Dormant Assets Bill [Lords]

Julian Knight Excerpts

2nd reading
Monday 6th December 2021 Commons Chamber

[John Glen]

I thank the hon. Gentleman for his intervention. There will be a consultation; I or the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), will come to it later.

The Bill makes provision to reflect Reclaim Fund Ltd’s establishment as a Treasury non-departmental public body and names it as the scheme’s only authorised reclaim fund. In addition, the Bill includes a new power for the Treasury to designate additional authorised reclaim funds in future. To guarantee consumer protection, the Bill’s money resolution will enable the Government to cover the liability, in the form of a loan, for reclaims should any authorised reclaim fund face insolvency.

The Bill will amend the approach to distributing dormant assets funding in England, aligning it with the model used in the devolved Administrations, who have powers to focus funding through secondary legislation, provided that it is within the parameters of social or environmental purpose. In England, the Dormant Bank and Building Society Accounts Act 2008 restricts the English portion of funding to youth financial inclusion and social investment. The Bill will enable the current restrictions to be removed from primary legislation and put into secondary legislation so that the scheme can respond to changing needs over time. The Bill will require the Secretary of State, before making an order, to publicly consult on the social and environmental focus of the English portion of funds. No changes to the existing restrictions can be made until and unless a new order is laid.

After 10 years of operation, it is right that we carefully consider how the scheme can deliver the greatest impact once it has been expanded.

[Julian Knight (Solihull) (Con)]

With the expansion in the amount of money and the number of areas subject to the scheme, there is a danger that we could end up swamping the economy in those areas. We therefore need to broaden out the scope of the good causes towards which the scheme can work.

[John Glen]

I thank my hon. Friend for that point—a legitimate point that will be raised in different ways across the country during the consultation, and one on which the Secretary of State will need to reflect in due course before an order is laid.

It is vital that we afford everyone a fair and open opportunity to have their say, so the Government plan to launch the first public consultation, which will last for at least 12 weeks after the Bill receives Royal Assent. Until we have launched the consultation and fully considered the responses, the Government are not prepared to make decisions or commitments on the ways in which future funds will be used in England. To do so would clearly undermine the validity and transparency of the consultation exercise.

--- Later in debate ---

[Julian Knight (Solihull) (Con)]

I declare an interest as chair of the all-party parliamentary group on financial education for young people. Several key supporters of the APPG have benefited from the dormant assets scheme, in which I know my hon. Friend the Economic Secretary to the Treasury takes a keen interest. His has often been a lone voice in the wilderness when it comes to financial education for young people, and we are grateful for his support.

It would be fair to say that the current dormant assets scheme has far exceeded expectations since the passage of the Dormant Bank and Building Society Accounts Act 2008. I was a financial journalist at the time, and I well remember that it was seen as revolutionary but relatively small-scale—a staging post. The then Government thought it would raise about £400 million, but it has raised £800 million. I also remember that there were a lot of questions about exactly how it would be brought about, how fair it would be and whether people would get their money back.

There were also questions about whether people would find their money was just taken, whether it would be an example of the state effectively piling into people’s lives, but we have seen a huge amount of fairness. No one can complain—even those from 1864 who lost money from their National Savings and Investments account have not come forward to say they have been mistreated in that respect.

I have seen in my constituency the huge amount of good this scheme has done. Ordinary Magic, a group based in Shirley, received £60,000 through the fund this year, and it is providing support to local children—we know from the tragic events this weekend exactly how welcome this is in my community—who are suffering from mental health conditions by providing psycho-education workshops to teach parents how to enable their children to get through these difficult times and difficult situations. It also provides personal, social, health and economic education sessions in schools, enrichment holiday clubs and breaks for children and carers, which is hugely important.

As Chair of the Digital, Culture, Media and Sport Committee, I believe it is incredibly important for our young people, particularly those living among some of our most deprived communities, to have access to the performing arts. I make reference to the Citizens Theatre, based in Glasgow, which is fantastic in its outreach. I know for a fact that it goes out into the local community; I believe it even tries to recruit young actors in chicken shops, cafés and other such places. The distribution of the dormant assets scheme is therefore providing enrichment experiences that young people in Glasgow need to expand their confidence and explore their identities through the stage. That would not be the case had it not been for this legislation, which has cross-party support.

However, I believe we have a major disparity in the existing system, whereby the devolved Administrations have more flexibility in how the dormant assets funding is distributed in comparison with England, where the funding is restricted to groups promoting financial inclusion—obviously, I have an interest in those—and social investment. While financial inclusion and social investment charities both do important work, it is only right that we widen our funding distribution here in England as well.

That is why I support the Bill before the House. Under this legislation, the Government will be in a position to increase the flexibility on how funding is allocated over time. As they see the money come in, they will be able to suit the distribution of those funds accordingly and be able to bring about real change. That is to be done through amending the Dormant Bank and Building Society Accounts Act 2008, allowing the Government to set out additional clauses through secondary legislation. It will thus be subject to a departmental consultation in the public domain, which is important, and will need the support of hon. Members through parliamentary approval, as per usual.

Supporting this change by approving the legislation before us will allow the Government to bring themselves in line with our devolved Administrations, so they can set their distribution priorities through secondary legislation. According to the Association of British Insurers, which I understand is backing the Bill, it is estimated that £2.1 billion currently sits in dormant insurance and pension products. Let us just think of the life-affirming, life-changing effects that that £2.1 billion, if correctly and safely distributed with the right to reclaim, could have on our communities across the country.

I concur with my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) in his ambition for community banks. I also place on the record my thanks to those within banking and financial services who work tirelessly year in, year out to reconnect dormant assets with their customers. They really do not give up—even with the case in 1864 with National Savings & Investments, they are probably still writing letters. Indeed, I know the sector invests millions each year in reuniting customers with their money. However, despite some of their best efforts to reconnect dormant assets with the customer, sometimes we know it is simply not possible. That said, with the greater move to online banking, customers should be in a far better position to keep track of their finances and securities.

Finally, it is welcome that, following the Government’s public consultation in July 2020, the existing scheme will be expanded to include assets from the insurance, pensions, investments, wealth management and securities sectors. This step will pump even more funding into the dormant assets scheme, in turn supporting some of the most innovative and inspiring work in the third sector.

As the hon. Member for York Central (Rachael Maskell) stated, we know the charity sector has had an incredibly difficult pandemic; £750 million was hugely welcome, but the total shortfall across the sector was £4 billion. Let us hope that some of the redirected resources from this scheme can go towards that third sector, to ensure that they can continue the work they do.

Public Health Restrictions: Government Economic Support

Julian Knight Excerpts

Tuesday 13th October 2020 Commons Chamber

[Steve Barclay]

It has not. It has provided a universal offer to all firms that are able to be open, for exactly the reason at the heart of her question. She is quite right that the displacement impact goes far beyond areas in tier 3 or tier 2. Businesses supplying them are affected. We had a question earlier about support for the fishing industry. One of the key challenges with the fishing industry was exactly the point to which she refers—they were supplying other businesses that had been affected, and that is why we put £10 million of support into that sector.

We have taken a universal approach. It is at odds, though, with the questions we often get in the House, which are very much about whether we can support this sector or that sector. We have taken a universal approach because we recognise that one cannot necessarily draw a geographical line around the suppliers of businesses that are impacted.

[Julian Knight (Solihull) (Con)]

On Sunday evening, Mayor Andy Street was told that Solihull would be in tier 1. The day afterwards we appeared in tier 2. Does the Minister recognise the crushing blow that that gives to the hospitality industry and that tier 2 is economically the worst of all possible worlds?

[Steve Barclay]

I think we all agree in this House that we want to do all we can to get the virus down and get businesses open. We do not want businesses to be in tier 2 or indeed tier 3. We want to support them so that they are able to function as much as possible.

The timing of moving between different tiers is shaped by a range of factors—the number of positive tests, the amount of testing that is being done, the views of the local director of public health and the views of local leaders such as Andy Street. We all want to ensure that as many businesses as possible remain in tier 1.

Covid-19

Julian Knight Excerpts

Monday 11th May 2020 Commons Chamber

[Julian Knight (Solihull) (Con)]

The Government took decisive action to protect the public, but as we consider our phased exit from lockdown, we must also consider the impact on UK businesses and workers. Specifically, I would like to speak to the experiences of the digital, culture, media and sport sectors.

The Department for Digital, Culture, Media and Sport accounts for less than 1% of Government spending, yet these sectors account for almost a quarter of the UK economy. Ensuring the integrity of the economy therefore means giving businesses in the DCMS sectors the support they need to deal with the challenges of covid-19. Whether in the arts, sports, media or tourism, these sectors punch well above their weight and enrich the lives of people in this country every single day. They are also the sectors that are disproportionately impacted by lockdown and social distancing measures.

Heavily regulated industries, such as financial services these days, have much more interaction with Government and the Treasury than most businesses in the DCMS sectors. Ordinarily, that is an advantage. These businesses are often small, operating for the most part without Government intervention, and many survive on tight margins, with surprisingly complex and diverse operations. When it comes to knowing how to help them in troubled times, however, that poses a challenge, with what I have to say is a lack of comprehension on the part of the Treasury.

The Digital, Culture, Media and Sport Committee, which I chair, is currently conducting an inquiry into the impact of covid-19 on the DCMS space. Already we have seen that the Government support, although welcome, is not reaching some of the freelancers and organisations that are desperate for assistance. Too often they fall between the bureaucratic cracks riven by the Treasury, which is more used to dealing with banks than bands and with accountants rather than actors.

Charities in particular are suffering. The best of British good will can be seen in our charitable sector and the more than 160,000 diverse charities across the country, which in normal times work to fundraise extensively. That is now largely impossible, and charities report that they are struggling. A shortfall of almost £4 billion over a quarter has been cited as the likely black hole that they face.

The Government’s £750 million package for charities is helpful to those working on the covid frontline, but most charities, despite doing exceptionally valuable work, without which our communities would face significant struggles, are not working specifically on the covid frontline. They still have bills to pay and are facing the same collapsing revenues. Many still have statutory requirements to keep working. To further complicate matters, charities that have furloughed staff find that those staff are unable to volunteer for them, despite being able to volunteer for other charities. If furloughed staff could volunteer for their own organisations, with regulatory oversight, that would go a significant way towards ensuring the survival of many.

For that reason, the DCMS Committee has been calling for a separate coronavirus job retention scheme to be established specifically to meet the needs of organisations and individuals in the charity and voluntary sectors, and that substantial notice be given on phasing out furloughing support to avoid a cliff edge, which is an issue for many other parts of the UK economy. The charitable sector has also called for a stabilisation fund to provide certainty to organisations at this unprecedented time, which we also support as a Committee. We ask that consideration be given to the sums that the sector says it needs and that further clarity be given about how the £750 million earmarked so far can actually be claimed.

Charities help us and our communities when we need support. Without them, public services would be inundated. We must now support them in their hour of need, so that they can continue with their vital work.

Economy and Jobs

Julian Knight Excerpts

Monday 20th January 2020 Commons Chamber

[Sajid Javid]

Absolutely. May I take this opportunity to commend my right hon. Friend for all the work he has done on all three of those issues. He is absolutely right in what he says.

Our work has started with this Queen’s Speech, the most radical Queen’s Speech in a generation. It will enshrine in law the largest cash settlement in the NHS’s history and invest more in our schools; it will revolutionise our national infrastructure and make great strides towards net zero emissions by 2050; it will level up, spreading prosperity and opportunity across every region and country of the United Kingdom; and it will build that brighter future for our country on the foundation of economic security and sound public finances. This is a one nation Government delivering the people’s priorities as we embark on a decade of renewal.

As we begin this new chapter in our country’s history, we start with strong economic fundamentals. Our economy has grown in each of the past nine years, and just today, when the International Monetary Fund updated its world economic outlook, it forecast that this year the UK will grow faster than France, Germany, Italy and Japan. Our jobs miracle continues—it is a miracle; Members would think that a party that calls itself the Labour party would welcome a jobs miracle—with the highest employment rate ever and an unemployment rate that is the joint lowest for 45 years.

The UK is an open and competitive economy with some of the most innovative and exciting businesses in the world. Just last week, new figures showed that tech investment in the UK grew faster last year than in the US, China, France and Germany. Although we are optimistic about the future, we are not complacent. It is clear that the uncertainty and indecision of recent months has held back our economy. The global economy is slowing, and an open economy like ours is not immune to global trends. Our productivity growth has not yet recovered to pre-crisis levels, acting as a brake on the potential of our country. The Government have a real opportunity to tackle some of these long-term challenges. I will set out our new economic plan in the Budget on 11 March.

[Julian Knight (Solihull) (Con)]

On my right hon. Friend’s point about investing in new technology and in the future, will he confirm that the Government remain committed to the 2018 automotive sector deal on funding for research into and the development of the infrastructure necessary to support connected and autonomous vehicles? That is a matter of great concern to my constituents and the wider west midlands.

[Sajid Javid]

Yes—I am pleased that my hon. Friend has asked me that. We are absolutely committed to that deal; indeed, we want to go further. The automotive sector is one of our most important sectors, responsible for much of the growth and many of the jobs in our economy. It will certainly get the Government’s strong support.

Let me briefly address an important question for the future of our economy: our future relationship with the EU. We are leaving the EU, its single market and the customs union. We are seeking an ambitious, Canada-style free trade agreement. In doing so, we will be a sovereign and independent country, not a rule taker, so yes, some things will change. It is a new chapter. We are ambitious for British businesses, through a close relationship not only with the EU but with other partners. Some 90% of global growth is expected to come from outside the EU over the next decade, so there are real opportunities for the UK. We will maintain high standards not because we are told to, but because that is what the British people want. Above all, we will be driven by British interests.