Dormant Assets Bill [Lords]

Jim Shannon Excerpts

2nd reading
Monday 6th December 2021 Commons Chamber

[The Economic Secretary to the Treasury (John Glen)]

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

Over the past decade, the dormant assets scheme has released more than £800 million to tackle systemic social challenges and to support the communities that need help most. This Bill is estimated to unlock £880 million of additional funding to ensure that the dormant assets scheme can continue to support innovative, long-term programmes addressing some of our most pressing social and environmental challenges. The scheme is led by industry and backed by the Government. Its aim is to reunite owners with their financial assets; where that is not possible, the money supports vital social and environmental initiatives across the UK.

Consumer protection is at the heart of the scheme. Dormant assets remain the property of their owners, who can reclaim any money owed to them in full at any time. However, only a small percentage do so, meaning that the rest of the money lies dormant. The scheme responds to the imperative to put the money to better use.

The Bill marks the completion of a five-year review in collaboration with industry leaders, including an independent commission and a public consultation. The scheme’s success is down in no small part to the commitment and drive of the banks and building societies that have led the charge on unlocking dormant assets for the public good. However, it is only right that the scheme continues to grow and evolve.

Currently, only assets from dormant bank or building society accounts are eligible to be transferred into the dormant assets scheme. The Bill will enable Reclaim Fund Ltd, the scheme’s administrator, to accept a broader range of asset classes in the sectors of insurance and pensions, investment and wealth management, and securities. Of course, there could be even more dormant assets to unlock in future. The Bill will therefore introduce a new power to provide the flexibility to expand the scheme through regulations.

I stress that the four core principles that underpin the scheme—voluntary participation, reunification first, full restitution and the additionality principle—will remain unchanged by the Bill. The Bill will require the Secretary of State to

“carry out periodic reviews of…the operation of the dormant assets scheme and…any use made of the powers”

to extend the scheme.

[Jim Shannon (Strangford) (DUP)]

There are many worthwhile projects that local communities would like to bring forward. How can they feel that they are part of this project and gain advantage from dormant bank accounts?

[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.

Dormant Assets Bill [Lords]

Jim Shannon Excerpts

Report stage
Monday 31st January 2022 Commons Chamber

[Danny Kruger (Devizes) (Con)]

I congratulate the Government on bringing forward the Bill. I recognise that, as the hon. Member for Pontypridd (Alex Davies-Jones) said, the release of dormant assets started with Labour and has been a cross-party achievement. My thanks, congratulations and appreciation also go to the financial institutions that have made the money available.

I am pleased with the Government’s proposals, including the consultation on the potential introduction of a community wealth fund. My congratulations and appreciation to the Minister for including that as a possibility, and to my hon. Friend the Member for Sedgefield (Paul Howell) and the right hon. Member for Kingston upon Hull North (Dame Diana Johnson) for their work in bringing that idea forward.

There are other great ideas—we could abolish personal debt by capitalising credit unions with this money or distribute it direct to community foundations in our constituencies—but I think that the community wealth fund is the best idea. I hope that we will see the money going into civil society and social infrastructure and into supporting the great levelling-up agenda to which the Government are committed. This is a tremendous Bill, and I very much support what the Government are doing.

[Jim Shannon (Strangford) (DUP)]

It is always a pleasure to speak in these debates. I thank the Government and the Minister for all they have done to make this Bill happen. Clauses 12 and 29, to which the Minister’s amendments refer, indicate things that the Democratic Unionist party wish to see, and I let him know that our party will support the Government tonight. However, I now wish to speak to new clause 1.

I agree that there must be further provision for dormant assets. Why not make good use of funds that would ultimately lie dormant unless further action was taken? The Bill aims to expand the current criteria, which will come with some great benefits, so it is great to speak on an important issue such as this. I welcome the Bill and look forward to the debate’s conclusion.

The Bill’s core purpose is to extend the dormant assets scheme to other financial assets, which could generate an additional £880 million of contributions. The figures are gigantic when we think on them, and they indicate where the Bill is going and what it can achieve. The Bill has three main functions: to track dormant account owners and reunite them with their account; to allow account owners to reclaim any amount they would have been eligible for; and to allow firms to partake as a voluntary process. The Bill will expand the assets involved further, creating a more sustainable economic success rate, make it a requirement for firms to get involved, and remove further financial restrictions. It is a win-win for the Government and for the Minister in particular.

The dormant assets scheme currently supports and boosts, by some £800 million, innovative, long-term programmes that aim to address some of the most pressing social and environmental issues. As I said, its expansion through the Bill will unlock an additional £880 million. It is stated that the Bill’s benefits will be felt across the whole of the United Kingdom of Great Britain and Northern Ireland. I for one would like reassurances from the Minister that it will extend to Northern Ireland and that we will benefit as well. The potential for benefit in the UK mainland is great, but we also want to see it, if we can, in Northern Ireland.

Thus far, the scheme has benefited many foundations. The Youth Futures Foundation, which has undertaken significant work to tackle youth unemployment, got some £90 million, and Big Society Capital got over £400 million to tackle homelessness. These are great projects. The Bill makes money available to address social issues; how could anyone not say that that is great?

Also at the heart of this scheme is securing protections for those who own any of the financial assets involved. Dormant assets remain the property of their owners, who can reclaim any money owed to them in full at any time. In Northern Ireland, the Dormant Accounts Fund NI works to support the voluntary, community and social enterprise sector, and we can see the benefits immediately. In Northern Ireland more than 44,000 staff are employed in the sector, which accounts for 6% of the total Northern Ireland workforce. I would encourage all organisations to contact the National Lottery Community Fund to take advantage of the wonderful scheme that Northern Ireland has to offer.

I thank Members who have already contributed, and those who will contribute later, to a debate that has made clear the potential for a great economic impact following this expansion. I want to ensure that the devolved institutions can take advantage of this scheme as well, and that the funds generated in England are greater than those generated in Scotland and Northern Ireland. There must also be further engagement with local communities and smaller organisations to ensure that they are not left behind.

I acknowledge the benefits that the Bill has introduced so far, and I shall welcome further discussion and expansion to ensure that financial assets are not wasted and the money is put to good use. We have seen what the scheme can do; it can do more.