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We certainly looked at the points made by the noble Lord in Committee. We have sought to satisfy ourselves as to whether it would be right and appropriate under the terms of the scheme to make available the names of individual account holders whose money is transferred to the scheme after 15 years. We consulted a great deal on the level of publicity that there would be about the scheme and the steps that would be taken to reunite customers with their accounts. It will be appreciated on all sides that the concept of the scheme—even before it comes into legislative existence—has prompted very considerable activity. We welcome all constructive suggestions on how banks and building societies can be more proactive in reuniting customers with their assets. The one thing that unites us on all sides of the House is that the money belongs to someone and that it should be transferred only when that claim cannot be substantiated. Therefore, every reasonable effort should be made to reunite dormant accounts with their proper holders. However, our view remains, as we set out in the consultation in March 2007 and in our response to that consultation subsequently, that a publicly available register of dormant account holders’ names does carry inherent risks. There is the risk of identity theft and fraud. In Committee, the noble Lord, Lord Hamilton—I am sorry he is not in his place today—expressed anxiety about the potential risk of identity theft and fraud if account holders’ names were publicly available. He felt that there would be the risk of the list being exploited, leading to false claims for repayment.

We are wary of that risk, and we think that we are right to be so. Consumer protection is an important principle for the Government. We owe it to dormant account holders not to place them at a potential disadvantage compared with customers whose accounts have not been transferred to the fund and whose names would not be made public in this way. We need to be fair to customers of banks and building societies and treat them equitably.

3.45 pm

We have listened carefully to what the noble Lord said but we do not think that the amendments are necessary. The one-stop shop is evidence of the industry’s determination—the determination of banking and building society groups—to do their best to reunite customers with dormant accounts. The one-stop shop offering this facility to the public will be launched tomorrow. It will allow executors to search for lost accounts and to face any legacy income that may be due, including that due to the charitable sector, a point on which we have had representations.

It remains questionable whether it is desirable for personal data to be transferred from banks to the reclaim fund. The prescribed scheme does not require that. There may be points of ultimate dispute and inquiry on which the reclaim fund cannot reach a judgment until it has additional information from the bank. We have made provision for that information to be available at that point. As a normal matter of course, however, we do not think that all names associated with dormant accounts should be made

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public in quite the way suggested by the noble Lord and which he indicated had obtained in other schemes in other countries.

We must also take into account the fact that the information held by banks and building societies is currently regarded as confidential. Some holders of dormant accounts may not have any concerns about their identity being made public and may find it useful in enabling them to be reunited with their account or the accounts of deceased relatives. But of course there could be others who may not wish that information to be made public and who will have deposited their money on the assumption that it could not be made public. A requirement to publish personal details without their consent raises real issues of confidentiality. It might also raise human rights issues.

The banks will transfer the money to the reclaim fund under the terms of their agency agreements and these flows will be independently verified and audited. They will not routinely transfer personal data but only, as I indicated, when it might be necessary. I do not see why a list of names would significantly benefit the individual. There appears to be little advantage in seeing one’s name or the names of one’s relatives in a list and then speculating whether this means that the money is owed or whether the name is a coincidence. It might lead to a wide range of speculative inquiries, a phenomenon which is not unknown when money has been unclaimed in other circumstances. It will also involve additional administrative costs; noble Lords opposite are always rightly concerned that we should keep administrative costs down. The Government are committed to a scheme that is cost-effective, which will help to ensure that there is public confidence in the scheme, that banks and building societies will participate fully and that resources are targeted where they are most needed, maximising the amount that is available for good causes.

I hear what the noble Lord says; he wishes that he had been able significantly to redraft the Bill. Of course, that is his right. Nothing would have prevented him from redrafting the whole Bill if he had been absolutely determined to; I know of his assiduity in that respect. However, I hope that he recognises that the Government have reached their position on rational grounds. We have taken into account his proposals; we fully understand the motive behind his amendments. On this occasion, we merely say that we beg to differ. We stand by our scheme for the reasons that I have put forward. I hope that he will think that, using the procedures of the House, he has had a pretty good run at this and will therefore feel able to withdraw the amendment.

Lord Higgins: My Lords, before the noble Lord sits down, will he deal with Amendment No. 9, which says that the reclaim fund shall have the right to ascertain,

Lord Davies of Oldham: My Lords, the noble Lord will appreciate that it will be necessary for the reclaim fund in certain circumstances to require information from the banks or building societies. It is clear that

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there will be disputed positions in which the reclaim fund will necessarily need verification of the nature of the claim. The period of 15 years triggers the transfer of resources to the reclaim fund; it does not bury the rights of the individual to regain their proper resources after the reclaim fund has obtained them. I cannot emphasise this point enough. To substantiate that their claim is justified, the individual will first go to the bank or building society where the account was held. They will be told that it has gone to the reclaim fund because the account has been dormant for 15 years or more. If the claim has some justification, it will then be necessary for the bank or building society to address the issue to the reclaim fund and for the reclaim fund to reach a judgment. I do not think that we could have a system that was fairer than that, as I explained graphically and at great length to the noble Lord, Lord Shutt.

Lord Higgins: My Lords, I am anxious not to delay the House further. I will need to consider carefully the points that the noble Lord made, in particular his reference to a one-stop shop. If one is going to have a one-stop shop, it would seem sensible for that stop to be the reclaim fund rather than any other organisation. The noble Lord did not answer the point that I made at the end in my intervention. As the Bill stands, the reclaim fund seems to be precluded from ascertaining the owners of dormant accounts transferred to it. I do not ask him to respond now, but that is, as I understand it, how the Bill is drafted. I believe that the fund needs to have the authority to do that. I find what is proposed an extraordinarily convoluted way of proceeding. The data are never transferred to the reclaim fund. The noble Lord suggested that, when there is a dispute, the reclaim fund will have to go back to the banks as well, instead of acting as what it is supposed to be—namely, a reclaim fund. However, I do not wish to delay the House further and, although I may want to return to this at Third Reading, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 2 not moved.]

Lord Higgins moved Amendment No. 3:

The noble Lord said: My Lords, during the course of our debates we had a number of discussions about the role of charities, and it emerged that there was something of a division of interest between different kinds of charities. There were those, generally large charities, which hoped that as a result of the dormant accounts being sent to the reclaim fund they would receive some benefit, whereas other charities which depended very largely on legacies rather than anything else—sometimes small charities with large legacies—thought that it would be better if the proceeds were divided in that way rather than by putting everything in a pot and handing it out through the lottery fund.

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The amendment addresses a situation in which a charity believes that it has a testator who will give it a legacy and that it should have the right to go back to the reclaim fund and ask it to decide whether there is such an account. We now discover that in those circumstances the reclaim fund would go back to the banks and ask them. That raises the question of a one-stop shop. Quite clearly, a charity may believe that someone has died and left it some money but it is not sure with which bank the deceased had an account. In that case it would be better if, as the noble Lord said, there was a one-stop shop approach. None the less, given that there is this division of opinion between different types of charities, such a charity should have the right, if it believes the circumstances are such that it has a legitimate claim against a particular account, to go to the reclaim fund about that claim. I beg to move.

Lord Bach: My Lords, I am grateful to the noble Lord for explaining his amendment so succinctly. The purpose of the amendment is to ensure that charities may reclaim directly from the reclaim fund money that they are owed as a result of charitable legacies. We do not believe that it is appropriate to give charities the right to claim repayment of an account independently of the original executors of the deceased person’s estate. Where an estate has been administered but other assets such as a bank account subsequently come to light, perhaps several years later, we believe that the proper process is for the original executors of the will to take responsibility for collecting and distributing the assets in accordance with the terms of the will.

If a customer dies, the right that that customer had to be repaid their money by their bank will pass, under the law of England and Wales, to their personal representatives who are the executors, or to the administrators of the estate if the person has died intestate. Different law and terminology apply in Scotland. The executors or administrators are responsible for claiming the money from the bank and subsequently distributing it to the deceased person’s heirs. The heirs may of course include charities to which a legacy has been bequeathed.

We recognise that there have been concerns about whether very old or historic accounts or accounts of deceased account holders can be transferred into the scheme and whether the heirs of the original holders of the account may reclaim the money. In many cases the bank will simply not know whether the customer is still alive. I would like to clear up any confusion. I would like to make it clear that the legal right to repayment of a deceased individual’s account passes directly to the executor of the will. It does not pass directly to third parties, such as the relatives, friends or charities who stand to inherit according to the terms of a will. It is the responsibility of the executor to collect in the assets and to make payments in accordance with the terms of an individual’s will. That is our intention and it should remain the case under the dormant accounts scheme. In other words, existing inheritance law will not be affected. It is not our intention to make changes to existing inheritance legislation in this Bill by, for example, enabling charities to seek repayment of money directly from a

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bank without proceeding through the usual channel of the original executors or where necessary seeking the appropriate new form of grant or probate.

Before closing, I should point out that executors will be able to search for lost accounts using the industry’s new one-stop shop website to which the noble Lord referred. Charities as legitimate heirs should of course receive their legacy income. Personal representatives also will be able to search the website on the owner’s behalf. For those reasons, it would not be right to change inheritance law as a consequence of the Bill. I therefore invite the noble Lord to withdraw his amendment.

4 pm

Lord Higgins: My Lords, I am most grateful to the Minister for that somewhat unexpected answer. This point did not come out at all clearly in the course of the discussions in the Moses Room, where a number of those with far more knowledge about charities than I have seemed to think that charities which thought they had a legacy would be able to search. I am puzzled by what the noble Lord said about their searching the one-stop shop, since presumably the one-stop shop does not actually have the list of names of those for whom the charities may be searching.

I will consider carefully what has been said. Those who have a particular interest in this matter may have a response to the Minister’s reply. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 4 had been withdrawn from the Marshalled List.]

Baroness Finlay of Llandaff moved Amendment No. 4A:

The noble Baroness said: My Lords, I have tabled the amendment because of the huge impact the Bill can have on the charity sector. I declare an interest as vice-president of Marie Curie Cancer Care, whose tireless work, as your Lordships need no reminding, provides nursing care to cancer patients.

The Bill is important not only for Marie Curie Cancer Care but for the other 53 member charities which comprise the Unclaimed Assets Charity Coalition. It is worth highlighting just how representative the coalition is of the charity sector. As well as the National Council for Voluntary Organisations, which represents 5,400 voluntary organisations across the country—it has itself recently joined—the coalition’s members include charities such as the RSPCA, the Salvation Army and the enormous Cancer Research UK. If we ignore the

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coalition, we run the risk of ignoring the sector as a whole. As drafted, the Bill appears to ignore the coalition. My amendment takes its interest into account.

There are two issues, both of which would be supported by a reserved power being included in the legislation. First, as the NCVO has argued in its briefing, which has been circulated to all Peers, should a voluntary scheme prove unsuccessful there must be mechanisms in place to enable the Government to make mandatory the transfer of unclaimed assets from banks and building societies to the reclaim fund. This would ensure that the amount of money available for reinvestment in society was maximised—which, after all, is the Government’s stated motivation behind the Bill.

The inclusion of reserve powers would not mean that the Government would have to make use of them but it would give them that option, should it prove necessary, without recourse to further primary legislation. This was a recommendation in the Treasury Select Committee’s report and, while there are merits in the suggested light-touch voluntary scheme, we must be sure that there is enough take-up of the scheme by the banks. My concern is that the removal of unclaimed assets from a bank’s balance sheet may mean that there is little incentive for them to participate.

There is also no international precedent for a dormant accounts framework run on a voluntary basis. In Ireland, Australia, New Zealand and Canada, participation by banks and building societies is mandatory. It therefore seems right to propose the introduction of a reserve power into the Bill.

On the specific issue of a register for unclaimed assets, the aim of which would be to improve reunification efforts, my own view is clear: I would like to see this Bill bring in a mandatory register. It may be that the answers already provided by the Minister will, in part, cover this, but I shall listen with interest to the Minister’s response.

Having listened to noble Lords in Grand Committee, I got the firm impression that a reserve power amendment would be put forward on Report, but as no amendment was tabled, I have tabled this amendment. It is vital that we include provisions in the Bill that ensure that we maximise the incentives for banks and building societies to reunite people, including the beneficiaries of wills, many of which are charities, with what is rightfully theirs—their assets—while also ensuring that where reunification efforts prove fruitless as much as possible is available for reinvestment in society. While a triennial report to Parliament, as proposed in an amendment tabled by the noble Baroness, Lady Noakes, would enable government to monitor the scheme’s progress and make recommendations for improvement, there would be no mechanism in place to enable Parliament to implement its wishes should it then decide that a voluntary scheme was not working. That is a significant gap, and I hope the amendment will plug it.

In their response to the House of Commons Treasury Select Committee report on unclaimed assets, the Government argued that including reserve powers would

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not be a good use of Parliament’s time. I struggle to reconcile that statement with the simple fact that it might save parliamentary time to include it on the face of this Bill, rather than having to return later. In fact, if a reserve power were not included and the voluntary approach failed, Parliament would have to pass primary legislation, and thus go through the whole debate again before the mandatory register could be established. That was why I thought we should have something in the Bill. The Government have included reserve powers in previous legalisation, such as in the Charities Act 2006 in relation to the regulation of fundraising standards, so there is a precedent.

I wonder whether we risk losing sight of what is at stake here. This is a technical Bill, but surely a simple principle also applies: it is that these are not our assets, they are not the Government’s assets, they are not Parliament’s and they are certainly not the industry’s, however much it might profit from them. They are unclaimed assets that belong to individuals and which in many cases have been bequeathed to charity as a proportion of a deceased’s estate. Of course, in cases where reunification efforts prove fruitless, such unclaimed assets would be to the public good and should be available to channel back into society. However, where it is possible to reunite people with what is rightfully theirs, that would seem to be the right thing to do. That is why the 54 charities that I referred to in my opening remarks are asking for help. One in seven people who dies leaves a valid will including legacy gifts to charity. On average, those gifts total 5 per cent of the total estate, so there are potentially large sums of legacy income that have yet to reach the charities named in the wills.

As many of us know, legacies are a key part of the income stream of the voluntary sector. For example, 46 per cent of the British Heart Foundation’s voluntary income comes from legacies, which came to over £47 million last year. One third of Cancer Research UK’s voluntary income comes from legacies, which was more than £135 million last year. In all, legacy income to the sector amounted to £1.5 billion last year.

The sad truth, however, is that, as drafted, the Bill—as the Minister knows—does not compel financial institutions to make data on unclaimed assets more easily accessible to the general public and to charities. Instead, banks and building societies will be asked to publicise the fact that they hold unclaimed assets, which will be of no help to people who do not know which institution is holding a lost asset and, crucially, it will be of no help to charities trying to trace lost assets belonging to deceased people’s estates. That is why it is important that we strengthen the Bill by ensuring a mandatory register is included in its provisions, whether that be by reserve power or by a provision that a mandatory register be created on the commencement of this Act. I urge the Government to use the unique opportunity of the Bill to get the system right for the charitable sector. I beg to move.

Baroness Noakes: My Lords, the noble Baroness, Lady Finlay, has made a powerful case on behalf of the Unclaimed Assets Charity Coalition for her

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amendment. We completely agree that a register with good access arrangements is an essential part of the dormant accounts scheme. We understood a moment ago from the Minister that the voluntary arrangements will be launched tomorrow—only a month late. There are questions about whether those voluntary arrangements will be good enough. We certainly hope that they will be, but the Minister should be aware that there is scepticism amongst the charities about that, based on their experience to date in getting information about accounts.

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