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I have to say that it is a very sad story—a mixture of incompetence and deliberate blindness and delay. In ordinary circumstances I would be tempted to test the opinion of the House, in accordance with the last few words of my amendment. Two things hold me back. First, there is undoubtedly a need to improve the energy efficiency of the household sector as a whole. This order at least makes a serious effort to address that problem. In Grand Committee, the noble Viscount, Lord Brookeborough, from the Cross Benches, demonstrated how much more needs to be done, compared with a country such as Denmark. The noble Lord, Lord Woolmer of Leeds, offered a suggestion that the industry might,

Secondly, there is an opportunity for the Government to deal with this in the Energy Bill, now in Standing Committee in another place. They could correct the flaws that I have identified in this order. It is not open to Parliament to amend statutory instruments, but Parliament can amend Bills. I look forward to hearing the Government’s response. I beg to move.

Moved, as an amendment to the above Motion, at end to insert “but his House regrets the failure of Her Majesty’s Government to mobilies its sources of information to target the measures to help priority group households in time for the start of the three-year period of the order and the potential severity of the penalties that can be imposed on suppliers by Ofgem for any failure to comply with the 40 per cent obligation imposed by the order; and calls on the Government to withdraw the order”.—(Lord Jenkin of Roding.)

Lord Rooker: My Lords, I am honestly not sure where the noble Lord is coming from on this. He says that he does not want to test the opinion of the House but I would invite him to do so. If he is really serious about what he is saying—that this thing is not going to work and that we should not be doing it—he should go the whole hog. To make the speech that he has just made, all the answers to which he has had since Grand Committee last week, just means that now I have to repeat myself and repeat what was in the long letter I sent him.

Lord Jenkin of Roding: My Lords, I have had no further answers.



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Lord Rooker: My Lords, I am always getting this. The letter is there. I signed it yesterday. I do not know anything about the internal postal system in this place, but it was signed yesterday afternoon and it answered all the points that the noble Lord made. I told him that he would get a letter before today, which is why we delayed the Motion from Grand Committee until today, at his request. I shall not apologise for the delay of the letter—it is in the system. Perhaps I should have delivered it myself. Sometimes if you want a job done, that is what you have to do.

A noble Lord: It is not good enough.

Lord Rooker: My Lords, I quite agree that it is not good enough. Perhaps if it would satisfy everybody I should stand here and read the letter out, but I do not know whether that would be a good use of the House’s time.

The noble Lord makes two central points, both of which have a degree of justification. He asked, first, how you identify the people concerned and, secondly, about the force of the penalties on the companies. Those are the two points dealt with in the amendment to the Motion.

On the first point of identifying people, in the fourth Question today we have just heard about a situation in which people are identified and still do not make the claim for the bursaries. It is bewildering when the money is available that people do not make a claim. In this case, it is somewhat more difficult. Last year 1,000 households were targeted by post—so obviously it was done on a fairly small scale—to test the system whereby the Government get the addresses and take the material from the companies. This year, the mail shot targeted 250,000 households specifically in receipt of pension credit. It is not just any 250,000 households, but single-person households in urban areas and two-person households in rural areas. Again, the Government got the information for the addresses and the industry supplied the necessary leaflets. That was organised in partnership with the DWP, the department that I still call Trade and Industry and eaga, the Warm Front campaign manager. We will work closely with the energy suppliers over the next few months on the feedback from that targeted mail shot because that may be a way for the future.

There is an issue of data sharing here. I would not come to this Chamber asking for permission to disclose the names and addresses of individual beneficiaries to any company, whatever good it was going to do. It has to be done a different way and we have to be serious about this. We want to target the people who we know are out there and are fuel poor, but we have to do that in a way consistent with protecting their privacy. Nobody likes having their door knocked on by an official from the council and being told, “You live in a slum, we’ve come to help you”. They do not like it. My constituents who lived in prefabs did not like it; people on benefit do not like being told, “You’re poor, we’re from the Government and we’ve come to help”. We have to do it another way, so that there is a partnership and some ownership over the decision—in other words, so that

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it is the applicant that makes the claim. We have to get the information to the applicant in the best possible way. That is what we are trying to do with the mail shot of 250,000 people on one particular benefit—pension credit. It is highly targeted.

We also have 50 other projects that have been offered funding through the community energy efficiency fund, which was launched in June last year. Those projects demonstrate cost-effective ways in which to deliver the carbon emission reduction targets and Warm Front on a local basis. Of course, there are partnership arrangements with social housing providers and charities, which can be done by the companies because they are going to the landlord, not to the individual. So the information transmits through another route. It is second-hand, I fully agree, but I am happy to defend the system because I am not prepared to come to the House to ask for 11 million names and addresses to be given to private companies.

I fully accept that the penalty could look onerous, but as part of its enforcement powers, Ofgem—which is responsible for regulating this scheme—has the power to impose a financial penalty, as I said in Committee. That penalty has to be reasonable in the circumstances and must not exceed 10 per cent. That does not mean that any company that does not meet its target gets fined 10 per cent of its turnover, or even gets fined, because Ofgem would be duty-bound to compare the performance of that company with others in the sector—otherwise that would be completely unfair and unreasonable. We would know whether companies are in breach of the requirement, so it is not inevitable that a financial penalty would be involved. Ofgem first has to decide whether it would be appropriate to do so.

I do not see what the problem is. I did not have every answer for the noble Lord, who had given notice of his questions to the department. I have since answered them in a letter, and I hope that I have answered them now. If he does not like it, I invite him to test the opinion of the House. The reality is that he is asking for the order to be rejected. I do not think that that is a very good idea. I hope that I have given him the answers he requires; if I have not, it is up to him what he does in the next stage.

Lord Jenkin of Roding: My Lords, I understand that I have a right of reply. I am well aware that many noble Lords are waiting for the next business, and I will be extremely short. I have to say that the noble Lord has totally failed to satisfy me. He has once again had to apologise for the failure of the system even to get a letter into my hands. I was in the House last night until nearly 10 o’clock; I arrived here this morning before 10 o’clock. I have not had the letter. What on earth goes on? One finds the noble Lord, Lord Rooker, apologising for his department again and again—we have had that in relation to other issues. I feel sorry for him because it is very difficult to lead a department, which is basically a failed department.

The noble Lord has not answered the question. This three-year period starts next April; the 40 per cent runs from next April. He has described the very limited pilot schemes that will take place before then. I said in Committee, and I say again, that I am sure that

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that is the way ahead, but why only now? This system and its predecessors have been running for years. Why has not anybody thought of letting HM Revenue and Customs, the Department for Work and Pensions and the local authorities distribute the leaflets to the targeted households until last year? That is why the amendment refers to the failure of the Government,

It is all very well, if I may say so, for the noble Lord to say, “Of course Ofgem does not have to impose the full 10 per cent”. I discussed this with officials yesterday. The answer is, they say, that if it puts too high a penalty it can be subject to judicial review for being unreasonable. There is no appeal. The only thing that the company can do is to go to the courts on judicial review and say, “This is unfair. This is what we have tried to do, but the Government’s system has been so defective that that is why we failed”.

Finally, I am not pressing the amendment to a vote because it is right that the Government should be tackling the energy efficiency of the household sector. Most of this order is directed to that. I think that they are guilty of severe maladministration in relation to the priority group, but we do not want to stop the order going ahead for the rest of the household sector. Further, any changes to be made could be made in the Energy Bill, which is before the other place. I think that that is the right way ahead. I beg leave to withdraw the amendment to the Motion.

Amendment, by leave, withdrawn.

On Question, Motion agreed to.

Dormant Bank and Building Society Accounts Bill [HL]

3.28 pm

Report received.

Clause 1 [Transfer of balances to reclaim fund]:

Lord Higgins moved Amendment No. 1:

The noble Lord said: My Lords, it may be helpful if I deal also with Amendments Nos. 2 and 9.There has been very widespread support for the objectives of the Bill; namely, that banks should be able to transfer the assets in dormant accounts to a reclaim authority, and that those assets could then be distributed to deserving causes while at the same time preserving the right of the owners of the assets—I prefer the term “owners” to “customers of the bank”—who subsequently wish to make a claim against the bank to do so; but under the Bill to do so against the so-called reclaim authority. While there is widespread support for the objectives of the Bill, there is also widespread concern about its structure, both with regard to the way in which the assets are transferred to the so-called reclaim authority and, at the other end of the process, the way in which the proceeds are distributed.

In Grand Committee in the Moses Room, I argued that it was crucial that every effort should be made to find the rightful owners of dormant accounts. I believe

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that is common ground throughout the House. The banks are certainly making far more effort than previously to find the owners of dormant accounts. Having had much experience of this in relation to the claims resolution tribunal for dormant accounts in Switzerland, I argued that if one really wished to find the owners there was a strong case for publishing the names of the dormant accounts, thereby enabling anyone who thought that they might relate to themselves or to a relative—particularly heirs, of course—to make a claim. It was argued against that that there were problems of banking confidentiality and we had a considerable exchange on this issue. I have made further inquiries about the situation that existed in Switzerland vis- -vis dormant accounts and it is clear that it was closely prescribed under Swiss law to a specific period; notably, that when the depositors may have been victims of the Holocaust, although we dealt with many other accounts. None the less, there is a strong case for trying to find the owners of dormant accounts in that way.

As regards Amendment No. 1, I suggest that it is crucial that the bank or building society concerned should provide the reclaim fund with the details. If the function of the reclaim fund is to deal with claims made after assets have been transferred, that seems sensible. I suggest in Amendment No. 2 that the reclaim fund rather than the banks should publish the names. Be that as it may, I think that is the right way to approach the matter. But in any case it is important that the details of the dormant bank accounts should be transferred to the reclaim fund.

The situation envisaged in the Bill is very strange. If I understand correctly what the Government are proposing—no doubt the Minister will confirm whether I am right—the assets will be transferred from the banks to the reclaim fund but they will not tell the reclaim fund who the owners are. Instead, if someone subsequently wants to make a claim against the reclaim fund, an agency agreement will be set up between the banks and the reclaim fund. So although the assets have been transferred, the responsibility for any subsequent claim will still rest with the banks. They will have the data. That seems to me an extraordinarily roundabout way of doing it. The obvious thing to do is to transfer the data to the reclaim fund, and for that fund to deal with any claims. As the measure stands, the reclaim fund does not act as a reclaim fund; that function is still being performed by the banks.

There is a further point about Amendment No. 9. The activities of the reclaim fund are closely circumscribed by the Bill—it can do only what is mentioned. Strangely enough—perhaps the Minister will address this point—it does not appear to be empowered to ascertain the owners of the dormant accounts. Therefore, Amendment No. 9 says that it should be able, when dealing with claims, to ascertain the owners of the dormant accounts transferred to it. Here again, it would seem that the obvious thing to do is to transfer the data to the reclaim fund rather than for them to remain, rather like the smile on the Cheshire Cat’s face after the Cheshire Cat has disappeared, with the banks.



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These are difficult issues. I am increasingly conscious that if a Bill is structured in a strange way it is virtually impossible for your Lordships’ House to make fundamental changes. We go into a procedure in the Moses Room, where there are no votes and amendments cannot be made. We can vote at Report stage but increasingly there is pressure not to pursue matters further at Third Reading. So the number of votes that one can have on a Bill in your Lordships’ House is very limited. Consequently, if one wants to restructure a Bill, however defective its structure, it is extremely difficult. None the less, I hope that the Government will accept these amendments, which will do something to resolve the problem of the initial transfer of funds to the reclaim fund. No doubt on later amendments we will come to issues about how the funds are distributed, but those are separate issues. I beg to move.

Baroness Noakes: My Lords, I briefly associate myself with comments made by my noble friend about the restrictive nature of our consideration of some Bills under the Grand Committee procedure. As my noble friend stated, it restricts our ability to look at structural issues.

My noble friend is particularly concerned that the reclaim fund should be involved in the activity of an individual seeking repayment of his or her money. That is not what the Government, banks or building societies appear to intend, so it is difficult to get that into this Bill. I say in support of my noble friend that the incentives for properly effecting repayments, if they are to be handled by the banks, are very weak—in fact, they are non-existent. Once the bank has handed over the dormant account money to the reclaim fund, the bank has no obligation in respect of repayment. We discussed that point in Committee. That would mean that when the banks handle repayments, they have no incentive to minimise them or calculate them correctly. My noble friend’s idea of transferring this responsibility to the reclaim fund has genuine merit in terms of getting the incentive structure right within the Bill. I hope that the Minister will carefully consider it.

Lord Shutt of Greetland: My Lords, if I may interpret what the noble Lord, Lord Higgins, means, I think he wants to know how it is going to work. To my simple mind, it seems that, once the bank decides that surplus funds are available and it has made every effort to trace the owners, it then writes a cheque for, say, £5 million and sends it to the reclaim fund saying, “This is in respect of these 10,000 deposit holders”. I assume that they will be listed somewhere, because if someone else turns up and the bank says, “Well, we sent your money on”, the person will say, “I did not deal with the reclaim fund, I dealt with you”. Therefore I should have thought that the bank would go to the reclaim fund and say, “Look, here is the proof. That is the name on the list that corresponds to the cheque that we sent. We would like the money back, please”. If that is not the case, it should be explained to us.



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Lord Davies of Oldham: My Lords, I am very grateful to the noble Lord, Lord Shutt, because he has explained exactly the Government’s thinking on this; namely that it is the bank’s responsibility and the expectation will be that customers will go to the bank if they have a claim after 15 years and the resources have been transferred. The bank will have the information and will then be able to process the reclaim. I am very grateful to the noble Lord, Lord Shutt, who put these things in a pithy way. I have 25 pages of notes to describe what he has explained in a matter of seconds to the general delight of the House, and I am sure to the total satisfaction of the noble Baroness and the noble Lord. Perhaps there is a bit more in the argument that I need to address, but nevertheless I express my gratitude to the noble Lord, Lord Shutt, for his clarity.

I am sorry about the procedural lament. It seems to me that the Committee stage provides the basis for clarifying what the issues are. As we would expect, noble Lords opposite have done an absolutely excellent job in clarifying those issues and identifying the areas that they wish to pursue further. Here we are on Report with those issues having been identified, so I am not sure that we ought to lament the processes by which we are considering the Bill; far from it. They are eminently defensible, and the House generally agrees that the system works well. If the noble Lord thinks that the structure gives the Government an extraordinarily easy ride, let me say from this Dispatch Box that that is not what it feels like. In Committee, over four days, we were subject to very intensive scrutiny and to some very intelligent questions, as we would expect. Here we are on Report dealing with the digested wisdom of those issues and the areas in which there are still matters in dispute. I cannot think of a better way of processing legislation, and the House should take pride in that.

I thank the noble Lord, Lord Higgins, for reminding the House that the Bill commands widespread support. It is a benign Bill, which has objectives to which we all subscribe, and therefore, within that framework, the noble Lord is right to seek justification for the way in which the Government have gone about achieving the ends of what—I emphasise—is still a private scheme. We will come to those issues with rather greater sharpness later.

Let me make the obvious point that we looked very closely at the arguments made by the noble Lord in Committee. After all, he drew on an illustration from another country that has put such a scheme into practice with considerable success. We are always eager to learn any valuable lessons from others who have trod the path before us. The Swiss account scheme largely related to historic accounts. It will be appreciated that many of the customers dealing with our scheme will still be alive. They may regard the fact that they hold an account as confidential and may object to the information being published. The noble Lord has got to face up to the issues of confidentiality, which I will emphasise in a few moments, and the extent to which the Government ought to tread carefully—or not—regarding those issues.



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