Triennial report to Parliament

I beg to move amendment No. 48, in clause 12, page 8, line 2, after first ‘of’, insert ‘or who are affected by’.

May I ask for your guidance, Dr. McCrea? All three proposed amendments to clause 12 were tabled in my name, but the most substantial is amendment No. 7. Although amendments Nos. 48 and 49 are important, they are secondary to amendment No. 7. Will you permit me, Dr. McCrea, to discuss all three or would you rather I made a cursory nod at amendment No. 48, then sat down and started again on amendments Nos. 7 and 49 in a moment?

It would be advisable to remain with amendment No. 48.

In that case, I will touch briefly on that amendment. Clause 12 requires a report to go before Parliament every three years, and the amendment requires consultation to be expanded to include those affected  by the dormant account scheme. The particular group that I have in mind is charities. Perhaps when I speak to amendment No. 7, I will expand on that point.

If I had realised that the hon. Gentleman was going to be so brief, I might have been sharper on my feet while he was speaking. I understand the point that he made. Looking at his amendment, I guessed that that was the group to which he was referring. Is this amendment not rather broad in its wording? The words, “who are affected by”, could cover all sorts of groups. I am all in favour of consultation, but I wonder whether the hon. Gentleman has drawn his amendment so broadly that we will have a consultation process that will be quite difficult to complete when considering the triennial review.

Briefly, I invite the Committee to oppose amendment No. 7, which would give the Government powers to establish a central register.

Order. We are talking to amendment No. 48.

I also invite Committee members to oppose amendment No. 48. Along with amendment No. 49, which we cannot discuss, it would add to the reports that the Treasury is required to make under this clause. I will invite hon. Members to oppose clause 12 standing part of the Bill, but I want to say that we recognise the fundamental requirement, both for a review and for thorough transparency in the reporting on the operations and working of the reclaim fund. We do not believe that the amendment is necessary or, as I will explain later, that the clause is appropriate.

I am happy to withdraw amendment No. 48, because it overlaps amendments Nos. 49 and 7. I can touch on some of the themes again if I am called to speak to those amendments. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment No. 49, in clause 12, page 8, line 3, at end insert

‘and the operation of the register of dormant account funds.’.

With this it will be convenient to discuss amendment No. 7, in clause 12, page 8, line 5, at end add—

‘(6) Where the report recommends the establishment and maintenance of a register of dormant account funds, the Secretary of State may make such regulations as are necessary for the establishment and maintenance of a register of dormant account funds (“the register”).

(7) The regulations made under subsection (6) shall provide for—

(a) particulars relating to the dormant account to be entered into the register;

(b) arrangements to allow any registered charity to enquire of the Registrar whether the register includes an account in the name of an individual from whom the charity might expect to benefit; and

(c) other particulars as may be prescribed by the Secretary of State.

(8) Before making any regulations under subsection (6), the Secretary of State shall consult—

(a) such persons as are likely to be affected by those regulations; and

(b) such persons appearing to him to be representatives of persons likely to be so affected.

(9) Regulations under subsection (6)—

(a) may make different provision for different cases; and

(b) may contain such incidental, supplemental, consequential and transitional provision as the Secretary of State thinks fit.

(10) The power to make regulations under subsection (6) is exercisable by statutory instrument.

(11) No regulations may be made under subsection (6) unless a draft of the statutory instrument containing the regulations has been laid before, and approved by a resolution of, each House of Parliament.’.

What a build-up. I had better be worth listening to, but I fear that I may disappoint.

The important point covered by the amendment has been made by several representative parties interested in the Bill, especially charities, which is why the grouping of the amendments is not as I would have anticipated. Amendment No. 7 is of the greatest import, as it would create a reserve power for a register of dormant accounts, while amendment No. 49 would require those affected by knowledge of the scheme and its operation, such as charities, to be consulted. It would provide affected charities with greater ability to trace the accounts.

I wish to make a slightly more substantial speech about such matters, because they are of importance to those people who raised them with me. Legacies are a vital source of income for charities. The BBA and the Building Societies Association estimate that up to £500 million is sitting in dormant accounts—a point that we discussed a moment ago with regard to the previous clause. The Commission on Unclaimed Assets estimates that that is about £3 billion to £5 billion. It is a substantial amount, but legacies are a particularly significant form of income and the ability to trace that money is most important for the charitable sector. One in seven people leaves legacy gifts to charity that average 5 per cent. of their total estate.

The Institute of Fundraising estimates that legacies account for 36.3 per cent. of its money, and more than one third of the voluntary income received by charities in 2007 totalled £1.6 billion. By way of illustration, last year, 46 per cent. of the British Heart Foundation’s voluntary income came from legacies, and 33 per cent. of Cancer Research UK’s voluntary income totalling well over £100 million came from legacies. I have the honour of serving as a vice-president of the Parkinson’s Disease Society, and I take a close interest in that cause. I attended a meeting with its trustees earlier this week, and I was told that its income from inherited money, gifts and legacies was about half of its total income as a charity. Legacies are extremely important to part of the voluntary sector that everyone in the House wishes to see assisted.

At present, charities are unable to locate legacies adequately that are left in dormant accounts. I welcome  the setting up of the industry’s main initiative, the website “mylostaccount.org.uk”, which allows any person or charity to go online and search using basic information. It is part of the recent reuniting scheme undertaken by the sector, but it has several shortcomings. Searches can be conducted only if the charity knows what bank or building the unclaimed assets are in. The Minister shakes his head. If he can reassure me on that point, I would be grateful.

I suppose that people must have to put in a certain amount of information and that it would be helpful to have some idea of where to search. A person might have a better sense of the starting point if he were looking for his own account than trying to find the unclaimed or dormant assets of someone who has died. I do not assert what I have to say with absolute confidence, but raise it as a cause of concern. I do not believe that I am necessarily in the right and that the Government are wrong, but there might be some accounts—internet bank accounts, for example—where searching is harder to achieve. I do not know how far back records go and the degree to which individual banks would co-operate to make the system as efficient as possible.

Amendment No. 7 deals with an enabling power that could be invoked if the triennial report found that arrangements for reuniting owners with their assets were insufficient. An amendment introduced in the other place with a reserve power to create a register was narrowly defeated in a Division. The Government claimed that current initiatives were enough to ensure strong take-up of the scheme by the financial institutions and that success, although it cannot be guaranteed, should be sufficient to reunite charities with the funds, but concerns remain.

I am given to understand that other countries operate practices that allow charities to locate money more efficiently and effectively. That is the motivation behind amendment No. 7. Although it is in the distant past and the Committee has already rejected it, I accept that amendment No. 48 was rather broadly worded.

Amendment No. 48 was indeed widely worded, given the nature of the phrase, “who are affected by”. However, similar wording appears in proposed new subsection (8) in amendment No. 7. Is the hon. Gentleman suggesting that any potential beneficiary from any charity that might at some time benefit from funds in dormant accounts should be able to question that issue? That seems to be a recipe for disaster.

I err on the side of caution, but it is sometimes difficult to define a category for consultation. One could try to list every single group that one wished to see as the beneficiaries of a consultative process, but that would be flawed in other ways.

The wider point I am trying to make is about the charitable sector’s concern. When talking about relocating money, the first instance that tends to come to mind is an individual who has left a certain amount of money, perhaps a few hundred pounds, in an account that was given to them as a teenager to help set them up. Twenty years later, they have completely forgotten about it and think, “Gosh, that’s nice, I’ve discovered a few hundred pounds that I did not realise I had.” There is an onus on  the banks to reunite such an individual with the money. It is a nice bonus for them, but in most cases it will be fairly incidental to their well-being. After all, in most cases, the person has forgotten that they ever had that money in the first place.

The charitable sector has raised the difficulty of tracking down money that was intended for a charity. Inevitably, the person concerned has died, otherwise the money would not be in the form of a legacy. Such funds are not incidental bonuses, but absolutely crucial income streams for charitable organisations. Every effort should be made to ensure that charities have the maximum possible access to the means for searching for the legacies that are intended for them. The Government must consult those organisations on how that might best be achieved. That is all I want to say, but if Members wish to intervene on me, I am happy for them to do so.

I want to press the hon. Gentleman a little further on why he thinks the website cannot be improved to undertake those searches. I went on to the website myself, purely to see how it worked, rather than because I thought I had a large number of unclaimed accounts that I had somehow mislaid. There is a lot of scope to improve the website and take on just this sort of function. I do not see the need for the provision, as we have not yet explored the potential of the website to deliver this function.

I will make two brief points in response to that intervention. First, I urge the Government to consult widely on how the money may best be accessed by the people for whom it is intended. They may well come to the conclusion that improving the website is a good way to do that. I am not coming up with a prescription, but a means by which the Government may come to a more satisfactory end point.

Secondly, and slightly off the beaten track of the point that I was making, we should be careful lest we assume that everyone person who has a dormant account feels comfortable using the internet to track down that information. I accept that a large charity would have access to the internet, and would feel comfortable using this sort of device. There may be a number of people who have forgotten about an account who do not routinely use the internet. I do not wish to stereotype those individuals, but that could be particularly true of older people. If the Government asked for my opinion as part of their three-year review, I would say that such an internet site would be a useful device, but insufficient on its own, even if it were improved.

The hon. Gentleman has clearly thought about this carefully. He and I have received the same representations, and I will touch on that shortly. We are talking about information that belongs to the bank. We had a debate yesterday about the confidentiality of data, who owned the data and what data should be transferred between the bank and the reclaim fund. Has he given any thought to the issue of data confidentiality, how that would be dealt with in setting up a central asset of unclaimed bank accounts and how the scheme would provide protection against identity theft and fraud?

The hon. Gentleman makes an extremely good point, and it is difficult to reconcile those two objectives. If one is trying to track down information, it is helpful if as few barriers as possible are put in one’s way. Confidentiality is inevitably a barrier. The Government and the Committee may think that additional safeguards need to be put in place. I gave the example of the Parkinson’s Disease Society. About 120,000 people in the United Kingdom suffer from that disease. The society has about 30,000 members, only about half of whom have the disease, thus only about one in 10 people who suffer from the disease belong to the society, and even that figure is not necessarily a good starting point to try to make an educated guess about the type of people who leave money in a legacy to a charity or a similar organisation.

It is quite hard for the charitable sector, given that it is heavily reliant on those donations, to make informed or semi-educated guesses about the people who choose to leave money to them. There may be people who are sympathetic to their cause, but who have previously shown no direct interest in the work of that charity, but choose to leave it a substantial amount in a legacy. I appreciate that there are concerns about confidentiality and practicalities, but I want to put in place a system, so that instead of a series of shots in the dark, those charitable organisations can have the information gathered together in a way that makes it easier for them to locate the money that was intended for them and which they need to carry out their duties.

I have some sympathy with the arguments advanced by the various charity groups that are concerned about this issue, and the Unclaimed Assets Charity Coalition and the National Council for Voluntary Organisations have made representations about it. Committee members have received representations over the past week advocating this reserve power, and it was debated on Third Reading in the House of Lords. We all start from the position of wanting to see as many of these accounts as possible united with their owners. That has been the spirit of the debate in Committee and on Second Reading. We want the banks to co-operate as fully as possible with the rightful owners of these accounts so that they are reunited.

I have spoken to the BBA myself about this issue, and I suspect that the Minister and his officials have done so, too. We want to encourage it to be as flexible as possible in the way in which it deals with this, subject to its duties to its customers. I understand that the BBA has written to the Unclaimed Assets Charity Coalition to try to explain how it can benefit from the method of searching that is currently available and also to work with it to establish whether there are substantial legacy moneys sitting in unclaimed bank accounts, particularly in those instances where it is the executor to the will.

Part of the challenge in considering whether the solution suggested by the hon. Member for Taunton is proportionate concerns the amount of money involved, and we touched on that topic in a previous clause. How much money are we talking about?

We touched on that topic in a previous clause. How much money are we talking about? The cost of setting up a central register would be borne, I suppose , by those accounts identified as dormant. The reclaim fund allows the expense of running the fund to be offset or  defrayed by that money, and that expense would ultimately reduce the amount of money available for the good causes identified in the Bill.

Although I have some sympathy with the case argued by the hon. Gentleman and with the various charities involved, we need to see how the scheme operates. Setting up a compulsory register would go against the grain of the voluntary scheme for which we are legislating. I am not sure that the Bill contains sufficient safeguards to make that transition from a voluntary to a compulsory scheme, and if the Government are to accept the measure, I suspect that it will need significant amendment on Report.

We must keep the area under review, and that is why clause 12(2)(a), which sets out the triennial report to Parliament, states that the report shall include

“the effectiveness of arrangements that exist to enable those with rights, including those whose rights are established by way of a will...to trace those accounts and to be paid money held in those accounts”.

That is a good way of maintaining pressure on the banks and ensuring that they do all that they can with the charities. That is my fall-back position—it puts the banks under a spotlight and requires them to continue working carefully, not only during the passage of the Bill through the other place and the Commons, but also over the triennial review period. That is an important safeguard in the interests of those organisations, but there are some practical issues about the reserve power that have not yet been fully explored or discussed, and therefore it is not appropriate to support the measure.

I share in the thrust of the hon. Gentleman’s analysis, and I invite the hon. Member for Taunton to withdraw his amendment. I, too, have a great deal of sympathy with charities for the situation that they face, and the potential problems that they have, such as tracing lost accounts that might benefit their work.

The hon. Member for Taunton caught me shaking my head, and I want to be clear why I did that. It is my understanding that multiple institution searches can currently be conducted on the “mylostaccount” website. It is supported by a telephone system for those who have difficulties using the website, and it permits individuals to nominate a representative to complete the claim on their behalf. Account holders and their legal heirs are legally entitled to claim money owed to them in dormant accounts; they can do that now. The website also allows executors or nominated representatives to conduct searches for lost accounts, and it provides guidance for those searching for information in respect of wills and legacies.

The Government welcome constructive suggestions about how industry reuniting arrangements might be further improved. I think that all parties in the House share a strong desire to do more if possible to reunite customers with money that is rightfully theirs. The hon. Member for Henley made a point about improving the functionality of the website, and I encourage him—and anyone else who has positive suggestions—to put forward his ideas about how the site could be improved to those who maintain and operate it.

We remain of the view that a central register would be a relatively expensive exercise and would place a large administrative burden on the scheme. Mandating a register through legislation is therefore not necessary or proportionate. More importantly, unlike “mylostaccount”, it would also involve a significant transfer of personal data from banks to the register operator. We have debated that issue previously, but we do not believe that it is necessary or proportionate to undertake to have a central register.

We are aware that there is a group of historic accounts for which the estates have been wound up, with lost accounts being identified. To tackle those accounts we have encouraged a dialogue between financial institutions and the charity coalition. It is my understanding that the industry has offered to explore ways in which such accounts can be identified and Cancer Research has also indicated a willingness to take the matter forward. I hope that, through increased dialogue between the industry and the charities, and through the Government using their good offices, we can try to make it simpler and more straightforward for charities to increase their legacy income by tracing lost accounts and that such work can continue. It is inappropriate, however, to include in the Bill a register scheme that we believe is currently unnecessary, so I invite the hon. Member for Taunton to withdraw his amendment.

I know that hon. Members of all parties will agree that we have a particularly impressive charitable sector in the United Kingdom. I cited the Parkinson’s Disease Society because I have a particular affiliation with it. I understand that it is roughly as big as all the Parkinson’s disease societies in every other EU country put together, which is indicative of how well established and impressive the sector is in the United Kingdom.

I understand all the points that were raised and I have some sympathy with them. There are issues of cost, the administrative burden, and the point raised by the hon. Member for Fareham about confidentiality. More is being done, and perhaps more could be done, to improve the existing arrangements. I hope that at least by tabling the amendment I have given the issues an airing, allowed the Committee to absorb them and ensured that they will remain at the front of the Government’s mind as and when the Bill is eventually passed into law. Given that I accept the points that have been made and that the subject has been aired, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

As I explained earlier, I invite hon. Members to oppose clause 12, but at the outset I want to say how much I agree with the principle that underpins it. The transfer of money into the scheme will be managed by a private sector-run reclaim fund, under private arrangements that will be put in place by the fund and the banks, in compliance with the requirements and consumer protections set out in legislation such as the banking code and regulation by the Financial Services Authority.

After the Bill has received Royal Assent and the scheme has been launched, the Government should not lose sight of the scheme, and nor do we intend to. I have  listened to the arguments setting out the importance of the triennial review, which was introduced following the debates in the other place. I agree that it is right that the Government should return at an appropriate time to review whether the scheme is effective and delivering the right outcomes for consumers. I still have difficulty, however, in committing the Government to hold triennial reviews in perpetuity for the reclaim fund and the proposed scheme. The Government will commit to undertaking a post-implementation review when the scheme is up and running, and I would like to set out how I see that review being conducted.

We propose to review the scheme three years after the Bill takes effect, and of course the review should be undertaken on the basis of robust data about customer reclaim and the transfer of money to the Big Lottery Fund. Precise decisions on the timing will depend on the evidence available.

I think it premature at this stage to describe all the elements of the review. Clearly, its terms will depend on how the scheme performs over that period. However, I understand the desire for some agreement now on the principles of any review, and I want to be as positive and constructive as possible. Although I invite members of the Committee to oppose clause 12 standing part of the Bill, I make it clear that we will have a review, and that it will cover the effectiveness of the money in the scheme, including the industry’s 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. It will be based on consultation with all relevant parties.

I simply do not accept that a triennial review, which would be conducted in perpetuity, is a sensible way forward. There should be a review, and we accept that three years after the Bill takes effect is about the right time for it, but we do not think it necessary to have in the Bill a requirement for a triennial review. I therefore invite hon. Members to oppose clause 12.

I confess to being disappointed with the Economic Secretary’s remarks. I understand the Government’s objection to the requirement to have a triennial review in perpetuity. The Chief Secretary made that objection clear on Second Reading, and she admitted, as indeed did the hon. Gentleman, that

“we must ensure that the scheme is working simply and fairly, and we think it right to review it once it is up and running”.—[Official Report, 6 October 2008; Vol. 480, c. 45.]

Having heard those words on Second Reading, I rather assumed that, rather than debating whether to reject the clause completely, we would be considering whether to amend it so that there was still a statutory requirement to undertake a review three years after setting up the scheme. We could have argued with the Minister whether one triennial review was enough or whether we should have more than one, but I did expect the principle of having a triennial review to remain in the Bill.

It is worth the Committee remembering that when the Bill was first discussed in the House of Lords, there was no reference whatever to a review, so we have got the Government to shift their position. The Economic Secretary made a statement about what the review will entail. Lord Davies of Oldham had said that he would  make a statement to that effect on Third Reading in the Lords, but he did not do so. At least now we have a little more clarification about what the review may take into account.

The Economic Secretary says again for the record that this is a voluntary scheme run by a private company, but it is being set up under an Act of Parliament, and given the public interest in the matter it is important to have continued scrutiny of the scheme. In the debate on clause 11 he said that the dormancy period in the clause is a minimum and that banks will be required to publish in the banking code how they are defining and implementing that. The triennial review set out in the Bill would have required a careful look at those arrangements in the hope that shining a spotlight on them would encourage the banks to move to best practice. That would have been an important outcome of the triennial review.

There are other important aspects to the clause on which the Minister has given no assurances. Dormant bank accounts are a very narrow set of assets, but we know from the Young report on the financial assistance scheme, from the report of the Select Committee on the Treasury and from the lobbying of the charitable sector that a huge range of other unclaimed assets could be subject to the same type of procedure.

Clause 12(2)(f) refers to those types of asset and whether a similar scheme should be established. Experience suggests that National Savings & Investments is a glaring omission involving significant unclaimed assets. It is part of the reunification scheme, for which we should be grateful, but not part of the process of transferring money from NS&I to good causes. We touched on that, and on the flimsiness of the Government’s arguments against it, on Second Reading.

The statutory requirement strengthens Parliament’s role in scrutinising the scheme and requires those involved in it to recognise that, once it is up and running, there will be a statutory review rather than just an expression of the intention to hold a review.

What will happen at the triennial review? The Government are saying that there will be one review. While I accept that there is a good argument for not having a review every three years until the end of time, what will be the mechanism for taking forward any significant issues that arise during the triennial review? At least our proposals provide for such a mechanism, because there would be another review in three years. It would be a rolling process.

The best amendment for the Government to introduce would be an order-making power to enable them to terminate the three-yearly reviews when they were satisfied that the scheme was working efficiently and in the interests of consumers and the bodies that are to receive the money. That would be far more acceptable than deleting clause 12 entirely, which would mean losing an opportunity to keep the scheme under review until Parliament was comfortable that it was operating properly and in the best interests of all the stakeholders. The Minister put us on notice on Second Reading that we would come back to the matter, but the way that has been done is unsatisfactory. I would rather that clause 12 remained.

I am happy that the Minister intends to review the Bill’s proposals in three years and that he agrees that the adequate functioning of the voluntary scheme requires transparency. Will he therefore explain whether all the information that would be collated in the triennial report will be available from other sources? What information requirements will fall on banks and building societies when they make dormant bank account contributions? How much information will they be required to give to the public or to the BBA or the BSA?

I concur with everything that the Conservative spokesman said, so I shall not repeat it. He laid out the case for the continuation of clause 12 very well and made a valid criticism of the Minister when he said that the Government could have been more imaginative in their approach to the clause rather than ordering their troops to vote it down without coming up with a more satisfactory compromise. Both Opposition parties understand that a commitment to review the legislation every three years for the rest of time, as the hon. Member for Fareham put it, would be unduly onerous, but some recognition of the concerns raised in the Lords beyond the commitment to the initial review would have been more constructive.

I must make one further point, which I raised on Second Reading but have yet to hear a satisfactory answer on. There will inevitably be a hit at the beginning, when all the money in accounts that have been dormant for 15 years or more will accrue to the central fund, and there will need to be some sort of review of how efficiently that is being done. Some of the money may not shake out of the system as quickly as it might. However, after that initial hit, in the second year we shall be talking only about bank accounts that have currently been dormant for 14 years, so there will be far less money in the second year.

With the initial hit of publicity in the media and elsewhere for the 15 years and more, quite a few people whose accounts have lain dormant for 14 years may wake up to the concept of the dormant account and suddenly remember a deposit that they put in the bank 14 years ago. The following year, there will be only those whose accounts have currently been dormant for 13 years—when that feeds through two years down the line.

We are talking about legislation whose effects will evolve, may change quite substantially—not just in the first three years, but as they work through the system—and might have an impact on customer behaviour and awareness. Nine or 10 years down the line, the people involved will be people whose bank accounts had been dormant for only five or six years when the legislation was enacted. A case can be made, which the Government could engage with a bit more constructively, that there is benefit to having more than an initial review, just to ensure that the legislation is up, running and functioning—its effect will change over time. Periodic reviews at different points down the line might reach different conclusions and find out different information from just one review.

It is a pleasure to serve under your chairmanship, Dr. McCrea. I share the bemusement of the hon. Member for Fareham that the Government have chosen to delete the clause rather than to amend it.  My hon. Friend the Minister gave a speech a moment ago that he would have given had he been moving amendment No. 18, which has not been selected but which would have deleted the whole clause. I have some sympathy with his argument, but not for removing the question of a review from the legislation completely.

For example, in subsection (1), the words

“and not more than every three years thereafter” could have been deleted. That would have allowed one review three years after implementation, without a commitment to such a thorough review later on, thereby meeting one of his major objections.

I also accept that clause 12 is incredibly detailed—probably more than is necessary for carrying out the review—but it is an awful lot less detailed and convoluted than it would have been had we accepted amendment No. 7. Therefore, it is not as bad as it might have been. The clause could be amended to improve it, but the Bill not providing for a review would be a mistake.

I hope I deduce from the Minister that we shall be able to put things right, in the sense of being able to make changes to such a scheme, when we come to new clause 2, which stands in the name of my hon. Friend the Member for Clwyd, South.

What would be the purpose of a review if it was not specified in the Bill? If banks and building societies joined the scheme only on a voluntary basis, they could opt out if they did not like what a review came up with. If the detailed rules of the scheme were those that banks and building societies had drawn up, what would the review be able to achieve? If the review was not carried out by those who were implementing the scheme, the point of the review would not be very strong.

In addition, could the banks and building societies taking part in the scheme not carry out their own reviews and change the scheme rules without referring back to the Government? All those issues will become real questions once the need to have a review of some kind is taken out of the Bill.

I take the Minister’s word that a review will happen, but if we take this approach and if the review cannot make a fundamental decision three years down the line—that decision might be, “This voluntary approach is not working and we need a mandatory approach,” and I feel that a review not specified in the Bill could not say such a thing—I think we are missing a trick.

I am happy to take the Minister’s word that such a review will take place, and I understand why he wants to delete the clause, but we need something stronger from him at some point on what his review will be capable of doing, especially if it concludes that the scheme is not working as well as it might.

I hope that the Minister, in justifying his stance on the matter, will be spouting only his own rubbish rather than anything presented by his civil servants. I entirely agree with the comments made by my hon. Friend the Member for Fareham and with many of those made by the hon. Member for High Peak.

I have one other consideration to offer. Given that the Government are now, in large proportion, the owner of two of the big four banks—presumably there will be many dormant accounts in HBOS, Lloyds TSB and  RBS—it is incumbent upon them to give stronger justification as to why a triennial review going some way into the future should be struck out in this way.

I appreciate that the Minister has some concerns with elements of the clause, but simply to do away with all the safeguards here—safeguards for Parliament, on behalf of all our constituents, but also to ensure that the system works correctly in the years ahead, not least when the Government are such an important bank owner—would be entirely undesirable.

I have listened carefully to the debate and a number of perfectly valid points have been made. When we came to the clause as a team, we had a closer look at it and felt that it would be difficult to produce effective amendments that enabled us to have a review, but not the onerous requirement to review for all time, as the hon. Member for Fareham says and which I think is accepted on all sides.

On the amount of information that will be available for the review—a point raised by my hon. Friend the Member for Clwyd, South—there are already, elsewhere in the Bill, quite substantial requirements to produce information. When we debated previous clauses and amendments, we considered the fact that the private company that operates the reclaim fund must produce accounts on a timely basis. I am therefore confident that there is sufficient information there for a review to be conducted and for it to be an effective one.

Issues were raised about the scope of the review by my hon. Friend the Member for High Peak and the hon. Member for Fareham. When conducting the review, we would want to look at the overall operational effectiveness of the scheme. The issue of whether it should transfer from voluntary to mandatory is different. Similarly, the point made by the hon. Member for Fareham about whether we should consider other assets, such as insurance assets and so forth, raises a range of issues that are not legitimately within the scope of this legislation. Both the mandatory elements and looking to extend the scope of the scheme would require additional primary legislation. It would not be appropriate in a review of effectiveness to include areas that were completely outside the scope of the Bill.

The subsection in clause 12 that relates to other assets does not talk about using this legislation to set up a fresh scheme. It just ensures that the issue of other categories of assets does not drop off the radar screen. It says that the report should look at

“the desirability and practicality of establishing similar schemes”.

It does not say anything about creating a framework for setting up such schemes. It just says that we should keep our eye on the ball and make sure that we do not forget that there are other classes of assets that people might want to look at carefully.

I do not want things to drop off the radar screen either. Of course, as a Government we want to keep legislation under review, but we have no current plans to extend the scope of the scheme, and we think it premature to commit to a specific review of other assets. It might be appropriate in the future.

I commented on how we propose to conduct a review of the effectiveness of the scheme after three years. I do not think that one should doubt the word of Government when they say they will conduct a review after three years but, if it is helpful, I am prepared to reflect on that and produce an amendment on Report which would commit to a review being held after three years.

It may be helpful to the Minister and officials to look at the Financial Services and Markets Act 2000 because that includes provision for a statutory review of the FSA and the financial ombudsman service two years after they were set up. The framework for an amendment might be found there. One of the issues that arose from those statutory reviews was that once they had taken place there was no formal mechanism to go back and review either the FSA or the FOS, and they were just kept under review. That has led in the case of FOS to quite a lot of discontent among industry members. That legislation is helpful in so far as it says that there is a mechanism to do this, but it also suggests that saying once is enough may not be appropriate.

As I have said, I am happy to talk to officials and to commit to introducing on Report an amendment that we will conduct a review. We need to be clear about the scope of the review that I am considering. As I said, I do not think that, when we have no current plans, we should be committing to a review of other specific assets at a particular time, but I agree that we should scan the horizon. Nor do I think that we should commit in three years’ time to review whether the scheme should be mandatory because, again, we have no plans to do so and we have no reason to doubt that the voluntary scheme will be successful. However, we will continue to monitor policy developments.

I am grateful to my hon. Friend, who has made a significant announcement. I hope that he will answer the other point that I raised earlier: the review must be able to achieve something. If it is dealing with a voluntary code established by a group of volunteers who are running the scheme, it is difficult to see what teeth the review might have to change the direction if necessary. I would not exclude giving the review the power to recommend that the scheme be made mandatory. I do, however, share his concern that we would not want to go back to primary legislation to implement whatever was recommended by the review. I welcome what he has said but it needs to be a review that can make changes that are necessary. I accept that a sledgehammer is not an appropriate tool to crack a nut; neither is a feather.

I agree with my hon. Friend. We should not commit to reviews and mention them in Bills, when they will be just exercises that take up administrative time and do not produce anything positive. I would expect the review to be a thoroughgoing analysis that would lead to action that produced change, within the confines of the legislative framework and the powers available to the Government through what will by then, hopefully, be the dormant bank and building society accounts Act. With that and the commitment that I have made in mind, I hope that hon. Members can support me in agreeing that clause 12 should not stand part of the Bill.

Question put and negatived.

Clause 12 disagreed to.

Clauses 13 and 14 ordered to stand part of the Bill.