'(1) The Treasury shall carry out a review of—
(a) the operation of this Part, and
(b) the effectiveness of the efforts made by financial institutions to secure that those entitled to money in inactive accounts are made aware of the fact.
(2) In reviewing the operation of this Part the Treasury shall in particular consider—
(a) how many banks and building societies have transferred balances as mentioned in section 1(1) or 2(1);
(b) how much money has been transferred and how promptly;
(c) how effective have been the arrangements for meeting claims made by virtue of section 1(2)(b) or 2(2)(b).
But the review shall not consider the activities of a reclaim fund in so far as they are regulated activities for the purposes of the Financial Services and Markets Act 2000 (c. 8).
(3) The Treasury shall make arrangements to enable anyone with an interest in any aspect of the review to make representations, and shall consider all representations received.
(4) The Treasury shall set out the results and conclusions of the review in a report and lay it before Parliament.
(5) The report must be laid within three years from the date when a reclaim fund is first authorised.'.— [Ian Pearson.]
Brought up, and read the First time.
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I beg to move, That the clause be read a Second time.
With this it will be convenient to discuss new clause 2— Report to Parliament—
'(1) The Treasury shall keep the operation of the dormant accounts arrangements under review.
(2) From time to time the Treasury shall prepare reports to each House of Parliament on the operation of the dormant accounts arrangements.
(3) Within three years of the commencement of this Act, the Treasury shall prepare its first report.
(4) Each report shall include—
(a) a review of the operation, effectiveness and scope of the dormant accounts arrangements; and
(b) any other matters that the Treasury considers to be relevant to the operation of dormant account arrangements.
(5) If the report shows that any of the matters covered by the report are unsatisfactory in any respect, the Treasury shall state—
(a) the improvements that are to be made to the arrangements;
(b) whether such improvements require legislation or could operate on a voluntary basis;
(c) the timescales involved in achieving those improvements; and
(d) the actions that the Treasury propose to take.
(6) In preparing each report, the Treasury shall consult—
(a) those persons who it considers to have relevant knowledge of the operation of the dormant account arrangements; and
(b) such persons as it considers appropriate.
(7) Each report shall be published in such manner as the Treasury shall determine, and shall be laid before each House of Parliament.
(8) The Treasury may make an order removing the obligation to prepare reports in subsection (2) above.
(9) An order made under subsection (8) above may not be made unless a draft of the statutory instrument containing it has been laid before, and approved by a resolution of, each House of Parliament.'.
When we discussed the matter before us in Committee, a strong view was expressed that the Government ought to return to it at an appropriate time, having reviewed the progress of the Bill and the operation of the reclaim fund. That feeling arose largely after the Government overturned amendments made to the Bill in the other place that introduced triennial reviews in perpetuity. The Committee felt that such a review regime was excessive. However, the general feeling was that there should be a review and that a relevant clause should be inserted into the Bill. At the time, I expressed my view that the Government would naturally want to have a review, but I did not think it appropriate to put it in the Bill. However, having listened carefully to the Committee debate, I undertook to reconsider the matter and to introduce a new clause committing us to a review.
Government new clause 3 will commit us to a comprehensive review set out in legislation and accountable to Parliament, so I hope that it will be recognised that we have listened. We had a very constructive debate in Committee. The new clause is clear and detailed, and commits us to a review of the scheme within three years after it is up and running. The review will cover the effectiveness of the scheme, including industry arrangements for reuniting customers with accounts before they become dormant, industry participation in the scheme and the arrangements for repaying customers whose assets have been transferred to the scheme. The review will be based on consultation with all the relevant parties, and we undertake to present our findings and conclusions in a report to be laid before Parliament.
I am very relieved to hear my hon. Friend say that the review will take place within three years of the scheme being up and running. New clause 3(5) states that the review will take place
"within three years from the date when a reclaim fund is first authorised".
Does that mean from when the fund starts work, or from when the Bill is passed? What is meant by up and running?
We mean when the reclaim scheme itself is up and running. I think that it is right that there will be a period of time between the passing of the Bill and the setting up of the reclaim fund. It seemed to us—we explored this in Committee—that three years was about the right length of time. In actual fact, it will be slightly less than that, because we would have to report in that period.
Let me turn to the scope of the review. As I have said, it will consider the effectiveness of the legislation. That was a point that my hon. Friend Tom Levitt and other Labour Members raised. It will not attempt to review areas outside the legislation, such as the Financial Services Authority's prudential regulation of the reclaims fund's, management of money. It is right that FSA regulation is a matter for the FSA. We expect the regulator to make its own assessment of the effectiveness of its regime, too.
New clause 2 does the same thing, in essence, as new clause 3. We naturally prefer our clause and think that new clause 2 is unnecessary as a result. The Government have listened and we have acted as a result of the representations that were made in Committee, and that is why we commend the new clause to the House.
Before I sit down, I shall give way to the hon. Gentleman. He was not on the Committee, but I am sure that he takes an active interest in these matters.
I thank the Minister both for giving way and for indulging me, as someone who was not on the Committee but who takes an interest in these matters. I welcome the indications that the Government have opened their mind to the idea of a review. The Minister will be well aware of concerns inside the third sector about the response of banks to this opportunity as a result of economic circumstances. He said that new clause 2 was very similar to new clause 3, but does he not see differences in the scope for more regular reports and in the pressure that the Opposition new clause would place on the Treasury to do more than just report what is happening and to come to the House to suggest improvements?
There are some differences between new clause 3 and new clause 2. I thought it right to let Mr. Hoban explain why he prefers his clause when he has his go. The Government will want to publish the findings of any review that we undertake and we will want to take forward any recommendations that come from it. Although some of the detailed wording is not in new clause 3, its spirit and intention would be the same, I think, as that of new clause 2, which I shall let the hon. Member for Fareham introduce.
My hon. Friend said that the review would be comprehensive, and he has also said that its recommendations could be acted on. In the knowledge that we will be left with a voluntary scheme, because the Government have committed to such a scheme, will comments about whether the voluntary scheme is working be allowed in extremis as a conclusion of the review? If the review recommended that we should move from a voluntary to a compulsory scheme, would that be one of the recommendations that would then be implemented?
I understand where my hon. Friend is coming from. As I said in my opening remarks, the review will cover industry participation in the scheme. If, for some reason, there was little industry participation in the scheme, I would expect the review to conclude that the voluntary scheme was not working. However, as I explained in Committee, I have no reason to believe that there will not be extensive voluntary participation in the scheme. The British Bankers Association and the Building Societies Association have both confirmed that their members wish to participate in the scheme. My hon. Friend will find that more than 90 per cent. of retail deposits are potentially committed to participation already. Obviously, we would hope that more banks and building societies with retail deposits would make such a commitment as the Bill is passed and as the reclaim funds are set up. I do not think that the problem that he mentioned will materialise. It would certainly be within the scope of the review to consider industry participation in the scheme.
I am grateful to the Minister for tabling new clause 3, which reflects the commitment that he gave in Committee to return to the issue. A feature of the debates in the House and the other place has been that a review process is needed. In Committee, the Government sought to remove the new clause that was inserted into the Bill on Report in the other place. As a consequence of that decision in Committee, we are considering Government new clause 3 and new clause 2, which I tabled.
It is worth bearing in mind that one reason why we feel that a review is needed is that the scheme is unusual in that the banks and building societies will join it voluntarily, but a statutory legal framework is required to enable balances to be transferred from the banks to the reclaim fund. Clearly, once expenses have been set aside, the amounts transferred to the reclaim fund will be transferred in England to the Big Lottery Fund to be used for the purposes set out in the Bill, and we will discuss those purposes later.
Given the hybrid nature of the scheme, it is important that a review mechanism is in place. One of the things that characterised the debate in the other place was the need to remove uncertainty about how the scheme will operate day to day, and there is still some uncertainty about how the reclaim fund will function. On that basis, the Lords determined that there should be a triennial review—that was provided for in the new clause introduced in the other place—but I accept the concerns that the Chief Secretary to the Treasury expressed on Second Reading that to commit the Government to a triennial review in perpetuity was perhaps not the right way to go.
Having reflected on that and the deletions that the Government made in Committee, I came up with new clause 2, which would provide the option to hold more than one review. One of the big differences between the Government's new clause and ours is the option to hold further reviews. The requirement for a review could be terminated if both Houses approved a draft statutory instrument. Once the scheme is up and running and we have been through one review, it might well take another review before we are certain that the scheme is operating properly. That is why the Government are wrong in new clause 3 to create the scope for just one review, whereas we want reviews to be carried out more frequently but not necessarily until the end of time, as under the original new clause.
Our new clause also differs from the Government's new clause in its provisions for the scope of the review. We would have a broader set of arrangements under new clause 2. Tom Levitt talked about the voluntary nature of the scheme. Of course, new clause 3 does not explicitly address that issue, whereas new clause 2 does. We will talk about the voluntary nature of the scheme when we consider new clause 1, which was tabled by Mr. Browne, but the scope of my new clause would enable the essential issue of the scheme's voluntary nature to be considered properly.
People expect the scheme to work, but there are concerns, which we will come to in more detail in considering new clause 1, that the scheme might not work on a voluntary basis, and we want to ensure that that is explicitly addressed in any review. The review provides a mechanism to enable us to signal to the voluntary sector, which is most concerned about the voluntary nature of the scheme, that we take on board its concerns and want to make sure that they are addressed in any subsequent reviews.
Subsection (4)(b) of new clause 2 would give the Treasury flexibility on what issues it considers. Matters other than
"the operation, effectiveness and scope of the dormant accounts arrangements" could then be considered. For example, one might want to look into the expenses incurred by the reclaim fund, or the range of assets covered by the Bill, which simply covers bank accounts. Subsection (4)(b) could enable the Treasury to broaden the scope of the assets covered, and to consider national savings and investments and other unclaimed assets—perhaps shares, life assurance policies and pensions policies. That was discussed at some length in the other place, but not in Committee. It is an area of activity that we want to keep under review.
One of the reasons why we need a review is to ensure that there is a spotlight on the operation of the scheme. We are talking about the way in which banks unite dormant accounts with their customers, the processes that they use to do so, and the thoroughness with which they try to identify the customers concerned, to make sure that they do not lose out as a consequence of the scheme. In Committee, we discussed concerns about how well that would work in practice. A review will require the banks and building societies to continue to work hard on that. It will ensure that there is a mechanism for identifying flaws in the system, and will make sure that we have feedback from consumers on how well the scheme works. It will enable us to understand what the administrative burdens on the banks are, and how easy it is for charities to be able to identify dormant accounts to which they might be entitled.
One of the concerns of charities, which are often the residuary legatees of an estate, is how they could find out whether they had got all the money to which they were entitled. There is a dispute between the charities and the banking sector about how that would work in practice. Again, a review would enable the issue to be considered, so that we could see how things work in practice. I know from talking to both the Unclaimed Assets Charity Coalition and the British Bankers Association that they have a commitment to working closely together on that, but the fact that there is a review means that they have to work very closely together and reach a pragmatic solution to the problems without, I hope, our having to resort to a compulsory scheme.
The strength of new clause 2 is that it would enable us to hold more than one review. That reflects the fact that we may not get the scheme right straight away. We may need to consider how the scheme operates in its first three years, and we may then say that we need to come back for a second review. However, that second review might be the last review that is needed, if people are happy that the review has been properly carried out. That capacity to hold a review beyond the initial period is one of the key distinctions between new clauses 2 and 3. New clause 3 does not go far enough. It does not provide the comfort that I am looking for on the issue of the scheme being kept under regular and frequent review.
I am being optimistic, of course, but I would much rather that the Government withdrew new clause 3. New clause 2 provides a far more effective sanction and check, and offers far more effective scrutiny of the operation of the reclaim fund, than new clause 3 does. I hope that I have persuaded hon. Members that that is the case and that they will join us in the Division Lobby. However, the Government have moved some distance on this. When the matter was first raised in the other place, the Government were reluctant to accept a triennial review.
Surely common sense would dictate that if further reviews were necessary in the light of new information, the Government would carry them out, so there is no need for new clause 2.
I would rather have the comfort of knowing that the Government were obliged to have another review, rather than leave it to the whim of Treasury Ministers. That is a much more secure basis on which to have the review than to allow one review and for the matter then to be put back on the shelf and forgotten about. The requirement to have ongoing reviews, with the Government able to determine when those reviews should stop through the statutory instrument process in my new clause, would be a far better safeguard for consumers and voluntary groups and would show that the scheme was working effectively.
Surely common sense would dictate that if further reviews are needed they will be held. How many reviews does the hon. Gentleman think we should have?
The answer is that I do not know. We may have to have a review every three years until the end of time, although I suspect that that is not the answer. Equally, I am not certain that just once is the answer either. That is why new clause 2 seeks to place on the statute book the requirement for there to be further reviews until a statutory instrument removes that obligation. My new clause would give people greater certainty about the scrutiny of the process than the Government's new clause. We are talking about money that belongs to consumers, to our constituents. I want to ensure that the reclaim process works properly and effectively, and when we are talking about potentially £400 million or £500 million, I am not sure that one review is sufficient. If the scheme is deemed to be working well at the end of one review, the Government could bring forward a statutory instrument to remove the obligation to have any future reviews. My suspicion is that one review will not be enough, and there will be a need for a second review. Therefore, rather than let it be at the discretion of the Treasury, it is important that Parliament should determine that there should be the capacity to have regular reviews of this issue.
That is the main area where there is a difference between new clauses 2 and 3. I do not think that new clause 3 provides the comfort and assurance that the voluntary sector and consumers are looking for, and that is why it is deficient. New clause 2 offers much greater protection to the voluntary sector and consumers that the scheme will work in both their interests.
I did not have the pleasure of serving on the Committee, but judging from the speeches of my hon. Friend the Minister and Mr. Hoban, it sounded like a particularly civilised Committee stage. I do not know whether I am right or wrong. The hon. Gentleman feels that new clause 2 is slightly better than the Government's, but I am not sure whether he will seek to divide the House. There is consensus on the need to review how the legislation operates, and I welcome the common-sense approach taken by my hon. Friend in tabling the new clause. He seems to have accepted the views put forward in Committee by both the Conservative party and the Liberal Democrats—whom we have yet to hear from, so I hope I am not misquoting them in advance.
My only concern is the need for a degree of independence in the process, given the current climate. I understand why this has to be led by the Treasury—this is an idea that comes from the Treasury and Treasury Ministers—but it is important that the Government allow some degree of independence in the review process. We have not had this process before, but I envisage people being able to make written representations to the Treasury within a time scale enabling the review to take place. I am not sure whether that is what the Minister has in mind, or whether he proposes to elucidate further on how the process works, but it is important that we get as much detail as possible on the record, so that once the review process begins, people feel that it is open and transparent and they can put forward their views about how they can best express their concerns over what is happening.
As the hon. Member for Fareham said, we are dealing with other people's money, so we need to be very careful about how the state claims and uses it, even though it may be for appropriate reasons and for good works. It is going through the lottery agencies and so on, so it must be for good things; it cannot be for bad things. Despite that fact, people need to have the confidence of knowing that there is a proper and transparent approach, but that degree of independence is missing from new clause 3. I do not know whether this was the case but, as the new clause was probably drafted over the weekend, as such things are when Report approaches, perhaps there was no chance to think about the issue more carefully. However, when the Minister replies, perhaps he will give us that degree of assurance—that that independent element will appear somewhere in the process.
I recognise that other Members have followed the Bill through its various stages and are therefore experts on these matters, bit I should like to ask the Minister whether the proposal will also cover dormant accounts from banks that are in liquidation. He will know that the Bank of Credit and Commerce International has been in liquidation for 17 years. It is an ongoing process, and there is clearly enough money to cover all the money that is left in that bank. Might we apply the legislation to the people whose bank accounts were, in effect, frozen on
It feels as though we are dancing on the head of a pin when there are rather more pressing matters facing the banking sector. Nevertheless, that is perhaps inevitable at this stage of the legislative process. I welcome the fact that at all times, in the other place and in Committee in this House, the Bill has broadly commanded cross-party support. That is reflected in the Government's new clause 3, which I welcome. I am grateful to the Government for listening to the representations that were made in Committee and for seeking, to some extent, to accommodate the concerns that Members from all parties expressed.
With this legislation, there is, after all, a sense that we are entering slightly different territory, and, even though the headline concept is fairly straightforward, we are not certain about how some aspects of it will pan out in practice: whether 15 years, for example, will be an appropriate period for a bank account to be deemed to be dormant; the nature of the reclaim for people who want access to their funds after that 15-year period has elapsed; the mechanisms for distributing the money and the causes that it goes to; and many other features of the legislation besides. So my colleagues and I have always taken the view that some sort of review mechanism would be healthy and in the interests of the Government. The amendments, both in the other place and in this House, were not about Opposition point-scoring to try to put that process into the legislation; they were well-intentioned, and I am pleased that the Minister and his colleagues have sought to accommodate them and seen the wisdom in trying to take that approach.
My party's view in both Houses has always been that the review should be regular, although in Committee I was, like Mr. Hoban, happy to concede that having a review every three years for—as he put it—"the rest of time" might be somewhat excessive. No doubt, over a period the legislation would settle down and people would feel confident with how it worked in practice.
Our concern now—as I said, we are dancing on the head of a pin somewhat—is whether one review is sufficient or whether subsequent reviews may be required. If they are, should that be expressed in the Bill or should the Government freely come to a conclusion about the issue after they have conducted one review? The margins of difference between us are pretty small, but in so far as the issue matters, I would prefer the legislation to express a mechanism for further reviews.
Having said that, I should say that new clause 2 is rather loosely worded. I can see why Opposition parties would wish to support the new clause because of the broad principle of having more than one review. The Government, however, may be anxious, with their majority, about putting into legislation provision for carrying out reviews "From time to time", as new clause 2 states. That seems extremely loose; it could mean anything—every 50 years, I suppose. On that basis, the Government could easily either bring forward reviews or completely ignore new clause 2, even if it were passed by the House today, on the basis that having a review a century from now would not be sufficiently frequent or urgent.
In Committee, I made a concession when I had tabled a similar amendment that would have required the Government to consult "those affected" by the legislation. I was criticised by other Committee members, and I conceded that their criticism had some legitimacy and that my wording was too loose for a consultative process. However, new clause 2 would require the Government to consult
"those persons who it considers to have relevant knowledge".
That strikes me as entirely open to interpretation by those undertaking the review. I take the point made by Keith Vaz, who said that if the Government are reviewing their own legislation and are required to consult only those it regards as having "relevant" knowledge, they will pretty much have a free hand to consult whomever they see fit to consult—they may choose to consult only those who are likely to give the answer that they wish to hear.
Does the hon. Gentleman agree that the scope of new clause 3 is rather tighter than that of new clause 2 in respect of the topics that must be included in the review? I shall not read out new clause 3(2), but it seems more onerous on the Treasury in respect of the review than the provisions under new clause 2. New clause 3 seems more desirable in that respect.
I agree. New clause 3 is better worded; it might have been drawn up over a weekend, but new clause 2 must have been rushed through the drafting process much more speedily than that this morning. New clause 3 is more tightly defined, but new clause 2 has provision for subsequent reviews, whereas new clause 3 does not. Those who would prefer more than one review, or at least the option of that, may be tempted to support new clause 2. As I am of the view that the option of more than one review may be desirable, I am more sympathetic to the objectives of new clause 2, although I see that the drafting of new clause 3 has greater merit.
I am grateful to the hon. Gentleman for his generosity in giving way. As he pointed out, this is a case of angels dancing on the head of a pin, given that both new clauses rely on the discretion of the Treasury. New clause 2 says that reports should be prepared "From time to time"; as the hon. Gentleman pointed out, that is an incredibly elastic phrase. Under new clause 3, there is nothing to prevent there being more than one report, although there is no provision that there should be more than one. New clause 2 adverts slightly to there being more than one report, but "From time to time" is so elastic that both clauses would leave the issue to the discretion of the Treasury.
The advantage of new clause 2 is that even if the Treasury agreed to have only one review, at least there would be a mechanism for ensuring that we could have a debate, whereas under new clause 3 if the Treasury decides on a whim not to have more than one review, there is no formal mechanism for this House to challenge the Government on that decision.
This conversation is getting more and more arcane. I conceded in my opening remarks that although on the face of it the Bill is quite straightforward, it has a few unusual features. We are navigating waters that have not previously been explored in this country, although similar schemes exist in other countries. There is therefore merit in having a review. Having said that, I think there is merit in periodically reviewing every piece of legislation that the Government introduce to see whether it has had the intended effect.
In new clause 3, the Government make the useful concession of allowing a formal review. I do not want to be mean-spirited, because they have moved on this: they have listened to the concerns that have been expressed and, in a healthily non-partisan manner, sought within the bounds of what they regard as practicable to bring forward proposals that can command broad support. The Opposition parties may wish the Government to commit to further reviews, which would be desirable, but I can see why they would be reluctant to support the rather loosely drafted new clause 2.
I do not anticipate the Conservatives pressing new clause 2 to a Division. On the basis that it contains the broad principle of having more than a single review, I would be willing to support the Conservatives, but I suspect that the Government would use their majority to vote down that proposal on the basis that they share my concerns about its loose wording.
It is a pleasure to follow Mr. Browne, from whom I learned—I had not realised this before—that the Liberal Democrat party is in a position to make concessions. However, I will put that aside for the moment.
As chair of the all-party group on the community and voluntary sector, and one to whom the sector has been talking loudly on this issue, I very much appreciate the spirit in which my hon. Friend the Minister has tabled this amendment, as he promised that he would following our debate in Committee. He has been as good as his word. I will, if necessary, follow him into the Lobby to support new clause 3.
My hon. Friend Mr. Jones and I were part of the awkward squad on the Back Benches in Committee— [ Interruption. ] I hear gasps of astonishment from my colleagues. As such, let me make one or two other statements about the new clause. I hope that my hon. Friend the Minister is right about the intention to pursue a voluntary scheme. I am much consoled and helped by his saying in response to my intervention that legislation to address a failing scheme could well be considered at a later date. I hope that that is not necessary. Although he did not say so, I suspect that he is of the opinion that inserting too many get-out clauses may undermine the voluntary scheme, and we certainly do not want to do that. We will have a voluntary scheme as a result of the legislation, and we all want it to work in the interests of the beneficiaries, and of the good standing of the banks.
It is important to have a review. My hon. Friend the Minister was right to vote against the amendment passed in another place when it came to Committee, and I believe that new clause 3 is an important clarification of the position. It is a review process far superior to the one in the Bill when it first came to Committee. It does not rule out a subsequent review; it cannot do so. All Ministers must, at any time, be able to revisit previous legislation to check that it is working. Those of us who wanted an assurance about voluntary, as opposed to compulsory, status may be superficially attracted to new clause 2(5)(b), which suggests legislation might be introduced. In fact, that provision is meaningless. If legislation is necessary to put right something that is wrong with the scheme following the review, new clause 2 would not provide a quicker or more efficient way of achieving it; it simply says that it might be necessary. The Minister has conceded that it might, at some point, be necessary. New clause 2 is superficial and has been tabled for the sake of it, to allow a debate to take place.
Taking all those points into account, and in the spirit of what my right hon. Friend Keith Vaz described as the civilised way we dealt with matters in Committee, and in the spirit of the brevity of those proceedings, I support new clause 3.
I too served on the Committee, and it was an extremely enjoyable experience. The sittings were very good natured, and if all Committees were like that, this place would be far happier and more productive.
I am pleased with the direction of travel of the Bill. We are talking about large sums of money being taken from dormant bank accounts and being given to good causes, so it is important that once we establish the body overseeing that transfer of money, it is not out of sight and out of mind. We need to get it set up, and then be able to feel that we have done our job effectively and so move on. I am extremely pleased that in three years' time we will revisit its performance when we can talk to the various parties involved in its operation to divvy up the cash. The banks and building societies will have their view, and some who have voluntarily signed up will have suggestions on how arrangements can be made even better. It will also give us the opportunity to talk to those who had not signed up to ask how we could persuade them to do so, without cajoling them with the threat of binding legislation. We can also talk to those who have been reunited with their money about their experience. There will be a good opportunity to sit down in three years' time to establish whether the mechanism we are putting in place today is working and delivering efficiently and effectively.
I hope that new clause 2 will get a further hearing because, if we decide not to have further three-yearly reviews of the performance of the body in Parliament, it is important that there is a debate in Parliament when it can come to a settled view that it is happy with the direction of travel after three years and that it needs to have no further involvement. I prefer our new clause 2 to Government new clause 3 and, while there is no place for partisanship in this debate, I suggest humbly to my hon. Friend Mr. Hoban that if he does not like new clause 3, in three years' time, he might be in a position—as a Minister—to change it and ensure that we have such debates regularly.
I shall cover three points: Treasury discretion, factors covered by any review, and those consulted. Although this is not a fantastically well-attended debate, and I was not on the Committee that examined the Bill, it is an extremely important matter because we are, as several hon. Members have said, talking about taking people's money. Parliament must be extremely careful when passing any such legislation.
I have given my opinion of Treasury discretion in interventions on Mr. Browne, who kindly accepted them. I do not believe that new clause 2(2), which begins, "From time to time" makes any difference—it is simply a statement of principle.
I am sorry to interrupt my hon. Friend's flow, but, as he did not serve on the Committee, perhaps he may be under a misapprehension. People's money will not be taken—the money will always be there. People who lose contact with their funds will always have access to them—that is one of my reasons for pressing for the measure for the past 10 years. People can get their money. We are talking about using the money that cannot be given back to people for good causes rather than for profits for the banks.
I stand corrected on the nuances—the measure would not take people's money for ever more. However, it provides for taking people's money, and they would have to go through a procedure to get it back if they resurfaced after, for example, 20 years.
On Treasury discretion, new clauses 3 and 2 are effectively no different. I prefer new clause 3 because of the factors that it covers. On the review, new clause 3(2) contrasts with new clause 2(4). The subject matter that would be reviewed under Government new clause 3 is rather greater and more intensive than that envisaged under the Opposition's new clause 2.
Similarly, when one contrasts new clause 3(3) with new clause 2(6), the consultation process envisaged in new clause 3 is rather better than that in new clause 2.
For those reasons, if new clause 3 is pushed to a Division, I will support the Government.
We have had an interesting debate, which shows that there is not a great deal of difference about substance between all hon. Members who contributed. We all believe that a review is necessary, and most of the debate has centred around whether more than one review should take place and whether provision for that should be made in the Bill.
The Government's position is that a comprehensive review in three years is sufficient to establish whether the scheme is operating effectively and that further requirements for reviews constitute a heavy-handed approach. I understand the view of Mr. Hoban, who speaks for the Opposition, that new clause 2 specifies further reviews "From time to time"; the wording is fairly loose, as we have discussed. I also appreciate that new clause 2 includes a power to remove subsequent reviews through the affirmative resolution procedure. However, we do not believe that we need that amount of stricture. If the review demanded further consideration by Government, it could—and would—be conducted in the way that my hon. Friends the Members for Coventry, South (Mr. Cunningham) and for High Peak (Tom Levitt) clearly outlined. If a review revealed that we needed to review the scheme still further because sufficient concerns remained, we would do that. Not putting something in statute does not mean that it will not happen.
May I draw the Economic Secretary's attention to a parallel? The Financial Services and Markets Act 2000 included a power to conduct a formal review of the FSA and the Financial Ombudsman Service in two years of their being established. That measure does not rule out further reviews, but only one review of FOS and the FSA has taken place. It is all very well Ministers saying, "Oh yes, we could have another review", but, without a legislative requirement, the necessity for keeping the scheme under consideration will soon slip out of the Treasury's mind. That is why new clause 2 requires further reviews, but also includes the power to remove the requirement, if appropriate. New clause 2 would force the Government to keep the matter on their agenda, whereas new clause 3 would allow it to drop off quickly, after the first review.
Let me assure the House that we would commit to keeping the issue very much on the Government's agenda, but that would also depend on what the first review concluded. If the first review concluded that the scheme was working well—that there was extensive voluntary participation, that the reclaim fund was operating efficiently and that money was going to the Big Lottery Fund and being spent in exactly the right way—it might also conclude that no further action was necessary other than to keep a watching brief. To commit ourselves to hold a review "from time to time" would not be a good legislative route to pursue.
I should like to pick up some of the points that hon. Members have made. My hon. Friend Rob Marris made the point in his speech and in response to an intervention by my hon. Friend Mr. Jones that we are talking about customers' money. A great deal of time and effort has already been spent on reuniting customers with their money. My hon. Friend the Member for Wolverhampton, South-West talked about the procedures that people will need to go through to reclaim their dormant account money, so I ought to explain that doing so should be very simple. It should require no more than taking two forms of identification to one's bank or building society and saying, "I'd forgotten that I had this money in my account. This is me—please give me the money." All the wiring that will support subsequent claims on the reclaim fund to reimburse the bank or building society will not be seen by the customer, who will just have to undergo a simple transactional exercise, just as people go their bank or building society and withdraw money that is rightfully theirs.
My right hon. Friend Keith Vaz made two important points. First, he asked whether there would be an independent element in the review and noted that the clause as drafted requires that the Treasury carry it out. As we have made clear, the review will be undertaken in consultation with industry, consumer groups and the voluntary sector. We see the process as a consensual one. We do not specify in the Bill whether a Treasury official would carry out the review or whether we want to commission independent consultants to do it, but that is a decision that we would want to make at a later stage.
I am most grateful to the Minister, but I hope that he will not have consultants conducting the review. He has put a jolly good new clause before the House and presented a brilliant Bill. Let us not spoil it by bringing in the consultants. If he wants to bring someone in, he should choose some great, towering figure from business or wherever—I do not know what Lord Digby Jones is doing these days—who will have a proper, independent look. Please, please do not go to consultants.
I take my right hon. Friend's point. My point is that there will be extensive involvement and consultation as part of the review process. Whether the review team will be made up purely of Treasury officials or whether we want an independent person in charge, whoever they might be, is something that we can consider later, when drawing up the review.
My right hon. Friend also discussed the liquidation of BCCI. I stand to be corrected, but my understanding is that accounts from the former BCCI are not likely to be transferred into the reclaim fund or meet the requirement of dormancy, as defined in the Bill as drafted. Should that not be the case, however, I will endeavour to come back to him. However, the principle is that the scheme is voluntary and the reclaim fund is a private sector organisation. There is discretion on the part of the participating banks and building societies to interpret whether such accounts are dormant. That is one of the flexibilities in the system, which we believe to be one of its strengths.
Keith Vaz raised an important issue. Is the Minister saying, in effect, that the liquidator would be able to choose whether the remaining assets, in this case in BCCI, would be available for transfer to the reclaim fund? The liquidator's duty to maximise the amount available for creditors would seem to suggest that doing so would be wrong and that any moneys remaining in dormant accounts should stay within BCCI and form part of a dividend to be distributed to creditors.
My understanding is that the latter would obtain. There is also the issue of what would happen if money was transferred into the scheme and a bank subsequently became insolvent. In those circumstances, I think that the customer would still be able to reclaim their money, and that would be the right thing to do.
The Minister said that the customer would be able to reclaim the money. Would they reclaim it from the liquidator, or would it go back to the insolvent bank first? I think that that was the point that Mr. Hoban was making.
If the money has already been transferred to the reclaim fund, even in an insolvency situation, and if a customer is—
Let me try to explain it first. If it is still unclear to my right hon. Friend, I will endeavour to write to him. The key principle is that dormant accounts are transferred to a reclaim fund, then transferred on to the Big Lottery for distribution to worthy causes. If, at any time, a customer with a dormant account should realise that their account is dormant and want to get their money, they can go back to the bank or building society. That procedure would pertain in a normal situation, but I would suggest that it would also pertain in an insolvency. The customer would have the same rights as any other retail depositor in an insolvency. If I need to make any further clarification on that, I will ask leave of the House to do so.
In conclusion, I do not think that there is a great deal of difference between new clauses 2 and 3. The principal difference is the question whether there should be a review from time to time, or whether there should be just one review, followed by the Government making a commitment that, if we felt further reviews were necessary, we would endeavour to ensure that they took place. I hope that the hon. Member for Fareham will not feel that he needs to press new clause 2 to a vote, but if he does, I will invite my hon. Friends and other hon. Members to oppose it, and to support the Government's new clause 3.