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Points of Order
3.32 pm
Jeremy Corbyn (Islington, North) (Lab): On a point of order, Mr. Speaker. You will be aware that during last Thursday’s business questions a number of hon. Members, myself included, raised the issue of the horror that is going on in the eastern part of the Democratic Republic of the Congo. I understand that the Foreign Secretary is returning from his welcome visit there. Is there anything that we can do to ensure that he makes a statement, if possible, tomorrow, on whatever support can be given to meet the humanitarian needs of the people of the eastern DRC during this crisis?
Mr. Speaker: I say to the hon. Gentleman that that is not a matter for the Chair. It is up to Ministers to decide whether or not they make a statement, but I am sure that his concerns are on the record.
Paul Flynn (Newport, West) (Lab): On a point of order, Mr. Speaker. May I ask you, as the defender of the rights of Back Benchers, to examine answers to parliamentary questions? We are well used to the fact that in answers to written questions we do not always receive 100 per cent. of the information requested. The attraction of oral questions, and their great advantage, is that we can be critical of the answers that we receive, particularly when they contain certain omissions. May I therefore ask you to examine the replies given to the questions put by my hon. Friend the Member for Thurrock (Andrew Mackinlay) and me this afternoon? We sought factual advice on a matter of the gravest importance, but the responses that came from the Front Bench team did not answer our questions. I do not know what description one could apply to those answers, except to say that they were evasive. I had to withdraw my remark, but are we to believe that the word “evasive” is now unparliamentary language?
Mr. Speaker: Unparliamentary language is a bit strong; I am saying that the hon. Gentleman should not direct that term at Ministers, as he knows. What was the term that the hon. Member for Thurrock (Andrew Mackinlay) used? Did he say “confused”?
Andrew Mackinlay (Thurrock) (Lab): Bewildered—seriously bewildered.
Mr. Speaker: If the hon. Gentleman said that the Minister was bewildered, I would go for that one. For me to examine Ministers’ answers, be they written or oral, would be to add too much to the job description of the Speaker. As a trade unionist, hon. Members would not want me to get any more work than I am doing at the moment, but that is what the hon. Member for Newport, West (Paul Flynn) is telling me to do.
Keith Vaz (Leicester, East) (Lab): On a point of order, Mr. Speaker, I and several other Members received letters inviting us to join the cross-party group on balanced migration, but when I applied, I was told by the secretary that I was not allowed to join and that only Back-Bench Members, not including Select Committee Chairmen, could be members of all-party groups. Is that the case? My understanding is that as long as a Member is not a Government member, including a Whip, they cannot be restricted from joining all-party groups.
Mr. Speaker: It is up to the groups to sort out such matters and to decide whether they wish the right hon. Gentleman to be a member, so I shall not interfere in the matter. Rules have been laid down on the number of Members in an all-party group and on whether there should be a balance of officers, which clearly there should.
Orders of the Day
Dormant Bank and Building Society Accounts Bill [ Lords ]
As amended in the Public Bill Committee, considered.
‘(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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The Economic Secretary to the Treasury (Ian Pearson): I beg to move, That the clause be read a Second time.
Mr. Speaker: 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.’.
Ian Pearson: 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.
Tom Levitt (High Peak) (Lab): 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?
Ian Pearson: 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 the Member for High Peak (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.
Mr. Nick Hurd (Ruislip-Northwood) (Con) rose—
Ian Pearson: 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.
Mr. Hurd: 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?
Ian Pearson: There are some differences between new clause 3 and new clause 2. I thought it right to let the hon. Member for Fareham (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.
Tom Levitt: 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?
Ian Pearson:
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.
Mr. Mark Hoban (Fareham) (Con): 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.
3.45 pm
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. The hon. Member for High Peak (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 the hon. Member for Taunton (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.
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