Clause 30 — Commencement

Orders of the Day – in the House of Commons at 7:45 pm on 3rd November 2008.

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats 7:45 pm, 3rd November 2008

I beg to move amendment No. 9, page 14, line 36, leave out subsections (1) and (2) and insert—

'(1) Part 1 shall come into force on 5 January 2009.

(2) Part 2 shall come into force on 6 April 2009.'.

If the amendment is agreed to, part 1 of the Bill will come into force next year on the first working day after the new year bank holidays and weekend in all parts of the United Kingdom, and part 2 will come into force at the beginning of the next financial year. The amendment is absolutely a probing one, and I anticipate that the Minister will say that there are technical reasons why the Bill cannot come into force as quickly as I suggest. My amendment is really designed to do two things. First, it says that we should get on with things once Royal Assent is over. Secondly, it seeks to encourage the Minister to give us a helpful answer on how soon we can get on with things.

The Minister may be obliged to resist the two dates that I have suggested, but it would be useful if he could say when—if there were a fair wind and everybody was helpful—the earliest dates for the Bill's implementation could be. If he did that, it would encourage people in the industry to get on with things, make people understand that the Government are serious in their intent and allow beneficiaries to see that the opportunity is not one of "jam tomorrow", but "jam really quite soon". It would also be in everybody's political interest, because some time between now and June 2010 there has to be a general election. The Government have a motive for getting on with the legislation; that would be in their interest and in the general public interest.

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Photo of Ian Pearson Ian Pearson Parliamentary Under-Secretary, Department for Business, Enterprise & Regulatory Reform, Economic Secretary, HM Treasury

Yes, I do want to get on with things as quickly as possible, and I share the hon. Gentleman's enthusiasm, and that of all hon. Members, for a scheme to be up and running as soon as possible. I assure him that the Act will be brought into force as speedily as possible and in good time. I am not, however, persuaded of the need to specify an early date, as the amendment does.

After Royal Assent, a number of important elements must be considered before any scheme can launch and any money can be transferred from financial institutions to the reclaim fund and subsequently to the BLF. Most notably, the Financial Services Authority will need to consult on the rules around its regulatory regime for the reclaim fund. The FSA has committed to consult shortly after the Bill gains Royal Assent and I certainly encourage it to do that as speedily as possible. The consultation process on that important detail will, however, rightly take time, as hon. Members have said.

The dormant accounts contain people's money, and they have a right to it. We need to be sure that a candidate reclaim fund will need to apply to the FSA and gain authorisation. Presumably, a bidding process for setting up the reclaim fund will have to take place. Once an authorised reclaim fund exists, however, the scheme can be operational quickly. Our ambition is for the scheme to be operational by the middle of next year, but obviously there are a number of hurdles before we reach that stage. In that context, the call for an early commencement of the Bill is not relevant because that would not affect the early introduction of the scheme. However, I assure the House that the Government will want to move with all reasonable speed to ensure that the scheme is not unnecessarily delayed, that we get on with it and that we deliver the sort of benefits that the Bill can have for our citizens.

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats

Again, the Minister has been helpful; the phrase that I take from his response is "the middle of next year", which is an encouraging marker. Will he give one more indication, just so that people can be clear? If the implementation is to take place in the middle of next year, when does he expect the first payments to be made? Would they also happen in the middle of next year, or would they take another month or three months? I am trying to see whether I can get the Minister to say that some time next year he would expect the money to have come out of the accounts, gone through the reclaim fund and the BLF and come out at the other end. Is that expectation reasonable? Given what the Minister has said, it seems that it is.

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Photo of Ian Pearson Ian Pearson Parliamentary Under-Secretary, Department for Business, Enterprise & Regulatory Reform, Economic Secretary, HM Treasury

What I would wish to happen is that during the course of the financial year 2009-2010 we have not only a reclaim fund up and running, but banks and building societies transferring money into it. I would also like to think that the reclaim fund will be making decisions during that financial year to allocate initial sums to the Big Lottery Fund. That is quite an ambitious timetable, but it is not unrealistic that we can move at that pace, and that is exactly what we should do.

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats

I am grateful to the Minister for his reply. I shall come for my meeting with his colleagues with a good knock on the door and all the encouragement that I can muster. I hope that the Government will be able to move this matter forward as quickly as possible and look forward to a speedy delivery once the Bill receives Royal Assent. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Order for Third Reading read.

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Photo of Ian Pearson Ian Pearson Parliamentary Under-Secretary, Department for Business, Enterprise & Regulatory Reform, Economic Secretary, HM Treasury 7:50 pm, 3rd November 2008

I beg to move, That the Bill be now read the Third time.

We have had an interesting debate on Report. I am grateful to all hon. Members who took part and to those who served on the Public Bill Committee. I am grateful for the good spirit and the constructive approach taken by Members of all parties.

As a Government, we have listened to several of the arguments that have been made here and in the other place, and the Bill has been greatly improved as a result. I recognise that transparency and openness are important in these areas. Our debate on the review clause in Committee and the Government amendment that we passed this evening have helped to demonstrate that we have been listening.

It is a fact of life that people often forget about or lose track of small deposits of money in bank and building society accounts. That may be because they have changed address or lost contact with their bank, or perhaps they have died without anyone being aware of the account. As a consequence, a large amount of money is lying dormant in bank and building society accounts. It was a Labour party manifesto commitment that we would act to legislate in this field. The 2005 pre-Budget report set out that the Government had decided that the time had come for such a scheme in the United Kingdom, and the Bill is a key part of turning that ambition into reality.

The latest estimate from the British Bankers Association and the Building Societies Association is that by the Bill's definition between £250 million and £350 million in banks and £130 million in building societies is potentially available. Although those volumes of money are relatively small in the context of the financial services sector as a whole, such sums have the potential to make a significant impact for projects in the community. Throughout our debates, the Government have been deliberately clear that we see the spending priorities in England as youth services, financial capability and inclusion and, if resources permit, investment in the long-term sustainability of the third sector. Those important areas are included in the Bill. The potential of the scheme to make a real difference in every community on the basis of those priorities is clear.

We have argued, following extensive consultation, that an alternative disbursement option should exist for small institutions to distribute assets in their local communities. On several occasions, the case has been made that special treatment should additionally be afforded to all building societies. We have listened to those arguments and carefully considered them. However, as I said in Committee, we continue to believe that the significant impact that that would have on assets going into the national scheme, and the duplication of national level distribution, would mean that the potential benefits to society were reduced. Widening this small and local scheme to all building societies is therefore not desirable. Although we did not debate amendments on this today, amendments were debated in Committee and in another place. We remain firmly convinced as a Government that the scheme has been designed in the most appropriate way to be able to provide benefits in the priority areas that we have identified.

The Bill offers an historic opportunity to allow these assets to be used for the wider benefit of society, and it does so while maintaining an approach that is user-friendly and protects customers. Ultimately, if customers discover that they have lost their bank, building society or national savings account and want to get their money back, they will be allowed to do so, and there is nothing in the Bill to prevent it. However, using dormant accounts represents an opportunity to provide significant benefits to some of the most deprived communities by improving youth provision and helping with financial capability and inclusion. I commend the Bill to the House.

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Photo of Mark Hoban Mark Hoban Shadow Minister (Treasury) 7:55 pm, 3rd November 2008

The Minister rightly said that we dealt with the debates on Report as we did with the debates in Committee—by setting out from the outset to be constructive and to take the opportunity to understand and to challenge the Government's intentions. I think that the Bill is better as a consequence.

We are at the "end of the beginning" stage of this legislation. The Committee stage did not take long, but it took some time for the Bill, having received its First Reading in this House in February, to get to its Second Reading when we returned after the summer recess. Since then, we have dealt with it very quickly to get to this point.

There are four key aspects. First, we need to ensure proper protection for consumers so that they know that if money is transferred from their account to the reclaim fund, there is recourse for them. As a preparatory step, banks, building societies and National Savings & Investments have done as much work as possible to be able to unite customers with their money. The second important feature is the establishment of the reclaim fund and its functions. We have debated the reclaim fund and how we are going to monitor the way in which it works in practice. The third key area, which we discussed under the penultimate group of amendments, concerns the role that the Big Lottery Fund will undertake and how it will set out its strategy. The fourth key area is the next stage of the process, or the next challenge—determining how the money will be spent in practice on the ground. This presents a huge opportunity to find some innovative and exciting projects that can benefit from dormant accounts. We had a debate about the initial release of money from bank accounts to the Big Lottery Fund. It is vital that the Big Lottery Fund plans this process well. If it gets it right, that can make a significant difference to communities across the country. It will need to work hard to ensure that the opportunity is maximised and that the money is used effectively.

The Bill will leave this place slightly weaker than when it arrived. The Government have weakened some of the aspects of parliamentary scrutiny that were inserted in the other place. However, I will be gracious in accepting that new clause 3 provides some scrutiny. It may not be as robust and the review not as frequent as Opposition Members wanted, but it ensures that the functioning of the scheme will be reviewed. One of the features of the discussions throughout all the Bill's stages has been the importance of ensuring that the scheme works properly.

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Photo of David Taylor David Taylor Labour, North West Leicestershire

Does the hon. Gentleman recall my intervening on him on 6 October, when the Bill was previously debated in this Chamber? We both agreed that as a price for not being included in the Bill, National Savings & Investments should be doing more to link dormant accounts. NS&I has written to both of us, and I, for one, am more impressed by what it now does in relation to investment accounts, premium bonds and so on. Is he of the opinion that it should remain outside the Bill?

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Photo of Mark Hoban Mark Hoban Shadow Minister (Treasury)

The hon. Gentleman raises two points. I looked back at the Hansard report of the Second Reading debate; I thought that I had been complimentary about the work that the National Savings & Investments bank had done in reuniting customers with their accounts. It is important work, even though the dormant moneys will not be transferred into the reclaim fund—something which any review should consider. The bank should continue to work as hard as it can to ensure that people are united with their assets, and I am sure that it understands the importance that this House places on it continuing to do such good work in finding the owners of such accounts—

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Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. Time has allowed me to be indulgent, but I should remind the House that on Third Reading we should be discussing what is in the Bill, not what is not in it.

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Photo of Mark Hoban Mark Hoban Shadow Minister (Treasury)

I am grateful for that guidance, Mr. Deputy Speaker. You will understand from the exchange that I had with David Taylor why I may have chosen to trespass on your good will on this occasion.

Returning to the Bill, new clause 3 provides an opportunity to scrutinise how well the reunification arrangements work, which is important because we want the scheme to work. It is important to bear in mind that the money we are talking about—we have talked about the projects on which it might be spent and the opportunities that might be provided—comes from the accounts of bank customers. We need to make sure that in our enthusiasm and keenness to see that money flow through to good projects, we never forget that the process of getting it into the Big Lottery Fund should be done well.

The Bill is an important step forward in resolving the debate on the use of money in dormant bank and building society accounts, and it will provide a good opportunity to develop youth services, financial inclusion and the social investment wholesaler. It is important, bearing in mind the source of the money, that we ensure that it is spent wisely, efficiently and well. That task will be entrusted to the Big Lottery Fund. All those who have an interest in the Bill, whether they are consumers, banks, charities or the Big Lottery Fund, will be well aware from the conclusion of our proceedings that we want not only to ensure that the scheme works properly, but to continue to scrutinise how it works to ensure that we get the best value possible from those assets.

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Photo of Martyn Jones Martyn Jones Labour, Clwyd South 8:02 pm, 3rd November 2008

I congratulate the Minister on the passage of the Bill and on the addition on Report of a review process. The Bill will mean more money flowing back into the hands of the public and important charities. Many of us had hoped for a much tighter check on the UK banking system and a mandatory scheme. I expressed my cynicism about the banking system and bankers in general in Committee and at other stages of the Bill's consideration.

I remind the House that in 2004, I asked the banks how much they had in dormant bank accounts. Six of them replied, saying that they had £419 million, while 16 did not—or would not—reply. Given that they are now talking about £250 million, there is a bit of a discrepancy, and I would like to know what has happened to that money. I let the Minister off too lightly in Committee when I said it was perhaps the definition of 10 extra years. On a back-of-the-envelope calculation, I do not think that that is true, because the banks had £400 million four years ago, and they have been going for perhaps 50 to 100 years in this country. I think that there is more money, and I hope that it will show up. I wait with interest to see which banks comply with the demands of the voluntary scheme. That is why I am grateful for the review procedure, which should give us some indication of the performance of the voluntary scheme at an early stage.

I hope for a proportionate distribution of the moneys across the regions of the UK. The money could provide much-needed funding for community projects to help the many volunteers and organisations throughout Britain who work with young people every day. I look to the future of other dormant asset schemes, such as insurance funds, share certificates and gambling debts. I hope to work with the Treasury on legislation in those areas in the near future. The Bill is a good start, and I am proud to have had some small influence on its reaching the statute book.

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Photo of Jeremy Browne Jeremy Browne Shadow Minister (Treasury) 8:04 pm, 3rd November 2008

Most legislation takes several months to pass through all the stages in both Houses, and in the time that we have been talking about dormant accounts, the banking sector has changed beyond all recognition and we now have a rather large number of semi-dormant banks. Nevertheless, the legislation is important in its own right, and it is good that it was studied in such detail in both Houses.

I pay tribute to those in the other place for getting the ball rolling. This is exactly the type of Bill that lends itself well to beginning in the other place because of the range of expertise available there and the fact that it is traditionally less partisan in its outlook than this Chamber. None the less, the deliberations we had in this Chamber and in Committee have been useful, and I congratulate the Minister on his constructive outlook and on seeking to be more accommodating than some Ministers have been on other occasions with regard to the provisions and proposals advanced by Members of other political parties and by those on their own Back Benches.

I echo the sentiments of Mr. Hoban in that I would have preferred some of the amendments made to the Bill in the other place to have remained, rather than seeing them removed in Committee, but the Bill has nevertheless been scrutinised in some detail, and my party, along with all other parties welcomes it. It is well-designed legislation that will, I hope, achieve the objective we all share.

I echo the point made by other hon. Members that we should not forget that the money in question belongs to private individuals. They have chosen not to touch it, either wittingly or unwittingly, for a long period of time, but I do not want the state to regard it as its role to confiscate the money of private individuals. It was important that we made sure that there was detailed consideration of the provisions for reuniting people with their funds, and I am pleased that the Minister and others took those issues seriously. I hope that the review we have agreed on this evening ensures that, as it becomes a reality across the country, any problems in the legislation will be ironed out.

Finally, the Bill's objectives are entirely laudable, and all of us—looking around the Chamber, I see people from urban, inner-city constituencies and those who represent rural areas in far-flung parts of the country—see a need in our constituencies to ensure that young people are engaged by projects that stimulate them and that ensure that they can play a full role in society. I know that the Bill envisages money being spent in different areas, but there is a consensus that the main thrust of the legislation will enable more provision to be made for youth facilities. Anyone who plays an active role as a constituency MP will see the benefits of that.

I am keen that the money should be additional. I know that it is hard to define in legislation what constitutes additionality, but everyone would feel that the legislation had not achieved its objectives if the money merely displaced projects already funded by the Government. Our deliberations have been positive and constructive. I hope that the scheme that is put in place is effective and that, sooner rather than later, our constituents will see the benefits of our deliberations.

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Photo of Charles Walker Charles Walker Conservative, Broxbourne 8:08 pm, 3rd November 2008

I would like to say how much I enjoyed serving on the Committee that considered the Bill. I spoke on Second Reading, I was on the Committee, and I am making a brief debut on Third Reading.

The amounts of individuals' money we are talking about are probably quite small, because people tend not to forget large amounts of money lying in bank accounts. I know that I have a couple of bank accounts—with the Chelsea building society and Barclays bank—from 20 years ago, with probably about £10 in each, and I am more than happy for that money to be put towards good causes. Although the amounts we are talking about are small in each individual dormant account—not in all, but in most—when we add them up, as the Minister did when he educated the House, we find that about £500 million is available to put towards good causes. Of course, the money does not belong to banks—they are its custodians. It belongs to people who have perhaps died or forgotten that it is there. If they or their executors do not intend reclaiming it, I see no harm in putting it towards good causes. It is a good and noble thing to give that money to good causes—alleviating poverty and helping young people get a foothold in life and a chance to make something of themselves.

I am pleased that there will be a review in three years of the reclaim funds' performance and the limited company in charge of distributing the money. That review may provide an opportunity to examine the performance of the Big Lottery Fund and perhaps to tweak things around the margins. I know that I have tried the Economic Secretary's patience—I will not try yours, Madam Deputy Speaker—but if it is decided in three years that charity should get perhaps 5 per cent. of that money, it would be no bad thing.

In responding to a point that Simon Hughes made, the Economic Secretary referred to an ambitious timetable of implementation. We have waited so long for the Bill that he can afford to be a little cautious. Let us ensure that we get it right: if it is not ready to launch by the middle of next year, I do not believe that anyone would be too critical if we delayed it by two or three months. It is important to get it right the first time so that it carries the public's confidence. If the Economic Secretary misses a June, July or August launch, he will receive no criticism from me.

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats 8:11 pm, 3rd November 2008

The Bill is clearly a good measure, supported by all parties and improved during its passage through Parliament. I shall make one short, broad point and reinforce a specific point that I made earlier.

While not taking assets from people against their will and always respecting the rights of private ownership that are upheld in documents such as the European convention on human rights, we are right to ascertain, as public policy, whether private assets can be used for the public benefit rather than not used at all.

We have done similar things over the years. Mercifully, since the last war, we have released people who are mentally ill from asylums where they had been locked away for decades. They had something to give, and society has realised that people with mental illness can make a huge contribution. We have also realised that in the case of people with disabilities, who were often hidden away—

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Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. I understand the hon. Gentleman's general point, but he must now confine his remarks to the Bill instead of drawing analogies.

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats

I was trying to steer close to the sort of thing that you would accept on Third Reading, Madam Deputy Speaker, but I shall steer closer to the Bill's central point.

It is amazing to relate, but if one is very rich, one probably has assets that are hidden away, which one does not think about. The Bill rightly provides that, though the moneys are private, if they have been forgotten and unused, there should be a facility to use them, even though they can be reclaimed. I want the fact that the Government have followed that route in relation to money in accounts to encourage them to be equally purposeful about other assets that are held privately—for example, land on brownfield sites or empty housing. I shall not go further, Madam Deputy Speaker. I simply remind the Government that they can be positive in a similar way about other matters.

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats

Absolutely not.

My specific point, which is central to the Bill, is to do with the fact that we are having a bad year in Britain for violent youth crime. London has been especially afflicted, with more than 20 teenagers killed.

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Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. I understand the seriousness of the hon. Gentleman's point, but I ask him to confine his remarks to the content of the Bill so that we can deal with Third Reading.

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats

My point is absolutely about the Bill's content, if you will bear with me, Madam Deputy Speaker. The Bill's priority is for money to be spent on facilities for young people. The measure is important because it will allow the money to be used to deal with one of the major problems that has afflicted London and the rest of the country—the violence caused to and by young people. Many people will put the money that may become available—whatever the amount—to good use because they know the ways in which to prevent young people from going astray and being violent to one another.

The Government should view the Bill not only as social or financial policy but as part of the immediate response to a problem that is endemic in all our communities. Out there, people are sick to death of the idea that youth violence cannot be tackled in our society. The Bill is a small mechanism for dealing with that, but it could be important. It is totemic about opportunities: a little bit of resource can turn around significant numbers of people in our community. An important consequence of the Bill will be more resources for all our constituencies, counties and regions, which will allow those who work to make youth violence history to feel more encouraged and better able to do their job. The Bill will therefore be welcome in my part of the world and this city.

Question put and agreed to.

Bill accordingly read the Third time, and passed, with amendments.

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