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I am pleased with the direction of travel of the Bill. We are talking about large sums of money being taken from dormant bank accounts and being given to good causes, so it is important that once we establish the body overseeing that transfer of money, it is not out of sight and out of mind. We need to get it set up, and then be able to feel that we have done our job effectively and so move on. I am extremely pleased that in three years time we will revisit its performance when we can talk to the various parties involved in its operation to divvy up the cash. The banks and building societies will have their view, and some who have voluntarily signed up will have suggestions on how arrangements can be
made even better. It will also give us the opportunity to talk to those who had not signed up to ask how we could persuade them to do so, without cajoling them with the threat of binding legislation. We can also talk to those who have been reunited with their money about their experience. There will be a good opportunity to sit down in three years time to establish whether the mechanism we are putting in place today is working and delivering efficiently and effectively.
I hope that new clause 2 will get a further hearing because, if we decide not to have further three-yearly reviews of the performance of the body in Parliament, it is important that there is a debate in Parliament when it can come to a settled view that it is happy with the direction of travel after three years and that it needs to have no further involvement. I prefer our new clause 2 to Government new clause 3 and, while there is no place for partisanship in this debate, I suggest humbly to my hon. Friend the Member for Fareham (Mr. Hoban) that if he does not like new clause 3, in three years time, he might be in a positionas a Ministerto change it and ensure that we have such debates regularly.
Rob Marris: I shall cover three points: Treasury discretion, factors covered by any review, and those consulted. Although this is not a fantastically well-attended debate, and I was not on the Committee that examined the Bill, it is an extremely important matter because we are, as several hon. Members have said, talking about taking peoples money. Parliament must be extremely careful when passing any such legislation.
I have given my opinion of Treasury discretion in interventions on the hon. Member for Taunton (Mr. Browne), who kindly accepted them. I do not believe that new clause 2(2), which begins, From time to time makes any differenceit is simply a statement of principle.
Mr. Martyn Jones (Clwyd, South) (Lab): I am sorry to interrupt my hon. Friends flow, but, as he did not serve on the Committee, perhaps he may be under a misapprehension. Peoples money will not be takenthe money will always be there. People who lose contact with their funds will always have access to themthat is one of my reasons for pressing for the measure for the past 10 years. People can get their money. We are talking about using the money that cannot be given back to people for good causes rather than for profits for the banks.
Rob Marris: I stand corrected on the nuancesthe measure would not take peoples money for ever more. However, it provides for taking peoples money, and they would have to go through a procedure to get it back if they resurfaced after, for example, 20 years.
On Treasury discretion, new clauses 3 and 2 are effectively no different. I prefer new clause 3 because of the factors that it covers. On the review, new clause 3(2) contrasts with new clause 2(4). The subject matter that would be reviewed under Government new clause 3 is rather greater and more intensive than that envisaged under the Oppositions new clause 2.
Ian Pearson: We have had an interesting debate, which shows that there is not a great deal of difference about substance between all hon. Members who contributed. We all believe that a review is necessary, and most of the debate has centred around whether more than one review should take place and whether provision for that should be made in the Bill.
The Governments position is that a comprehensive review in three years is sufficient to establish whether the scheme is operating effectively and that further requirements for reviews constitute a heavy-handed approach. I understand the view of the hon. Member for Fareham (Mr. Hoban), who speaks for the Opposition, that new clause 2 specifies further reviews From time to time; the wording is fairly loose, as we have discussed. I also appreciate that new clause 2 includes a power to remove subsequent reviews through the affirmative resolution procedure. However, we do not believe that we need that amount of stricture. If the review demanded further consideration by Government, it couldand wouldbe conducted in the way that my hon. Friends the Members for Coventry, South (Mr. Cunningham) and for High Peak (Tom Levitt) clearly outlined. If a review revealed that we needed to review the scheme still further because sufficient concerns remained, we would do that. Not putting something in statute does not mean that it will not happen.
Mr. Hoban: May I draw the Economic Secretarys attention to a parallel? The Financial Services and Markets Act 2000 included a power to conduct a formal review of the FSA and the Financial Ombudsman Service in two years of their being established. That measure does not rule out further reviews, but only one review of FOS and the FSA has taken place. It is all very well Ministers saying, Oh yes, we could have another review, but, without a legislative requirement, the necessity for keeping the scheme under consideration will soon slip out of the Treasurys mind. That is why new clause 2 requires further reviews, but also includes the power to remove the requirement, if appropriate. New clause 2 would force the Government to keep the matter on their agenda, whereas new clause 3 would allow it to drop off quickly, after the first review.
Ian Pearson: Let me assure the House that we would commit to keeping the issue very much on the Governments agenda, but that would also depend on what the first review concluded. If the first review concluded that the scheme was working wellthat there was extensive voluntary participation, that the reclaim fund was operating efficiently and that money was going to the Big Lottery Fund and being spent in exactly the right wayit might also conclude that no further action was necessary other than to keep a watching brief. To commit ourselves to hold a review from time to time would not be a good legislative route to pursue.
I should like to pick up some of the points that hon. Members have made. My hon. Friend the Member for Wolverhampton, South-West (Rob Marris) made the point in his speech and in response to an intervention by my hon. Friend the Member for Clwyd, South (Mr. Jones) that we are talking about customers money. A great deal of time and effort has already been spent on reuniting customers with their money. My hon. Friend the Member for Wolverhampton, South-West talked about the procedures that people will need to go
through to reclaim their dormant account money, so I ought to explain that doing so should be very simple. It should require no more than taking two forms of identification to ones bank or building society and saying, Id forgotten that I had this money in my account. This is meplease give me the money. All the wiring that will support subsequent claims on the reclaim fund to reimburse the bank or building society will not be seen by the customer, who will just have to undergo a simple transactional exercise, just as people go their bank or building society and withdraw money that is rightfully theirs.
My right hon. Friend the Member for Leicester, East (Keith Vaz) made two important points. First, he asked whether there would be an independent element in the review and noted that the clause as drafted requires that the Treasury carry it out. As we have made clear, the review will be undertaken in consultation with industry, consumer groups and the voluntary sector. We see the process as a consensual one. We do not specify in the Bill whether a Treasury official would carry out the review or whether we want to commission independent consultants to do it, but that is a decision that we would want to make at a later stage.
Keith Vaz: I am most grateful to the Minister, but I hope that he will not have consultants conducting the review. He has put a jolly good new clause before the House and presented a brilliant Bill. Let us not spoil it by bringing in the consultants. If he wants to bring someone in, he should choose some great, towering figure from business or whereverI do not know what Lord Digby Jones is doing these dayswho will have a proper, independent look. Please, please do not go to consultants.
Ian Pearson: I take my right hon. Friends point. My point is that there will be extensive involvement and consultation as part of the review process. Whether the review team will be made up purely of Treasury officials or whether we want an independent person in charge, whoever they might be, is something that we can consider later, when drawing up the review.
My right hon. Friend also discussed the liquidation of BCCI. I stand to be corrected, but my understanding is that accounts from the former BCCI are not likely to be transferred into the reclaim fund or meet the requirement of dormancy, as defined in the Bill as drafted. Should that not be the case, however, I will endeavour to come back to him. However, the principle is that the scheme is voluntary and the reclaim fund is a private sector organisation. There is discretion on the part of the participating banks and building societies to interpret whether such accounts are dormant. That is one of the flexibilities in the system, which we believe to be one of its strengths.
Mr. Hoban: The right hon. Member for Leicester, East (Keith Vaz) raised an important issue. Is the Minister saying, in effect, that the liquidator would be able to choose whether the remaining assets, in this case in BCCI, would be available for transfer to the reclaim fund? The liquidators duty to maximise the amount available for creditors would seem to suggest that doing so would be wrong and that any moneys remaining in dormant accounts should stay within BCCI and form part of a dividend to be distributed to creditors.
Ian Pearson: My understanding is that the latter would obtain. There is also the issue of what would happen if money was transferred into the scheme and a bank subsequently became insolvent. In those circumstances, I think that the customer would still be able to reclaim their money, and that would be the right thing to do.
Keith Vaz: The Minister said that the customer would be able to reclaim the money. Would they reclaim it from the liquidator, or would it go back to the insolvent bank first? I think that that was the point that the hon. Member for Fareham (Mr. Hoban) was making.
Ian Pearson: Let me try to explain it first. If it is still unclear to my right hon. Friend, I will endeavour to write to him. The key principle is that dormant accounts are transferred to a reclaim fund, then transferred on to the Big Lottery for distribution to worthy causes. If, at any time, a customer with a dormant account should realise that their account is dormant and want to get their money, they can go back to the bank or building society. That procedure would pertain in a normal situation, but I would suggest that it would also pertain in an insolvency. The customer would have the same rights as any other retail depositor in an insolvency. If I need to make any further clarification on that, I will ask leave of the House to do so.
In conclusion, I do not think that there is a great deal of difference between new clauses 2 and 3. The principal difference is the question whether there should be a review from time to time, or whether there should be just one review, followed by the Government making a commitment that, if we felt further reviews were necessary, we would endeavour to ensure that they took place. I hope that the hon. Member for Fareham will not feel that he needs to press new clause 2 to a vote, but if he does, I will invite my hon. Friends and other hon. Members to oppose it, and to support the Governments new clause 3.
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