Dormant Assets Bill [ Lords ] (First sitting)

Debate between Alex Davies-Jones and Nigel Huddleston

Committee stage
Tuesday 11th January 2022 Public Bill Committees

[The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Nigel Huddleston)]

It is a pleasure to serve under your chairmanship for the first time, Ms Ghani. I am sure you will keep us all in order.

I thank colleagues on both sides of the Chamber, and indeed in the other place, for the co-operative and constructive way in which we have proceeded so far with the Bill. There is broad support across the House for the Bill, and although there are some areas of disagreement, I am aware that they tend to be on details of implementation, rather than on the substance, purpose or intent of the Bill. To that extent, I will commit to moving at speed on the non-controversial parts of the Bill while ensuring that there is opportunity for discussion. Indeed, hopefully I will be able to address colleagues’ questions and concerns, some of which I am aware of already. I am sure that others will come up during the course of our discussions.

Clause 1 provides an overview of the operation of the scheme, which enables eligible participants to transfer money from dormant assets to an authorised reclaim fund. Having determined how much it must retain in order to meet any future reclaims, the reclaim fund distributes the surplus to the national lottery community fund, in accordance with part 1 of the Dormant Bank and Building Society Accounts Act 2008. The clause confirms that the scheme will be expanded as a whole, encompassing the new assets alongside bank and building society accounts while ensuring that this does not affect the continued operation of the provisions in the 2008 Act.

Subsection (3) sets out the main features of the dormant asset scheme, which mirror those specified in the 2008 Act. For example, beneficial owners can always reclaim the full amount owed to them. Participants transfer the dormant money to the reclaim fund, and owners therefore engage with participants, rather than the reclaim fund, in order to make a reclaim. The clause also confirms that relevant activities can be undertaken by anyone acting on the institution’s behalf. For example, an insurance provider can outsource tracing exercises to a tracing agency working to find the owner on its behalf.

[Alex Davies-Jones (Pontypridd) (Lab)]

I am grateful to be able to respond to this important Bill on behalf of the Opposition, alongside my hon. Friend the Member for Manchester, Withington.

I remind colleagues that it was a Labour Government who in 2007 first brought forward two consultations into unclaimed assets residing in banks and building societies. This led to subsequent legislation that would allow for the release of these assets after efforts were made to find their owners. The scheme was first established in 2008 by Labour through the Dormant Bank and Building Society Accounts Act 2008. The scheme has proved to be a huge success, with around £745 million being distributed to good causes across the UK, with funding for the devolved nations being distributed through the Barnett formula.

Currently, 24 banks and building societies participate in the scheme. It was always intended that the dormant assets scheme would broaden the financial products to which the legislation applies. Although the Bill makes some progress and Labour supports the need for consultation, we urge the scheme to go further. With the right safeguards in place to find the owners of assets, unclaimed winnings from gambling, pension assets and physical assets could be considered in the future too.

Labour supports the measures to ensure that all efforts are made to identify asset owners before moving on to the more robust Reclaim Fund Ltd—a public body. The independence of the fund demonstrates confidence in the process, and Labour supports this framework. However, we believe that more can be done to tighten timelines around consultation during the next stages of the Bill, and that greater scrutiny can be brought to assess the rigor of the Reclaim Fund Ltd to prevent it going into any deficit. Robust financial modelling set up under Labour has protected the fund so far, but it must be kept under review.

Labour believes that a community wealth fund should be able to benefit from the fund. Labour is also grateful for the proposed new section 18A in clause 29. This important provision will enable dormant assets to go on to create community wealth funds. These funds are able to make grants and other payments to support the provision of social infrastructure to further the wellbeing of communities suffering from high levels of deprivation. Community wealth funds are integral to levelling up, and the potential for funds generated through dormant assets to transform lives is huge.

The most deprived areas across the country often have the worst third sector infrastructure, and proposed new section 18A in clause 29 paves the way for increased governance and organisation too. Labour believes that the principles of the Bill and the 2008 Act are too broad to provide such a framework without proposed new section 18A and that the principle needs to be framed in primary legislation. We do not need further pilots of consultations, as there are already 150 projects at various stages of development. These projects will continue to be evaluated, whereas clause 29 brings forward the opportunity to pour investment into funds centred around social transformation. I know that many colleagues feel passionately about the benefits that these funds can bring to their constituencies, and hopefully we will hear some of these contributions later. In the meantime I urge the Government to support clause 29, which is absolutely central to their levelling-up agenda.

Labour firmly believes that further scrutiny of the Reclaim Fund Ltd is vital if we are to ensure that assets are used for good causes. New clause 1 is central to ensuring proper scrutiny and calls on the Secretary of State to report to Parliament annually. New clause 2 has the potential to improve how funds are reviewed and distributed to good causes, a move that could see more funding made available to the causes that need it most.

Finally, I am sure that Members will share my thanks to the organisations that have shown their support and have been pivotal in taking the Reclaim Fund Ltd forward. The same sentiments go for those participating in the dormant assets scheme. Their contributions and engagement have ensured that the fund has been made available to a huge range of good causes. Labour has always supported moves to multiply the fund’s benefits and will continue to do so as the Bill progresses.

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[Nigel Huddleston]

Clauses 5 to 7 define the pensions assets and participants that are in scope of the scheme. They also set out an owner’s right to reclaim pensions assets and the definitions of dormancy for pension assets.

Contract-based defined contribution personal pensions will be included in the scheme, in line with industry’s recommendation, with the exception of any products in which the policyholder has been automatically enrolled. Income withdrawals as a stand-alone product, as well as when they are owed as part of a personal pension scheme, are also included. Occupational pension schemes are out of scope of the Bill.

Clause 5 provides that a pension institution can transfer dormant pension benefits to an authorised reclaim fund. Clause 6 defines the pension assets that are in scope of the scheme, which are: dormant income withdrawals that have become payable; personal pensions with money purchase arrangements that have become payable; and personal pensions with money purchase arrangements available to become payable.

Personal pension schemes whose owners were automatically enrolled are excluded, as is any scheme with sums invested in with-profit funds. As I have mentioned, occupational pension schemes are out of scope of the Bill. Personal pension schemes are only in scope of the scheme if the conversion to cash happens because the owner is deceased.

Clause 7 defines dormancy for pension assets, in a way that is consistent with the principles that I outlined in my previous speech.

I therefore beg to move that clauses 5 to 7 stand part of the Bill.

[Alex Davies-Jones]

I am grateful to the Minister for introducing these clauses. We welcome the first step towards inclusion of pension assets in this legislation. However, I will press him on the potential for expansion of the clause to include further pension assets, as he has outlined. After all, broadening the Bill to include further pension assets will allow further funding to reach the huge range of good causes that are currently benefiting from this process.

As the Minister knows, pension assets were recommended for transfer in consultation. However, the Government have instead decided to restrict the Bill to just cash assets for the time being. I understand from exchanges on Second Reading and in the other place that the Government are reluctant to make this expansion while we wait for the pensions dashboard to be properly up and running, but given the long delays around the introduction of the pensions dashboard, I would be grateful if he could make some commitment as to the timetable for the further widening of this scheme with regard to pension funds.

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[Nigel Huddleston]

I beg to move amendment 2, in clause 34, page 26, line 3, leave out subsection (8).

Clause 34 sets out various final provisions, such as the geographic extent of the Bill, when the provisions come into effect and how the Bill may be cited. I commend the clause to the Committee.

Amendment 2 agreed to.

Clause 34, as amended, ordered to stand part of the Bill.

New Clause 1

Authorised reclaim funds: Duty to assess and report

“(1) The Secretary of State must make an annual assessment of the health and governance of authorised reclaim funds. The assessment must be reported to Parliament.

(2) The first report under subsection (1) must be laid 12 months after—

(a) any restriction imposed under section 18A(1)(a) of that Act comes into force, or

(b) the provision mentioned in section 18A(1)(b) of that Act comes into force,

(3) An assessment under subsection (1) must include an evaluation of the risk of insolvency of the fund.”—(Alex Davies-Jones.)

This new clause would require the Secretary of State to assess the health and governance of reclaim funds regularly in relation to the risk of insolvency, and to report on this annually to Parliament.

Brought up, and read the First time.

[Alex Davies-Jones]

I beg to move, That the clause be read a Second time.

Briefly, we can all recognise the importance of parliamentary scrutiny over the spending of funds, and it is vital that the Government are held to account on the health and governance of reclaim funds, especially in relation to the potential for insolvency. At the moment, there is no such formal process. New clause 1 is therefore vital to ensure that a regular assessment of authorised reclaim funds is undertaken.

It is our job in this place to scrutinise and ensure that funds are fit for purpose, and I hope that colleagues of all political persuasions can see the benefit of an annual report brought before Parliament. Such a report, with a thorough assessment and prediction of the future of the fund, would be a step forward for transparency, which is crucial to parliamentary scrutiny, particularly in relation to the Bill.

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[Nigel Huddleston]

I have nothing more to add.

[Alex Davies-Jones]

I welcome the Minister’s commitment on increased parliamentary scrutiny and oversight. I still feel that an annual report being brought to Parliament as a written statement, or to the Treasury Committee or the Digital, Culture, Media and Sport Committee, would be welcome to ensure oversight and parliamentary scrutiny; however, I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 2

Authorised Reclaim funds: Apportionment of expenditure

“(1) An authorised reclaim fund may conduct a review of the proportion of dormant asset money that may be spent on particular causes.

(2) Following a review under subsection (1), an authorised reclaim fund may make an assessment and recommendation as to whether this proportion should be increased.

(3) The Secretary of State may, by order, make regulation to change the proportion of dormant asset money that may be spent on particular causes, in line with any recommendation made pursuant to subsection (2).”—(Alex Davies-Jones.)

This new clause would allow reclaim funds to review the proportion of funds they are able to give towards good causes, and make an assessment and recommendation as to whether this proportion should be increased. It would also give the Secretary of State power to implement such a recommendation.

Brought up, and read the First time.

Oral Answers to Questions

Debate between Alex Davies-Jones and Nigel Huddleston

Thursday 16th September 2021 Commons Chamber

[Nigel Huddleston]

I know that conference venues and organisers have put a huge amount of work into reopening safely, with many already using voluntary certification. I appreciate my right hon. Friend’s huge support in this area. I take her point about the nature of business events; they are more organised and structured than some other events. The Prime Minister announced a range of plan B measures. Further details will be coming out, but I should emphasise that they are plan B. I would be happy to talk further with her.

[Alex Davies-Jones (Pontypridd) (Lab)]

T7. I join the new Secretary of State in congratulating Emma Raducanu on her historic victory this week; we are at a pivotal moment for women’s sport. I also commend BBC Wales on committing to show Wales’s 2023 FIFA women’s World cup qualifiers on mainstream TV because, as the saying goes, if you can’t see it, you can’t be it—visibility matters. So what commitments can the Secretary of State give to encourage women to participate in all sports, especially at grassroots level?

[Nigel Huddleston]

I know the hon. Lady’s passion for all things sport. We should probably take the opportunity also to congratulate Alfie Hewett, Gordon Reid and Joe Salisbury on their success last Saturday in the United States. On the point the hon. Lady is raising on women’s sport, I can tell her that that is absolutely a priority of mine and of the Department. W£58e have a women in sport working group, which is very effectively looking at what further actions we can take to promote and support women’s sport. I would be happy to continue talking to her about this and other issues.

Gambling and Lotteries

Debate between Alex Davies-Jones and Nigel Huddleston

Tuesday 8th December 2020 Commons Chamber

[Nigel Huddleston]

I know what a horse-racing fan my hon. Friend is, and we have had many conversations about that issue. The horserace betting levy is not part of this review, but we are having ongoing conversations with the horse-racing industry. I look forward to further conversations with my hon. Friend.

[Alex Davies-Jones (Pontypridd) (Lab) [V]]

I broadly welcome today’s announcement, but given this Government’s unforgivable delay to the online harms Bill, many questions are left unanswered. It is vital that young people are protected in their online space, so what considerations have the Government made to include age verification requirements for gambling providers as part of the online harms agenda? When will the Bill finally be brought to Parliament?

[Nigel Huddleston]

The issues of age verification, product, and the way such things are marketed will be part of this review, and they are also ongoing considerations of the Gambling Commission. This will be a 16-week review. We recognise that in these challenging times of covid, responders may need a little more time to respond to the call for evidence, and therefore the review is slightly longer than normal. We will then produce a White Paper with Government recommendations. As I said, the review is deliberately broad, and the issues raised by the hon. Lady will be part of it.