Select Committee on Treasury Minutes of Evidence

Examination of Witnesses (Questions 100-116)


19 OCTOBER 2005

  Q100  Kerry McCarthy: With National Lottery prizes and so on there is a cut-off and you do not claim after a certain time. Surely at least with these prizes there should be a cut-off?

  Mr Cook: There is no cut-off. Whenever you find us, you get the money.

  Q101  Kerry McCarthy: Do you not think it would be a good idea to have a cut-off?

  Mr Cook: No, because if I were appearing before a committee like this, I think I would be yelled at if I cut it off! The prize is there. The prize is owned by the person that owns the Premium Bond. When that person steps forward, we will give them the prize, and we will do everything we can to identify those people and encourage them to step forward. Meanwhile, the money remains there.

  Q102  Kerry McCarthy: There must come a point though when you accept that the prize-winner or the owner of the account is not—

  Mr Cook: We are 142 years in and we have not got to it yet!

  Q103  Mr McFall: £1.8 billion in dormant accounts—that is quite a sum. We read in the papers estimates of £15-£20 billion in the whole country, and yet you hold £2 billion. So that is important. If the Treasury came to you tomorrow and said, "We are putting these dormant accounts to charity", how much could you give the Treasury in terms of what you have identified already, that is ready and available? Because, from what I believe, the discussions between the banks and the Treasury concentrate on, "Oh, well, we can't really for sure say how much there is and what we can give you, because of legal complexities". What could you give, if the Chancellor came to you? What could you offer him?

  Mr Cook: He has already got it. This is the point. I have not got it!

  Q104  Mr McFall: But the dormant accounts are going to go to charity.

  Mr Cook: Yes, but I have not got the money.

  Q105  Mr McFall: How much of that money do you think could be given over to charity then? That is the point I am making.

  Mr Cook: It is not for me to decide what could be given over to charity. The money—

  Q106  Mr McFall: You are the Chief Executive.

  Mr Cook: Yes, you could try that line.

  Q107  Mr McFall: Are you not responsible?

  Mr Cook: I am a very responsible man. You already know that. There is £25 million of unclaimed prizes; £1.8 billion of dormant accounts. We have all that money attached to persons that we cannot trace. At any time when an individual steps forward and proves their identity, we can give them the money. I just need to make sure—

  Q108  Susan Kramer: But if they are 140 years old . . . !

  Mr Cook: Correct. Far be it for me to decide which are the ones which will definitely never step forward. The point to bear in mind is that this money lies in the national debt. It has already been spent.

  Chairman: It has been used. It is already being used.

  Q109  Mr Todd: You rather dismiss the idea of a headline-grabbing statement about the maximum amount. I think that is actually what you want to do, do you not? You do wish to attract publicity to this subject.

  Mr Cook: On dormant accounts?

  Q110  Mr Todd: Yes.

  Mr Cook: Oh, yes. This is freely promoted.

  Q111  Mr Todd: Can I suggest that if you cannot produce a headline-grabbing figure, to go away and make one up?

  Mr Cook: It was the size of the prize. We issue press releases regularly. We usually find that we can run it about once a quarter and the press will run with it.

  Q112  Mr Todd: The good story is someone who has come forward after 25 or 30 years and claimed one.

  Mr Cook: And we have some case studies. We do supply case studies to the press, with a photograph of a happy couple, and all that sort of stuff.

  Q113  Peter Viggers: £1.8 billion would be worth something like £90 million a year in interest, very roughly. Is that credited to your value added?

  Mr Cook: That includes the interest. This money continues to accrue interest, correct.

  Q114  Mr Love: Last year, I think it was, you mistakenly took £4 million from Premium Bond holders. That money has all been paid back. However, what changes have you introduced to ensure that sort of thing does not happen? You have talked a great deal about the trust that your customers have in you. Incidents of this nature, although they are small amounts of money, do an enormous amount of damage. How do you ensure that it does not happen again?

  Mr Cook: First, just to say that we took that situation extremely gravely. It was only a couple of hundred cases out of 26 million, I know, but we took it extremely seriously. The money was all credited back by CHAPS payment the following day. Each one received a personal letter from my Operations Director, and we sent them a voucher or whatever, and apologised. The problem lay between us and various intermediaries in the banking system, where a file was presented twice. So it was very clear what the problem was, and additional checks have been put in to make sure that that type of file could not be processed twice. It is no good my saying, ". . . but it was outwith my control", because it was my brand and my customers, and it is just no good to—

  Q115  Mr Love: And they blame you.

  Mr Cook: Yes, and they are right to. We have studiously overreacted to that issue, to make sure that that particular circumstance cannot happen again.

  Q116  Chairman: We will leave it there, Mr Cook. Can I thank you and Mr Bayley for coming this afternoon? You have continually described it as a business, and I would commend to you some of the points we made at the very beginning. I think these accounts could be even clearer—if I can put it like that—in terms of showing the actual sales and the outturn, maybe on a five-year basis. Perhaps you can consider that next year.

  Mr Cook: A point well made.

  Chairman: Thank you very much.

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Prepared 29 November 2005