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Dormant Bank and Building Society Accounts Bill [HL]

My Lords, I listened carefully to the noble Lord, Lord Shutt, presenting what I can only call well rehearsed arguments. We last heard them in February, not as far back as January, but I freely confess that that is a long way back. I remember the force with which he presented the argument then, which is why I have prepared with considerable care for the issue today. The noble Lord must accept that, if there is a merger between two societies that takes them significantly past the line that we draw, they have moved from one category into another. It will not do for him to say that that is a pity because one of them, at least, was small. All banks and building societies started small, especially building societies. It may be a long time back for him to remember—it takes him back past his Leeds and Holbeck days—but all banks and building societies started small. No one would suggest that our major banks are small, local institutions. That is the logic behind the Bill: there is a difference between institutions that are small and local and those that are not. We consulted widely on where the line should be drawn. The noble Lord knows that the institutions have offered broad approval to the proposal. There have been recent changes of some significance, but he will have to accept that this will always be the case when we draw up a set of criteria and institutions change through mergers. He cannot sustain much of a case on that. The noble Lord is right to say that large institutions are experienced grant-makers; of course they are. We could have proposed that the whole of the fund was left in the hands of those institutions. However, the banks do not own the funds. The people who have the accounts own these resources, which is why those people have the right at any stage to claim from the reclaim fund if their resources have been transferred to it. It is their money, not the banks’ money. It is a chance feature of banking activity that there are dormant accounts, which add up to a considerable sum of money. Institutions have signed up to the concept that these resources should not lie dormant—they are of no use to the individual, who, by definition, is not taking any advantage of them—but should be put to community use until someone lays claim to them, when they will get their full reparation. Where the institutions are small enough to be defined as local, they will take responsibility for distributing these resources in their localities. In the case of large institutions, which we have defined in the Bill, it is right that the objectives should be defined as nationwide objectives in principle but that the distribution should be effected through a guaranteed distribution mechanism. As I said earlier—I do not want to repeat myself—that is the role of the Big Lottery Fund. The noble Lord has fought his corner well and strongly. I know that he feels deeply about these issues, but I think that a great deal of his commitment is about the small and the local, the force of which the Bill recognises. Of course the Government recognise the strength of the small, mutual society, but we must make provision for a different world. Nine of our building societies—eight now, through the changes—are very large indeed and it is right that we have a different strategy for them. I therefore hope that the House will not accept the noble Lord’s amendment and will agree to the government amendment.