(4A) Any direction given under this section may not be made unless a draft statutory instrument containing such a direction has been laid before, and approved by a resolution of, each House of Parliament.’.
The amendment continues in the spirit of the previous amendment tabled by the hon. Member for Taunton, and I am not sure whether it holds any greater chance of success. I want to introduce into clause 5 a power to ensure that, where the Government issue a direction to the reclaim fund, that direction is subject to parliamentary scrutiny. As the Government frequently point out—doubtless they will do so again today, perhaps when we have a stand part debate on the clause—the reclaim fund is a private company and the Government will not have a great deal to do with it. As with any other private company, it will be regulated by the Financial Services Authority. Yet, when we look at the detail of the clause, subsection (4) will give the Treasury the right to “give a direction” to the reclaim fund, requiring it
“to give effect to any specified object that it has, or...to comply with any specified obligation or prohibition imposed on it by a provision that its articles of association are required to make under Schedule 1.”
We touched on the issue briefly on Second Reading last week. I asked the Minister if it would be possible for the Treasury to give a direction to the reclaim fund to transfer more money to the Big Lottery Fund. After a while, we got the answer—I paraphrase significantly—yes. It will be possible, in exceptional circumstances, to use the power of direction to encourage or require the fund to transfer more money.
If the Government intend to have such power of direction, it should be subject to proper parliamentary scrutiny. In such circumstances, the Government would be saying, “We do not agree with the prudent decision that the board of the reclaim fund has made to hold back this amount of money. We believe that, in the interests of maximising the amount of money in the Big Lottery Fund, the right decision is to transfer across another £20 million, £30 million or £40 million.” The Government’s exercising such powers without parliamentary scrutiny is not appropriate. What if the reclaim fund is left short? We had the assurance in the other place that the financial services compensation scheme would meet the needs of customers, but it would not be satisfactory for the private sector to pick up a shortfall through the FSCS.
There is a need for proper parliamentary scrutiny of the directions that the Government can give to the reclaim fund. Without that, the directors of the reclaim fund will be in a difficult position. We are giving the Treasury powers without proper parliamentary scrutiny. The Minister ought to accept the amendment, in the spirit of trying to improve the scrutiny of the operation of the reclaim fund. We are told that the fund is a private body; but at the end of the day, it will be subject to those Treasury directions.