Mr.
Browne: 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. John
Howell (Henley) (Con): 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.
Mr.
Browne: 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.
Mr.
Hoban: 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?
Mr.
Browne: 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.
Mr.
Hoban: 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?
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. 3.15
pm 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.
Ian
Pearson: 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.
Mr.
Browne: 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.
Ian
Pearson: 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.
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