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Dormant Bank and Building Society Accounts Bill [HL]

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 7 and do propose Amendment No. 7B in lieu of the words so left out of the Bill. I shall speak also to the other amendments in this group. I hope that the House will agree that these amendments show that the Government have listened to the debates held both in this House and in the other place, and are seeking to reinforce the principle of transparency in the Bill. This is an issue that has been advanced on all sides, and I pay tribute to the noble Baroness, Lady Noakes, for the force with which she has presented her case. I hope, too, that she will see that we have moved to meet the arguments made. We regard transparency as being of crucial importance for the scheme. I would remind noble Lords that Schedule 1 already requires the reclaim fund to publish on an annual basis a list of institutions participating in the scheme, the amounts of money transferred into the scheme—at individual institution level, the amounts of money reclaimed by consumers—and the aggregate amount passed to the Big Lottery Fund. This information will be available for public scrutiny. As a result of being formed as a company under the Companies Act, the reclaim fund will be required to prepare annual accounts and reports each year. Government Amendments Nos. 15 to 19 require the reclaim fund to publish this information as soon as possible after the end of each financial year so that it is available for all to see, including noble Lords. Visibility of the reclaim fund’s accounts and report was a matter of concern and lengthy debate in this House and, I believe, a key concern behind the tabling of what was the original Clause 6. We believe that the government amendments address this concern while recognising that the reclaim fund is a private rather than a public body. I want to emphasise that we are talking about a body that is not a government agency. To require the reclaim fund to lay its annual accounts and reports before Parliament is unnecessary in the light of the amendments we have tabled to increase the transparency of the fund’s work. Requiring the fund to report directly to Government and Parliament would be to define it as a public body and would be out of keeping with the fund’s status as a private body. We have also reflected carefully on the debates about the Treasury’s direction-making power. I wish to stress first and foremost that it is not the case that the reclaim fund is a public sector body, so the Treasury is not in a position to give directions, as some have contended. The Bill sets out how the reclaim fund will be constituted. It does not establish a reclaim fund since that is a task for the industry. As the creature of the institutions that establish it, the fund will be truly independent of government. We do not envisage using the direction-making power in the Bill to interfere in the day-to-day running of the reclaim fund and the management of its money. That will be the sole responsibility of the Financial Services Authority, which will regulate the reclaim fund for obvious prudential purposes. The direction-making power that we are taking is not a day-to-day issue; it is the ultimate sanction that the nation would expect us to have to ensure that the reclaim fund functions in accordance with the articles of association, particularly in those areas which the FSA will not regulate and where it would not be expected to do so. This includes, in principle, the requirements in Schedule 1 to the Bill of the publication of information by the reclaim fund on the use of money to cover reasonable running costs, or the requirements elsewhere to transfer surplus money to the Big Lottery Fund. The power the Treasury will have is meant to be used only in exceptional circumstances to require the reclaim fund to comply with the statutory requirements under the legislation—no more and no less than that. I recognise that there are concerns about the power scheduled for the Treasury. However, the Government’s new amendment addresses those concerns by requiring the Treasury to lay before both Houses any directions to the reclaim fund so that there is complete transparency in the use of the power. The amendment is similar in effect to the second part of what was originally Clause 6. I hope that I have satisfied the House that the power that the Treasury seeks is an exceptional reserve power to deal with the reclaim fund. However, I accept that if and when it is ever exercised it should be subject to full transparency. I hope the House will recognise that we have a reserve power which the Treasury can effect only by ensuring that there is transparency, and that it will support the Government’s position. Moved, That the House do agree with the Commons in their Amendment No. 7 and do propose Amendment No. 7B in lieu of the words so left out of the Bill.—(Lord Davies of Oldham.)