New Clause 2
Dormant Bank and Building Society Accounts Bill [Lords]
9:00 am
Martyn Jones (Clwyd South, Labour)
I beg to move, That the clause be read a Second time.
It is pleasure to serve under your chairmanship, Dr. McCrea. It is interesting to be sitting on this side of the Committee after so many years sitting in the Chair.
In moving the new clause, I am addressing what can best be described as the elephant in the room. Throughout the life of the Bill and long before its existence, the use of a voluntary rather than mandatory scheme has been a controversial issue in the debate on dormant accounts. The new clause tackles that issue head-on. To some extent, I feel that it reaches a compromise and that there is something in it for people in both camps.
I start by underlining what the new clause is not. It does not suggest the introduction of a mandatory scheme. It seeks to enhance the nature of the voluntary scheme, and although it could be used to create a mandatory scheme, that is not its core purpose. It is, however, a crucial bargaining tool that would ensure compliance from the banking industry in handing over money voluntarily to the reclaim fund.
Banks and building societies will be more likely to co-operate if the alternative to non-co-operation is enforced co-operation. In that sense, the new clause would function much like a veto at the Council of the European Union. Its most useful legislative quality would not be its use, but rather the threat or shadow of it looming in the background, which would ensure compliance and debate.
The new clause has been mentioned in Committee, and I should like to address some of the issues raised thus far. The hon. Member for Fareham does not share my cynicism about the banks’ co-operation with the reclaim fund, but I suspect that he will not deny that the definition of dormancy in the Bill leaves leeway for interpretation. Such leeway can be interpreted either advantageously or disadvantageously from the banks’ point of view. That is entailed in the voluntary scheme. The hon. Gentleman will also acknowledge the risk of partial co-operation and agree that there should be no occasion when the banking industry realises that it can simply fob off the reclaim fund with a pittance.