APPENDIX 3: DORMANT BANK AND BUILDING
SOCIETY ACCOUNTS BILL [HL] — GOVERNMENT AMENDMENTS
Supplementary memorandum by HM Treasury
1. This supplementary memorandum explains the
purpose of the following Government amendments to the Dormant
Bank and Building Society Accounts Bill that have been made by
the House of Commons and will in due course be considered by the
House of Lords.
Clause 10
Powers conferred on: The Treasury
Exercisable by: Order
Parliamentary procedure: Negative resolution
2. Clause 10 sets out a definition of a dormant
account, which includes a requirement that the account has been
open for 15 years, together with a requirement that there have
been no customer initiated transactions on the account. The amendment
to clause 10 adds a new power for the Treasury to amend this 15-year
dormancy period.
3. The Government believes that 15 years is the
appropriate period for dormancy. It was set after detailed discussion
with industry and public consultation. The Government does recognise
that there is merit in the Bill providing a reserve power to amend
the dormancy period if once the scheme has been in operation experience
suggests that the 15 year period is inappropriate. This would
provide appropriate flexibility.
4. The power to amend the dormancy period is
one which would only be used where evidence suggests that 15 years
is not the right starting point for determining whether an account
is truly dormant. Any change will not be to the account holder's
detriment due to the protections of this scheme which should entitle
dormant account holders to repayment of their balances from their
bank or building society. A change of dormancy period will not
increase the number of genuinely dormant accounts but merely the
reference period at which they are eligible for classification
as dormant. Given all these factors, the Treasury believe that
it is appropriate that the power to amend the dormancy period
is one which is subject to the negative resolution process.
Deletion of clause 21 subsection 2
5. An amendment was made during the course of
the passage of the Bill through the Lords, to require that any
directions made under clause 21 must be subject to the affirmative
resolution.
6. These direction making powers, which are closely
modelled on the National Lottery etc Act 1993 and were considered
by the Committee in their First Report of Session 2007-2008, when
the Committee noted:
Clause 21 requires the Big Lottery Fund to comply
with any directions given to it by the Secretary of State. The
directions may cover substantial and significant matters, some
of which are close to being of a legislative character, and are
not subject to parliamentary scrutiny or control. Were it not
for the fact that this arrangements models the provision in the
National Lottery etc. Act 1993, we would have recommended that
some of these directions, such as those under clause 21(3)(b),
specifying purposes for which the Fund may or may not distribute
money, be contained in a statutory instrument subject to negative
resolution.
7. The Commons amendment deletes this requirement
for such directions to be subject to the affirmative resolution
procedure. For the reasons set out in the original Memorandum
to the Committee the Treasury believe that it is appropriate that
the powers set out in clause 21 are exercised by direction.
HM Treasury
November 2008
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