Dormant Bank and Building Society Accounts Bill [Lords]
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 sectors 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, thats nice, Ive discovered a few hundred pounds that I did not realise I had. There is an onus on
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 ones 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 Parkinsons 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
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 positionit 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. Gentlemans 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 himand anyone else who has positive suggestionsto 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 Parkinsons Disease Society because I have a particular affiliation with it. I understand that it is roughly as big as all the Parkinsons 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 Governments 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
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 industrys 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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