Examination of Witnesses (Questions 280
TUESDAY 19 JUNE 2007
MP, MR CLIVE
Q280 Mr Fallon: I am here to ask
Ed Balls: Because I actually think
that the unclaimed assets
Q281 Mr Fallon: and you are
here to answer them. You have explained that we can count all
this money, but somehow it is not sitting in your account. Let
us turn to the issue of disbursement.
Ed Balls: I explained, because
it is a reduction in the national debt.
Q282 Mr Fallon: Let us turn to the
issue of disbursement. Originally, it was proposed that a great
chunk of this money would be spent on the Social Investment Bank.
Sir Ronald Cohen gave evidence to this Committee on that a couple
of weeks ago. It now looks as if you are going to spend more of
the money on youth centres, financial capability projects, and
the suspicion is, in fact, that you are topping-up the money that
would otherwise be spent from the Lottery Fund, which has lost
£675 million to the Olympics.
Ed Balls: I am not sure I understood
the premise of the question. At what point was it said that the
money would be spent predominantly on the Social Investment Bank?
Mr Fallon: That was the proposal by the
Commission that Sir Ronald Cohen chairs.
Q283 Chairman: He says it is £350
million over five years.
Ed Balls: It is perfectly appropriate
for Sir Ronald Cohen and his Commission to make proposals as they
see fit, as to how they would like to spend this money. Believe
me, there is no shortage of people who have ideas as to how to
spend this money, and it would be much easier to spend the money
if there was a lot more of it. However, I do not think that at
any point the Government has said that its view, as opposed to
the view of an independent commission set up in order to give
its viewsI do not think the Government has ever made such
an indication. If you go back to the autumn of 2005 when the Government
first said it wanted to move forward with a manifesto commitment,
it said at that time that it believed there should be two priorities
for the spending of resources: youth services and financial inclusion.
In the consultation document which we produced a few weeks ago
in May, which I am sure you will have seen, we said that while
our starting point had been to spend the money on youth services
and financial inclusion, we had now seen the Unclaimed Assets
Commission document and we saw the case, if resources allowed,
for making a contribution from unclaimed assets to supporting
social enterprise. That, I think, will depend upon the outcome
of the consultation here, the volume of resources and the views
of the Third Sector and the social enterprise sector. There has
never been, to my mind, any presumption that the money would be
spent on the Social Investment Bank. In fact, the opposite: the
starting presumption was that it would be spent on youth services
and financial inclusion.
Q284 Mr Fallon: We will get the bad
news to Sir Ronald Cohen. That means, in effect
Ed Balls: I have spoken many times
to Sir Ronald Cohen on this very matter, and I do not think he
and I have any difference of understanding of this position.
Q285 Mr Fallon: So, in effect, you
are spending it on youth services, youth centres, youth projects
which would otherwise have been funded out of the Lottery Fund,
which you have raided to pay for the Olympics. In essence, Minister,
you are robbing people's private bank accounts to pay for Olympic
Ed Balls: With respect, we are
not spending any money on anything at the moment, because we are
consulting on the basis of primary legislation which in due course
will allow us to release additional resources for youth services
and financial education. I would say that that is a very good
thing for us to be seeking to do. As for the Olympics, there is
no suggestion, I do not think, and no reasonable case can be made,
that we are diverting money from the Big Lottery Fund and trying
to replace it through unclaimed assets. I do not think that is
true at all. I think the Big Lottery Fund has been absolutely
clear that not only will they maintain all their commitments,
their existing commitments, but through to the beginning of the
next decade will also retain the same share of resources going
to Third Sector, social enterprise projects in their overall spend
as now. So I understand that people make these allegations, because
they see unclaimed assets and Lottery Olympics and think: "If
we put the word Lottery together we can make an accusation".
I think, if you dig into it, you will find there is not any substance
in the accusation whatsoever.
Q286 Chairman: Can I just clear up,
then, in terms of the Social Investment Bank? Sir Ronald Cohen
was clear to us when he came here that this was a Commission which
was requested by the Government. They have suggested that to get
the Social Investment Bank or to invest in poorer communities
in the UK they would need £350 million over three years.
He envisaged that coming from unclaimed assets. However, you are
saying to us this morning that it will not come from unclaimed
assets. That would suggest in our mind that the Social Investment
Bank proposal is maybe not going anywhere. It is dead, in other
Ed Balls: I did not quite say
that, and I do not want in any way to be misinterpreted
Q287 Chairman: Then help us clear
Ed Balls: Sure. The Commission
on Unclaimed Assets is independent of government. It was not set
up at the behest of the Treasury, or the Government, as I understand
it, but it has done some really good work and we were very pleased
to talk to the Commission about the work which it has done. Indeed,
while we started out with a position that money from unclaimed
assets would be spent on youth services and financial inclusion,
because of the work of the Unclaimed Assets Commission and their
proposal in the Social Investment Bank, we have said, following
discussions both with the Commission but, also, with the Third
Sector, that we would add a third objective into our consultation
document which is to support social enterprise. We say, though,
that that will depend upon the resources which are available,
the consultation and the detail of the proposals which may come
forward. I think it would be quite premature at this stage to
say that one particular institution is going to receive a certain
quantum of resources in advance of any decision about
Q288 Chairman: The important point,
from our Committee's point of view, is maybe to communicate to
you that he was very clear that to get this thing off the ground,
to have a starting chance at all, it needed £350 million
over five years. Something like £50 million or £100
million just would not do at all.
Ed Balls: I understand that
Q289 Mr Mudie: Minister, when
Ed Balls: Just to answer that
question, if I could, Chairman. I do apologise, Mr Mudie.
Q290 Mr Mudie: Accepted.
Ed Balls: I understand exactly
Sir Ronald's position. He wants to have a Social Investment Bank
up and running, and he wants it to start with a sufficient endowment
to be successful, and he wants some unclaimed assets money to
go into that. I do not think that he thinks that unclaimed assets
will be the exclusive funder of that institution, but he would
like a portion of unclaimed assets. We started from wanting to
fund youth services, and we will, and financial inclusion, but
if the quantum of resources allow us to make a contribution to
social enterprise, which could be in the form of a Social Investment
Bank, we will. However, it would be quite wrong and impossible
to come along at this point and say all the unclaimed assets money
is going to go into this institution, because that would be to
renege on a series of commitments, which we will not do. I think
Sir Ronald knows that very well.
Q291 Mr Mudie: Are you going to consult
on what you are going to spend the money on?
Ed Balls: We produced a whole
Q292 Mr Mudie: You have not answered
the question in either of them, on the question of disbursement.
So I am just asking you: are you going to consult on what you
are going to spend the money on?
Ed Balls: We are consulting in
detail on distribution
Q293 Mr Mudie: No, you are not. In
both documents you have produced a page of questions, and not
one of them is on disbursement. So I am asking you a question:
in neither of your consultation documents have you suggested you
are going to ask the public to give their views on how you should
spend the money. Are you going to do so? It is a straightforward
Ed Balls: From the beginning,
our position has been that we will spend the money
Q294 Mr Mudie: Does that mean "No"?
Ed Balls:on youth services
and financial inclusion?
Q295 Mr Mudie: You have sent out
two consultative documents
Ed Balls: We have a whole consultation
Q296 Mr Mudie: No. Tell me in either
consultative document where you ask the public to give their views
on what the money is going to be spent on. It is not in them.
So I am just asking: when do we get round to that stage of consultation?
Ed Balls: The questions are very
Q297 Mr Mudie: If it is public money
or if it is private sector money and you are not going to nationalise
it, why do you take the decision on what it is going to be spent
on? If you are going to be this even-handed: "Oh no, it's
their money; we are not going to nationalise it. We are only going
to bloody spend it!"
Ed Balls: "Are the principles
underpinning the distribution of the available surplus assets
the right ones? Where is the greatest need for funding and finance
for Third Sector organisations? What kind of activity should the
wholesaler focus on?"
These seem to me to be the right questions to be asking. My sense,
and you may have a different view, is that there is widespread
support in the country for improving our financing of and provision
of youth services. We all know that people want safer communities,
but they also want decent places for young people to go. From
the very beginning when the Government said
Q298 Mr Mudie: Genuinely, where do
you think I get that sense?
Ed Balls: From talking to your
Q299 Mr Mudie: Are we at the stage
of government where we can read the public's mind? Why, when you
are raising £350 million, do you ask every other question
but you are taking the decision on one of the key questions that
the public will be interested in, on how the money is spent? Just
let me ask you a question, and ask you "Yes or no?"
You were very straightforward with Angela in replying to: "If
the banks do not participate what will you do""Nothing".
So you gave that blunt answer. Give us a blunt answer hereyes,
or no. Are you going to have a public consultation on what this
money is going to be spent on? Yes or no.
Ed Balls: We are consulting on
whether we should spend on youth services or financial inclusion,
so the answer to that is no, we are not consulting on that; we
are consulting on how to spend the money so that we can deliver
money for youth services and financial inclusion. That was the
position from the beginning. I think you will find there is widespread
support for spending money on better youth services, and I would
think in your constituency, as in mine and the constituencies
of Members round the table, we all know that youth services is
an area which has been under-funded for decades, and we should
do something more about that. We could have decided to say there
is an amount of money, have a broad-based consultation on what
to spend it on, but that is not the road we have gone down. We
have said from the beginning
1 Note from witness: Quoting from Second consultation
document, p35 Back