Skip to main content

Commons Chamber

Volume 482: debated on Monday 3 November 2008

House of Commons

Monday 3 November 2008

The House met at half-past Two o’clock

Prayers

[Mr. Speaker in the Chair]

Oral Answers to Questions

Defence

The Secretary of State was asked—

Armed Forces Morale

We are removing disadvantage from service life and enhancing educational opportunity through the service personnel Command Paper. We have encouraged understanding and appreciation of our armed forces by commissioning the national recognition study. We have implemented above average pay increases, particularly for lower ranks, and vastly improved the operational welfare package. We have massively improved equipment and will continue to do so—for example, by investing £680 million in new protected vehicles, as announced by the Prime Minister last Wednesday.

I thank the Minister for that reply, which goes some way to addressing the concerns, but will he explain the effect on the morale of our troops when the Government can find money for new nuclear warheads for a new tranche of the Eurofighter and yet have consistently failed to provide the troops with the equipment that they need for the task that they face? Will he now undertake to ensure that they are provided with the armoured cars, armoured equipment, helicopters and everything else that they need to do the job that they are being asked to do on the ground?

There has been a 60 per cent. uplift in helicopter numbers in Afghanistan in the recent past, and the right hon. Gentleman must accept that we have to provide not only for the current threat but for the many eventualities that will face our country. We must have a balanced defence policy, and the kind of fighting that our people are doing in Afghanistan and Iraq is not necessarily the only threat that they might face in the near future.

I welcome the Minister’s comments on improving conditions for our armed forces, but what assessment has he made of the impact of that on recruitment?

Recruitment has been challenging in some of the pinch-point areas, as my hon. Friend knows, but, generally speaking, it is holding up, and there have recently been signs that it has improved, as was reported at the weekend in the national newspapers.

Last year, my old battalion had to patrol in Snatch vehicles, and it has been told that when it goes back again in the spring of next year, it will have to continue patrolling in Snatch vehicles. It refers to them as coffins. Will the Minister comment on the effect that that will have on morale, please?

The hon. Gentleman repeatedly adds his weight to the call for Snatch to be removed from operational theatres, but we are advised that commanders need a range of vehicles, that Mastiff and vehicles like it cannot do every job that they are called upon to do, and that Snatch is therefore still required. We are now procuring Snatch Vixen, which will be a higher-powered version, able to carry more armour—but the threat will change, and we can rest assured that that vehicle will be overpowered by some of the new explosives, some of the new formed charges, that our people will face in the future. And you can bet your life that some hon. Members will then say that the new Snatch Vixen should not be deployed in theatre. We will never be able to remove the risk entirely from operational theatre.

One way to raise the morale of our troops is to help them to realise how much the work that they do is appreciated in their local towns and communities. The Regiment of Wales was given the freedom of the borough in my constituency of Bridgend, and that hugely raised the morale of the troops and of the local community. Should that not be one of the ways to demonstrate that we are keen to raise morale and to demonstrate ordinary people’s recognition of the dedication of our service people?

My hon. Friend is absolutely right. When people return from dangerous operational theatres they need to know that those back home understand what they have been through; the kind of work that they have to do and the kind of dangers that they have had to face. We have seen a huge improvement in the level of recognition and appreciation afforded to our armed forces over the last year, and I pay tribute to the Under-Secretary of State for Defence, my hon. Friend the Member for Grantham and Stamford (Mr. Davies), for his work in the national recognition study, which helped in some way to improve that situation.

What effect does it have on morale when the Under-Secretary of State for Defence, the hon. Member for Grantham and Stamford (Mr. Davies), blames the commanders for their choice of vehicle, saying:

“in retrospect, a commander chose the wrong piece of equipment, the wrong vehicle, for the particular threat that the patrol or whatever it was encountered and we had some casualties as a result”?

For the commanders on the spot, frequently those choices were certainly not available, as has been made clear by my hon. Friend the Member for Newark (Patrick Mercer). Surely it is simply unsustainable for a Minister to say these things.

My hon. Friend was trying to explain to people that a range of vehicles is needed in theatre. Hon. Friends of the hon. Member for Reigate (Mr. Blunt) often say different things from what commanders tell us about Snatch. They tell us that Snatch is needed as part of the suite of vehicles required in theatre. We have spent more than £1 billion on new vehicles already, and we will continue to spend, but commanders will still need a range of vehicles to do the various jobs required of them in our operational theatres.

I am acutely aware that a significant amount of time elapses between a requirement being made known by operational forces on the ground, and the development of the engineering capacity needed to produce the required improvements. What can my right hon. Friend the Minister do to ensure that the lead time between vehicle aspirations and vehicle delivery to meet operational demand, which is unique in every context, is reduced?

My hon. Friend is absolutely right. It is vital that we react to the changing threats as quickly as we can. With regard to Mastiff, we managed to bring in that vehicle, from first announcement to first showing in theatre, in only 23 weeks. We need to try to match that in the future and on every occasion.

Does the Minister accept that saving the lives of service personnel is a very good way of enhancing their morale? Will he therefore see what he can do to bring forward into operation the latest high technology Nimrod MRA4, the spy in the sky, which could give our armed services in both Iraq and, particularly, Afghanistan notice of when they are likely to encounter the enemy?

The current Nimrod fulfils that role, as the hon. Gentleman knows. It is a life-saving platform, operating in Afghanistan and doing exactly as he proposes. We are working with BAE Systems to try to bring forward the Nimrod MRA4.

When a loyal and committed officer resigns and cites a specific reason, he should be treated with the utmost seriousness. When, instead, the Under-Secretary of State for Defence, the hon. Member for Grantham and Stamford (Mr. Davies) says that it was

“such a travesty of reality that it is actually quite difficult to take this at first face value,”

it is not only damaging to morale but, frankly, a disgrace.

And, when the Under-Secretary said that there were

“a couple of odd things about this resignation”,

what exactly did he mean, and when will he apologise?

We do take the complaint seriously; we do take the resignation seriously. We do not accept that we are in any way cavalier with our people’s safety. We put that at the absolute top of our priorities, and all of us in the ministerial team will continue to do so.

Still no apology—yet the Under-Secretary’s offence went beyond damaging morale and his own arrogant dismissal of a loyal and committed officer. As my hon. Friend the Member for Reigate (Mr. Blunt) said, the Under-Secretary said:

“there may be occasions when in retrospect, a commander chose the wrong piece of equipment”.

Yet is it not increasingly clear that, on the occasion in question, commanders had no choice but to use Snatch Land Rovers? How can it be that after six years and more than £10 billion in spending, we still do not have the armoured vehicles that we require? And, why did the Under-Secretary not take time to discover the facts before opening his mouth and bad-mouthing our commanders?

My hon. Friend meant no offence. He was trying to explain to people that we need a suite of vehicles in theatre. That was all he was trying to do, and he did not mean to cause any offence to anyone at all.

Iraq

2. What progress has been made in the development of Iraqi security forces; and if he will make a statement. (232048)

UK forces in southern Iraq continue to make very good progress in mentoring and training the Iraqi security forces. We have helped to train over 20,000 Iraqi troops, and the performance of both the 10th and 14th divisions of the Iraqi army is a testament to the vital contribution that UK forces have made to improving security conditions on the ground. We have also helped to train more than 22,000 members of the Iraqi police service, including some 7,800 police officers in Basra itself.

I congratulate the Secretary of State on his promotion to a vitally important role. He is, of course, full of beguiling words about the success in bringing Iraqi forces up to scratch, although it has to be said that when I was in northern Iraq a few weeks ago there was no sight of them: it was all down to the militia. A lot of the success in dealing with violence in Baghdad is down to former Sunni militias.

What does the Secretary of State have to say about the interview given by Mr. al-Maliki, the Iraqi Prime Minister, to The Times on 13 October? He was very critical of what he claimed was our secret deal with the Mahdi army, a deal that I am sure the Secretary of State will deny. Mr. al-Maliki also said that the Iraqi forces are now ready to take—

I am grateful to the hon. Member for Gainsborough (Mr. Leigh) for his kind and welcoming words.

On the substance of his points about security conditions on the ground, I should say that it would be wrong to underestimate the contribution that British forces have made to improving the capabilities of Iraqi security forces. When I was in Basra last week, my protection and security were provided by the Iraqi army, militia and police themselves, and that is a significant step forward.

The hon. Gentleman is right to say that there are parts of Iraq in which security conditions are not as good as in the south. However, the whole point and purpose of our mission in Iraq is now to improve the capabilities of the Iraqi security forces. The hon. Gentleman also mentioned the Iraqi Prime Minister, who made it clear to me how much he welcomed the role of UK forces in the south of Iraq. He wanted to see that role be completed in the near future, and it will be. There is no question at all of any secret deal with the special forces or special groups in Basra. Everything that we did was done in full knowledge and sight of our coalition partners and the Iraqi Government.

I welcomed the Secretary of State on Thursday, so I shall not do so again. When the Defence Committee visited HMS Chatham and Umm Qasr a few months ago, we saw the fantastic job that the Royal Navy was doing in protecting the oil, the resource that will help bring Iraq out of this dark period of its history. I recommend that the Secretary of State visit the Royal Navy on his next visit. Will he make an assessment of what the Iraqi navy will do in the coming months to boost its own capabilities?

I am grateful to the right hon. Gentleman for his comments. In 2003, the Iraqi navy just did not exist. Clearly, it has an important role to play in securing vital Iraqi interests in the Gulf, particularly in respect of the oil industry and its platforms there. The Iraqis now have security responsibility for one of the two principal oil installations in the Gulf, and that is a sign of progress. The Royal Navy is doing a brilliant job in Umm Qasr, and when I am next in Iraq I hope to see the Royal Navy team there in person.

Mentoring and support for the Iraqi navy will be one of the enduring roles for British security forces in future. I hope and remain confident that the first months of next year will see a significant change in our mission in Iraq, and that will be welcomed on both sides of the House. However, it would be wrong to assume from that that UK forces will have no further role to play in supporting our Iraqi allies. They certainly will.

I remind the Secretary of State of how incredibly impressed the Defence Committee was when we saw the mentoring of the Iraqi armed forces in Basra. Although it is inevitable that we will draw down our sizeable footprint there in the months ahead, will the Secretary of State explain what plans there are to maintain a very strong relationship with the Iraqi armed forces? I am thinking particularly of the higher level, at which we saw strong personal relationships that would be very good for the United Kingdom’s influence in the longer term.

When I met Mr. Abd al-Qadir, the Iraqi defence Minister, in Baghdad, those were some of the issues that we discussed. He and I want an enduring, sustainable and normalised defence relationship between the UK and Iraq. There are two particular issues on which we can make a significant and enduring contribution. First, we will support the training of the Iraqi officer corps, and we look to formalise those arrangements between us.

Secondly, in the context of what I said in response to the remarks of the Defence Committee Chairman, the right hon. Member for North-East Hampshire (Mr. Arbuthnot), I repeat that we want to continue to mentor and support the Iraqi navy. The UK has a unique contribution to make in those two areas, and I look forward to formalising those understandings with the Iraqi Government in the near future.

Afghanistan (Royal Navy)

The size of the force committed to Operation Herrick 9 is about 8,000. Since October, 3 Commando Brigade has formed the core of the Helmand taskforce. As a result, more than 2,000 of that force are currently drawn from the Royal Navy itself. The Royal Navy, and all our forces in Helmand, continue to perform a vital role in safeguarding essential UK interests. We can all be rightly proud of the work that they do.

This is a very significant land deployment of maritime forces. Does my right hon. Friend agree that its purpose is not some sort of discretionary war, as some would imply, but in our vital interests?

I agree absolutely with my hon. Friend. The operations in which we are involved in Afghanistan are vital to UK strategic security interests: that is why our campaign to tackle the Taliban and to deal with al-Qaeda in Afghanistan must succeed. I pay tribute not only to the forces currently deployed in Afghanistan, who are doing a brilliant job—as I have seen myself at first hand—but to all members of the armed forces who have served there since 2003. We can be rightly proud of the contribution that the men and women who wear the Queen’s uniform have discharged in Afghanistan.

When these brave men and women come back from serving in their deployment in and off Afghanistan, when will they be told whether their frigate’s base port will be Portsmouth or Plymouth? The Secretary of State has made that decision; when will he tell the rest of us?

We hope to make an announcement on that in the very near future. The important thing to come out of the review of the royal naval bases is that we are maintaining and operating three, and I am sure that the hon. Gentleman would welcome that.

Nobody could criticise the naval personnel for the job that they do in Afghanistan, where they are performing magnificently. Sadly, however, we have capital ships afloat that are sailing with crews that are somewhat undermanned in places. That is a real problem. Is it not possible to progress more rapidly the reduction of forces in Iraq, so that we can replace naval personnel in Afghanistan in order to release them for service afloat?

The speed at which we can draw down forces from Iraq will depend, first, on security conditions on the ground and, secondly, on the advice that we receive from our military commanders. As I said before the Select Committees on Foreign Affairs and on Defence last week, we remain optimistic that we will be able to make a very significant change in our mission in the early part of next year. I cannot be more specific than that, for obvious reasons—I do not want to say or do anything that would compromise the safety of our forces on the ground there. However, my hon. Friend, along with every Member of this House, can look forward to significant announcements in the near future.

May I say to the right hon. Gentleman that it is very important that whenever Royal Navy personnel are deployed they are deployed in appropriately armoured vehicles? The Minister for the Armed Forces really should avoid suggesting that serious casualties have been caused by officers on the ground choosing wrong vehicles. That is inaccurate, untrue, deeply offensive to their commanders, and damaging to morale.

I think that my right hon. Friend the Minister made our position clear in relation to all these points. I simply re-emphasise the point that he made to the hon. Member for Woodspring (Dr. Fox), which is very important. Because of the additional resources that we have made available to support our deployments in Iraq and Afghanistan, some 1,200 new, better-protected armoured vehicles will be available to support our front-line operations. I am sure that the right hon. and learned Gentleman would want to welcome that additional procurement.

Advanced Research and Assessment Group

4. What work is being undertaken by the advanced research and assessment group at the Defence Academy of the United Kingdom; and how many of its reports have been published. (232050)

The advanced research and assessment group conducts research and analysis on a range of geo-strategic and operational issues to influence the development of defence and security capability. During the financial year 2007-08, the group published 91 papers.

The Minister knows that we all support the excellent work of ARAG at the Defence Academy of the United Kingdom. Will he ensure that that the excellent work undertaken at that establishment is better understood across Government, and that wherever possible it is shared not only with Government Departments but with the civil community—for example, through the publication of the excellent Shrivenham papers?

I thank the hon. Gentleman for that question. I know that he and other members of the Defence Committee met members of ARAG when they were at Shrivenham on 16 October, and I will pass on their thanks to the staff there. The papers that they produce are already shared across Government where appropriate, but his highlighting of the issue will give them a wider circulation.

My hon. Friend mentioned that the Defence Committee recently visited the Defence Academy, and saw its excellent facilities. However, we were concerned that those world-beating facilities could be even better used. Does my hon. Friend have any plans to extend the work being done in the Defence Academy to utilise those facilities fully?

As my hon. Friend knows, in a previous life I visited Shrivenham with him, and I pay tribute to the work done there, not just in support of UK forces, but in supporting international links and many students from a variety of nations. I am due to visit Shrivenham, and I will take back my hon. Friend’s message.

Does the hon. Gentleman agree that not only the work of the advanced research and assessment group, but that of many other groups, is extremely important in the promotion of defence diplomacy? Would he agree that that is an important part of defence policy, and one that in different days will become even more important?

I will break the habit of a lifetime and agree with the hon. Gentleman. The work conducted at Shrivenham and the diplomacy that it does on behalf of the Ministry of Defence, and UK plc in general, is very important. It is also important to ensure that its work is recognised in Government, and that its reports influence policy—and not just in the MOD.

Afghanistan

5. What estimate he has made of the area of territory in Afghanistan under the control of (a) the Afghan Government, (b) the Taliban and (c) warlords in each of the last three years. (232051)

The deployment of additional forces under NATO in 2006 in support of the Government of Afghanistan has led to a significant expansion of the area under their control. UK forces have enabled the Government of Afghanistan to expand control across eight districts in Helmand province, from Kajaki in the north to Garmsir in the south. We should remember, though, that the key to success is winning the allegiance of the Afghan people.

Order. The hon. Gentleman will withdraw that remark. No Minister would be evasive on the Floor of the House. He should be a little more temperate.

I withdraw that remark, but American intelligence tells us that after a war that has lasted longer than either of the two world wars, we are now in a position where the Taliban and the warlords control far more territory than the elected Government. More of our brave British soldiers have died in Afghanistan than were killed in the charge of the Light Brigade. Is it not true that the only way to consolidate the gains made would be to admit that a military victory is unattainable, and seek a negotiated peace settlement?

My hon. Friend and I have talked about this subject before, and I know how upset he gets at my views. Reconciliation is an important part of what is needed in Afghanistan, but we can only reconcile the reconcilable. Nobody has ever suggested that it is a purely military matter, or that there is no political part to be played in any settlement in Afghanistan, and it is plainly wrong for my hon. Friend to suggest that we think that there is.

I thank the Minister for his response, and I disassociate myself from the remarks of the hon. Member for Newport, West (Paul Flynn). Does the Minister agree that the reconstruction work that Her Majesty’s armed forces are carrying out, particularly in Helmand province, means that for the first time in 30 years, the people of that province at least have the chance of a future in a democratic society?

The hon. Gentleman is absolutely right. In February, I saw at first hand some of the work that our troops were doing in Musa Qala, and some of the thinking going into their operational planning. It was not about killing the Taliban, but about rebuilding the town and building schools—only seven weeks after the town had been taken. That is what is in the minds of our forces. At every level, they know that it is a matter of winning over the people and making progress in Afghanistan. It is not purely a matter of the military effect, although in dangerous environments that effect is absolutely vital.

I would never make such a base suggestion as that Ministers are evasive—but bewildered, they are. When I tabled a parliamentary question asking how many of the 13 districts of Helmand are controlled by NATO and the Afghan Government, the Minister’s reply referred to the “presence” of British troops. There is a world of difference between presence and having control. Which districts of Helmand are controlled by the Afghan Government and British or NATO forces, which are held and controlled by the Taliban, and which are indeterminate?

I must say to my hon. Friend that we are running a counter-insurgency operation in Afghanistan, not a straightforward war in the traditional sense. It is about winning the hearts and minds of the people, and controlling territory is only part of that. We have a significant presence the length and breadth of Helmand province. That is not to say that the Taliban are incapable of operating in those areas: they are an insurgent force, and there are no straightforward front lines.

Does the Minister of State accept that the welcome news that he announced on better armoured vehicles for protecting conventional forces are no substitute for ensuring that all our special forces have proper cross-country vehicles? Will he take the opportunity to offer the Under-Secretary of State for Defence, the hon. Member for Grantham and Stamford (Mr. Davies) the chance to apologise at the Dispatch Box to Major Morley for his remarks at the weekend?

What we must try to do—my hon. Friend the Under-Secretary was trying to say this, as I think the hon. Gentleman knows—is to provide a full suite of vehicles for our commanders in Afghanistan so that they can use the most appropriate vehicle at the most appropriate time for the job in hand. My hon. Friend was trying to explain that, and we will do that—more so with the new vehicles that we plan to provide for Afghanistan.

The Minister referred to winning the hearts and minds of the people of Afghanistan. Afghanistan is more than Helmand province, and there has been increased control by the Taliban in the past six months. Will my right hon. Friend therefore work a bit more closely with troops from the Gulf states, because it seems clear that working with only the US and NATO is not sufficient to win the hearts of the people of Afghanistan?

There are contributions from non-NATO members—my hon. Friend may know that the United Arab Emirates provides some support for our forces in Afghanistan. Of course, we welcome any assistance that people are prepared to provide. I do not accept my hon. Friend’s assertion that the Taliban are developing increased control over Afghanistan as a whole.

How secure does the Minister believe that the area around the Kajaki dam is, and will be when the third turbine produces electricity? It is one thing to produce electricity and another to ensure its safe transmission over 150 miles through rough terrain, where it would be open to attack from terrorists and terrorist organisations. Are we making progress on that?

I think that the hon. Lady would agree that the operation to get the new turbine up to Kajaki was a fantastic achievement by our troops, but the Taliban know how important it is to stifle development and prevent us from being able to provide the improvements that ordinary Afghans want. It is therefore vital that, having got the new turbines to Kajaki, we protect the capability and the ability to supply electricity to Helmand that the new turbines will give us in generation capacity.

Rehabilitation

Service personnel requiring rehabilitation may be referred either to the defence medical rehabilitation centre at Headley Court, or, for personnel with less serious musculo-skeletal injuries, to one of 15 regional rehabilitation units in the UK and Germany.

We in Staffordshire are very pleased to be hosting the new headquarters for the entire defence medical training service. As more than 1,000 doctors, nurses and other staff make their homes in Staffordshire, can we start as we mean to go on and train them all in looking after and rehabilitating our injured service personnel holistically, whether through medical services, therapies or reablement?

I thank my hon. Friend for his question and thank his constituents who will be involved in supporting our injured servicemen and women. The Government are investing in the scheme, and we must ensure that people are looked after both when they are in service and once they leave.

On the broad issue of rehabilitation, the Minister will know that I have been raising the question of ex-service personnel currently behind bars, who constitute 10 per cent. of the entire prison population, or more than 8,500 people. Having raised the issue with the Prime Minister a fortnight ago and in debate a week before that, may I ask the Minister what progress is being made on precisely quantifying the problem, so that we can look into precisely the answers that we require?

I thank the hon. Gentleman for his interest in the subject. The figure of 10 per cent. is not correct, but the Department is conducting a study with the Ministry of Justice to quantify it. I know that he takes a keen interest in the subject and cares about it deeply, so if he would like to contact my office for a meeting, I should be more than willing to talk to him about it.

Will my hon. Friend give me an assurance that he is satisfied that when injured personnel leave such establishments as Headley Court and return home, their homes have been adapted, so that they fit easily and readily back into their home environment, and that we are prepared to step in where necessary and do the job before they return home, so that it is not left to the local authority?

The Secretary of State and I have visited Headley Court in the past few weeks, where there are first-rate teams of welfare officers, whose job it is to ensure that that transition is as smooth as possible. My hon. Friend will also be aware of the Command Paper published earlier this year, which raised the issue of adaptation and ensuring that servicemen and women who require adaptations at home following injuries are made a priority.

Units returning from theatre report that up to one third of their manpower have defects in hearing acuity or tinnitus, much of which is severely disabling, leading to personal hardship, significant force attrition and compensation claims running into millions. British troops have to put up with poorer hearing protection and rehabilitation than the Americans, whose Government have been far more proactive in that regard. Is there any risk of the Minister taking the issue seriously?

I will ignore the churlish comments at the end of the hon. Gentleman’s question. I had a meeting last week with the Surgeon General and General Baxter, the head of Defence Medical Services, about that exact subject. Since 2007, additional double-ended plug devices have been given to all those in operations in Iraq and Afghanistan. The Surgeon General has been proactive in setting up a group in the Ministry of Defence to look specifically into hearing loss. If the hon. Gentleman had done a bit of research, he might also have been aware of Project PECOC, which will introduce new devices from as early as April next year that not only stop hearing damage, but allow individuals to hear commands.

Russia

7. What assessment he has made of the military implications for NATO of recent developments in Russian security policy. (232053)

NATO Defence Ministers have met twice since the conflict between Russia and Georgia to consider the evolving security challenges facing the alliance. NATO will continue to provide collective defence for the territory of its allies. The flexible military capabilities and structure that NATO is pursuing are the right ones to enable it to respond to any security threats, wherever they arise.

How does the Secretary of State rank Russia in terms of the threat that it poses to British national security?

The Russian action in Georgia was totally unacceptable and disproportionate, so there cannot be any question of relations as normal as long as the Russians fail to implement the understandings reached in August and September, which they have not yet done. NATO continues to conduct effective and proper contingency planning to deal with a range of different security scenarios, but we have also made it very clear that Ukraine and Georgia will become members of NATO. NATO presents no security threat to the Russian Federation; it is a purely defensive alliance. Who is, and who is not, a member of NATO is a matter for NATO members and no one else.

In view of Russia’s massive rearmament programme and its naked invasion of Georgia, will the Secretary of State assure the House that Britain retains the ability to conduct key tasks such as anti-submarine warfare and Arctic warfare, and that other NATO members are also being pressed to maintain these skills? Will he also assure us that those skills have not been neglected in favour of meeting the immediate requirements of Afghanistan and Iraq?

I can absolutely give the hon. Gentleman, and the House, the assurance that he is seeking.

Royal Air Force

The Government’s plans to equip the RAF with Typhoon and joint combat aircraft will give it the most powerful strike capability in its history.

Will the Minister assure the House that the Government are committed to, and will order, the joint strike fighter?

As the hon. Member knows, the joint strike fighter is in its development phase, and we will need to take the decision next year about purchasing the first two development aircraft. We have to take this stage by stage, and I shall be going to America to talk to the major manufacturer fairly shortly. This programme is essential to our plans, and we remain absolutely committed to it.

On the subject of procurement, the Government promised in the last strategic defence review to purchase 10 Astute class submarines. By 2004, they had reduced the number to eight, and I do not know what the figure is today. What has changed—

Order. The hon. Gentleman is asking about the Navy. As a former Territorial in the Army, I know that there is a difference between the RAF and the Navy. I call Mr. David Taylor.

Will my hon. Friend the Minister comment on the training implications of the future strike capability of the RAF? In particular, does he think that the Metrix consortium’s contracts to train military personnel over the next 30 years, which have increased in cost by £1 billion, are adequate for the purpose? There seems to be a cabal of private companies locking the taxpayer and the military into a private finance initiative scheme that is costing much more money over the years for a far inferior service to the RAF and other forces.

I can assure my hon. Friend that the RAF is clear that the arrangements that we are making for training are indeed adequate for the purpose, to use his phrase.

Strategic Defence Review

Does the Minister accept that there have been significant changes to the threats facing this country since 1998 and 2002? What are the threats, and what is he doing about meeting them?

The strategic defence review—the new chapter—and the national security strategy revalidated the assessment of the challenges that we face, and said that the UK needed to maintain expeditionary, balanced and flexible armed forces. We continue to work against that baseline; nothing has changed fundamentally with regard to the threat or to the structure of the forces needed to meet it.

What has changed, particularly since the strategic defence review in 1998, is that there has been a massive increase in operational commitments in Iraq and Afghanistan. Given that fact, we are still spending the same percentage of gross domestic product now as we were 10 years ago, even if we include the Treasury reserve commitment to the campaigns. Is it not unavoidable for any Government to have to assess whether to spend more to meet the extra commitments, whether to reduce the commitments, or whether to do something in between? Any Government would need a strategic defence review. Why are this Government not going to hold one?

The hon. Gentleman and his hon. Friends—and, indeed, Liberal Democrat Members—are very quick to say that they want a strategic defence review. What they will not say—and repeatedly will not say—is whether they will spend more, less or the same on defence. In my opinion, Conservative Members’ call for a strategic defence review is a meaningless alternative for a policy. They need to tell us and to be straight with us about whether they would spend more on defence. Their leader has said that he will not, and he will not even commit to our current levels of spending.

Defence Training Review Programme

10. How much his Department has spent on the defence training review programme to date; and if he will make a statement. (232056)

Expenditure to date on the defence training review programme is £34.6 million. That includes the expenditure costs of both package 1 and package 2 of the training review programme.

The Minister will know that the defence training review is the largest private finance initiative in British history. It was originally estimated that the cost would be £11 billion, but in the last six months it has risen to £12 billion. Will the Minister confirm whether this programme will go ahead and whether Treasury Ministers have been consulted about the escalating costs?

The hon. Gentleman is right that the financial situation has led to cost growth in the programme, but we have worked with Metrix to see how to minimise the costs. I know that this will disappoint the hon. Gentleman greatly because of his constituency interest, but I have to say that the programme is still affordable and remains more affordable than the in-house alternative, so our plans are to go ahead with the programme on the basis of package 1.

Topical Questions

My responsibilities as Secretary of State are to make and execute defence policy, to provide our armed forces with the capabilities they need to achieve success in current and future operations and, finally, to ensure that the service of all those who wear or have worn the Queen’s uniform is properly honoured and recognised.

Last week’s announcement of £700 million of spending on vehicles and other forms of protection for our troops in Afghanistan was very welcome. On previous occasions when hon. Members, including me, have asked about the use of Snatch Land Rovers in Afghanistan, we have been told of previous procurements of alternative vehicles. Will my right hon. Friend confirm that last week’s announcement is additional and represents procurement over and above what we have been told about in the past?

Yes, I can give my hon. Friend that assurance. I can also tell him that as and when the security threat changes in Afghanistan or Iraq, we will not hesitate to meet the requests put to us by our operational commanders for any change or upgrading of the equipment available for them. Our first and principal responsibility is for the health, safety and well-being of our troops in the front line. Nothing that we do will ever get in the way of, or compromise, that fundamental objective.

T2. Does the Secretary of State understand my concern, as chairman of the all-party group on deafness and a trustee of the Royal National Institute for Deaf People, about the increasing numbers of our servicemen coming back from active service with serious hearing impairment and damage? Will he accept the invitation of the RNID to work together to prevent this damage through better protection methods and to ensure that those who suffer damage have adequate support and compensation? Will he ensure that Ministers and his officials do not implausibly attribute the deafness to causes unrelated to active service when, in so many cases, it clearly is caused by that service? (232073)

The Under-Secretary, my hon. Friend the Member for North Durham (Mr. Jones), gave a full and comprehensive answer to an earlier question. We take this issue very seriously indeed, and we stand ready to work with the Royal National Institute for Deaf People, the service charities and others to see whether there are ways of continuing to improve the protection we give our forces in Afghanistan and Iraq. We have made significant upgrades in the available equipment, but we stand ready at all times and in all places to work with those who share our concern to provide the maximum possible protection for our forces. We will always do that.

Will the Secretary of State give us a clear assurance that the phenomenal amounts of money being spent on AWE Aldermaston are not being used for the development of a new generation of nuclear weapons that has not yet been debated or decided in the House?

No, there is no question of that. Decisions will be made in the House at the right time about all those matters. It is, however, vital for the long-term strategic security of the United Kingdom that we maintain our minimum nuclear deterrent. We are absolutely committed to doing so, and that will not change.

T3. Let me ask what is by no means a hostile question and declare a partial interest, in that a close family member is involved. A significant number of people have been discharged from our armed forces because of mental illness over the past seven years. What are Ministers doing to ensure that that number is addressed and reduced? (232074)

My hon. Friend the Member for North Durham, the Under-Secretary, has principal responsibility for that issue. Perhaps he and the hon. Gentleman could meet to discuss it.

We invest significant resources in ensuring the well-being of members of the armed forces who have to be medically discharged after active service. It is a responsibility that we regard as important and continuing: it does not end simply because those men and women have left the service of Queen and country. We will continue to ensure that mental health services are as good as they can be. I am sure that my hon. Friend the Under-Secretary will correct me if I am wrong, but I believe that we will be making an announcement in the very near future about how those services can be improved.

T4. At a recent open day at Lympstone, the parents of young men who are shortly to emerge as fully fledged Royal Marines were advised by a senior officer to purchase a piece of equipment—body armour—of a better, more suitable specification than what is currently issued. If senior officers consider equipment important enough for parents to buy it for their sons, should not quartermasters be in a position to issue it? In answering that question, will the Secretary of State ensure that no aspersions are cast on the senior officer involved? (232075)

No, I will not cast any aspersions on the senior officer, but I hope that the hon. Gentleman will give me more information about the circumstances that he has described.

We have invested significant resources in improving the body armour available to our forces in both Iraq and Afghanistan, and I think that the Osprey body kit is pretty good stuff. It is heavy, which of course carries a risk for those who have to wear it, but I do not consider that risk to be any greater than the risk of being shot at.

If the hon. Gentleman has any specific concerns I shall be happy to explore them with him in more detail, but I am not aware of any advice that has come to Ministers suggesting that the Osprey is anything other than totally fit for purpose

I recently had the good fortune to speak to some defence workers at Rosyth naval base in Fife. They spoke very warmly of their former colleague and Member of Parliament, John MacDougall. However, they are genuinely concerned about their long-term security of employment. Can my right hon. Friend assure them and the House that it will be safeguarded?

I can give my hon. Friend that assurance. All of us who knew and worked with John MacDougall know what a fine Member of Parliament he was, and what a great friend he was of Scotland and jobs at Rosyth. My personal view, for what it is worth, is that defence jobs in Scotland would be directly at risk if the Scottish National party were ever to form an Administration with responsibility for those matters. We must not let that happen, and the best way in which we can avoid it is by voting Labour on Thursday.

Will the Ministry of Defence follow the example of the United States armed forces, who now make laser surgery available free of charge to correct the sight defects of all troops going out to the front line? Does he accept not only that wearing spectacles is clearly far from ideal in combat conditions, but that contact lenses can be very uncomfortable in the heat and, particularly, dust of Iraq and Afghanistan, which often gives rise to time off because of eye inflammations and infections? Is he aware that the Metropolitan police are now providing such surgery for key personnel, including bomb disposal experts, who understandably find it quite useful to be able to see properly? Will he establish a central budget in the Ministry, so that this simple and effective surgery can be provided for all our armed services before they go out to the front line?

I cannot give the hon. Gentleman a commitment from the Dispatch Box to do that today, but I can give him a commitment that I will look into this issue. In all such areas, however, we take advice from the Surgeon General and the appropriate authorities within the armed forces, and that is the basis on which we make decisions.

A part of the protected mobility package in which my right hon. Friend announced investment last week is the Jackal vehicle, 200 of which have already been contracted for, and which are made in Devonport dockyard. Will my right hon. Friend explain the capability that the Jackal adds to those available to commanders in the field, in terms of the choices that they can make?

I pay tribute, via my hon. Friend, to the good work done at Devonport. We are delighted that we will be taking delivery of these new vehicles. The great point about the Jackal is that it is both fast and very mobile and also very heavily armoured, so in some respects it offers the best of all possible worlds. With the announcement made last week that we will provide a further 700 protected and armoured vehicles for Afghanistan, added to the Mastiffs and the other new armoured vehicles that are already in theatre, there will be 1,200 armoured and protected vehicles in theatre, where 8,000 troops are currently deployed.

T5. In June, three members of my former regiment were killed in a Snatch Land Rover in Afghanistan. Their squadron commander has now resigned, citing their deaths as one reason for his resignation, but he finds himself blamed for them by a Minister of the Crown. Apart from the very real pain that any commander feels at the death of one of his troops, no special forces would ever choose a Land Rover without proper cross-country capability for operations. These were, however, the only vehicles available. Will the Secretary of State disassociate himself from the remarks of his—very junior—Minister, and apologise not only to Major Morley, but to the families of the dead? The father of one said today— (232076)

The hon. Gentleman obviously does not know that this morning outside the House I expressed my regrets to the father of one of our gallant soldiers who has died, and who apparently said via the media—he did not say this directly to me—that he had been upset by my remarks. I apologised unreservedly to him and expressed my deep regrets. Obviously, any offence caused was entirely inadvertent; I hope the hon. Gentleman recognises that. If I were to have some reason to suppose that operational commanders have been offended by any remarks I have made, I would also apologise very clearly and directly to them. I take it the hon. Gentleman did not hear the broadcast in question, but if he were to do me the courtesy of reading the full transcript—

Well, in that case the hon. Gentleman will have seen that a lot of my argument was designed to explain that it was quite wrong and totally impossible to blame retrospectively, with hindsight, commanding officers for decisions that had been taken and where eventually there had been fatalities, as, unfortunately, happens in warfare. He will have seen from that transcript that some—deservedly—laudatory remarks were made about the quality of our commanding officers and, of course, of our troops as a whole.

T6. You, Mr. Speaker, will know that there is a protocol that Ministers never blame civil servants, and there is a similar protocol that Ministry of Defence Ministers never blame commanders in the field. Whatever the weasel words we have just heard, will the Secretary of State— (232077)

Order. Temperate language is so important these days, and the hon. Gentleman has been in the House long enough to know that that was out of order.

T8. What assessment has the Secretary of State made of the likelihood of British troops being sent to the Congo as part of the European rapid response force, and what are the implications of that for force overstretch? (232079)

I can tell the hon. Gentleman that we have received no such request to deploy any UK forces to the Congo, but there are two points that I would want to make to him. First, the situation there requires a reopening of political dialogue between the combatant parties; it is important that that is done quickly, and my right hon. Friend the Foreign Secretary has been in the region to try to encourage that. Secondly, there are 18,000 UN forces on the ground in the Congo now, and they can make a difference much more quickly than any deployed force from Europe or anywhere else could, so the priority should be to make sure that UN forces are deployed in such a way as both to protect the civilian population and to advance the humanitarian cause, as is so desperately needed there.

May I return to the Metrix training contract, in the light of the unsatisfactory answer given by the Under-Secretary of State for Defence, my hon. Friend the Member for Grantham and Stamford (Mr. Davies)—our new hon. Friend—and, indeed, the answer given to the hon. Member for The Wrekin (Mark Pritchard)? The contract costs are more than £1 million a day and are soaring into the stratosphere. Will the Minister say whether or not the following quote was well sourced? The defence training review executive board investigated “major affordability issues” that could not be disclosed to the project board as they were “too sensitive”. What is going wrong with the contract?

The costs to which my hon. Friend refers cover the provision of the defence training package over a 30-year programme, so he should not be surprised if some of the figures are high. I am sorry that he found what I said to the hon. Member for The Wrekin (Mark Pritchard) unsatisfactory, but we have re-examined affordability and remain convinced that the package is the best option going forward and that it is better than the in-house alternative in providing the quality of training that we need at a reasonable price—a good price for the taxpayer.

T9. As the ministerial head of the armed forces, the Secretary of State will appreciate the importance of loyalty, as will all his fellow Ministers. On that basis, will he advise those Ministers to use temperate language when referring to our commanders in the field and the great things that they, and those who fight for them and for this country, do? (232080)

All Defence Ministers will use temperate language to describe all these matters. [Interruption.] The Under-Secretary, my hon. Friend the Member for Grantham and Stamford (Mr. Davies), has dealt with this matter very clearly. In this place, it is right and proper that we all give praise where praise is due, and nowhere is that more appropriate, right now, than in relation to Iraq and Afghanistan. That is the collective view of Ministers, and I strongly sense that it is the collective view of the House.

Points of Order

On a point of order, Mr. Speaker. You will be aware that during last Thursday’s business questions a number of hon. Members, myself included, raised the issue of the horror that is going on in the eastern part of the Democratic Republic of the Congo. I understand that the Foreign Secretary is returning from his welcome visit there. Is there anything that we can do to ensure that he makes a statement, if possible, tomorrow, on whatever support can be given to meet the humanitarian needs of the people of the eastern DRC during this crisis?

I say to the hon. Gentleman that that is not a matter for the Chair. It is up to Ministers to decide whether or not they make a statement, but I am sure that his concerns are on the record.

On a point of order, Mr. Speaker. May I ask you, as the defender of the rights of Back Benchers, to examine answers to parliamentary questions? We are well used to the fact that in answers to written questions we do not always receive 100 per cent. of the information requested. The attraction of oral questions, and their great advantage, is that we can be critical of the answers that we receive, particularly when they contain certain omissions. May I therefore ask you to examine the replies given to the questions put by my hon. Friend the Member for Thurrock (Andrew Mackinlay) and me this afternoon? We sought factual advice on a matter of the gravest importance, but the responses that came from the Front Bench team did not answer our questions. I do not know what description one could apply to those answers, except to say that they were evasive. I had to withdraw my remark, but are we to believe that the word “evasive” is now unparliamentary language?

Unparliamentary language is a bit strong; I am saying that the hon. Gentleman should not direct that term at Ministers, as he knows. What was the term that the hon. Member for Thurrock (Andrew Mackinlay) used? Did he say “confused”?

If the hon. Gentleman said that the Minister was bewildered, I would go for that one. For me to examine Ministers’ answers, be they written or oral, would be to add too much to the job description of the Speaker. As a trade unionist, hon. Members would not want me to get any more work than I am doing at the moment, but that is what the hon. Member for Newport, West (Paul Flynn) is telling me to do.

On a point of order, Mr. Speaker, I and several other Members received letters inviting us to join the cross-party group on balanced migration, but when I applied, I was told by the secretary that I was not allowed to join and that only Back-Bench Members, not including Select Committee Chairmen, could be members of all-party groups. Is that the case? My understanding is that as long as a Member is not a Government member, including a Whip, they cannot be restricted from joining all-party groups.

It is up to the groups to sort out such matters and to decide whether they wish the right hon. Gentleman to be a member, so I shall not interfere in the matter. Rules have been laid down on the number of Members in an all-party group and on whether there should be a balance of officers, which clearly there should.

Orders of the Day

Dormant Bank and Building Society Accounts Bill [Lords]

As amended in the Public Bill Committee, considered.

New Clause 3

Review and report to Parliament

‘(1) The Treasury shall carry out a review of—

(a) the operation of this Part, and

(b) the effectiveness of the efforts made by financial institutions to secure that those entitled to money in inactive accounts are made aware of the fact.

(2) In reviewing the operation of this Part the Treasury shall in particular consider—

(a) how many banks and building societies have transferred balances as mentioned in section 1(1) or 2(1);

(b) how much money has been transferred and how promptly;

(c) how effective have been the arrangements for meeting claims made by virtue of section 1(2)(b) or 2(2)(b).

But the review shall not consider the activities of a reclaim fund in so far as they are regulated activities for the purposes of the Financial Services and Markets Act 2000 (c. 8).

(3) The Treasury shall make arrangements to enable anyone with an interest in any aspect of the review to make representations, and shall consider all representations received.

(4) The Treasury shall set out the results and conclusions of the review in a report and lay it before Parliament.

(5) The report must be laid within three years from the date when a reclaim fund is first authorised.’.—[Ian Pearson.]

Brought up, and read the First time.

With this it will be convenient to discuss new clause 2—Report to Parliament—

‘(1) The Treasury shall keep the operation of the dormant accounts arrangements under review.

(2) From time to time the Treasury shall prepare reports to each House of Parliament on the operation of the dormant accounts arrangements.

(3) Within three years of the commencement of this Act, the Treasury shall prepare its first report.

(4) Each report shall include—

(a) a review of the operation, effectiveness and scope of the dormant accounts arrangements; and

(b) any other matters that the Treasury considers to be relevant to the operation of dormant account arrangements.

(5) If the report shows that any of the matters covered by the report are unsatisfactory in any respect, the Treasury shall state—

(a) the improvements that are to be made to the arrangements;

(b) whether such improvements require legislation or could operate on a voluntary basis;

(c) the timescales involved in achieving those improvements; and

(d) the actions that the Treasury propose to take.

(6) In preparing each report, the Treasury shall consult—

(a) those persons who it considers to have relevant knowledge of the operation of the dormant account arrangements; and

(b) such persons as it considers appropriate.

(7) Each report shall be published in such manner as the Treasury shall determine, and shall be laid before each House of Parliament.

(8) The Treasury may make an order removing the obligation to prepare reports in subsection (2) above.

(9) An order made under subsection (8) above may not be made unless a draft of the statutory instrument containing it has been laid before, and approved by a resolution of, each House of Parliament.’.

When we discussed the matter before us in Committee, a strong view was expressed that the Government ought to return to it at an appropriate time, having reviewed the progress of the Bill and the operation of the reclaim fund. That feeling arose largely after the Government overturned amendments made to the Bill in the other place that introduced triennial reviews in perpetuity. The Committee felt that such a review regime was excessive. However, the general feeling was that there should be a review and that a relevant clause should be inserted into the Bill. At the time, I expressed my view that the Government would naturally want to have a review, but I did not think it appropriate to put it in the Bill. However, having listened carefully to the Committee debate, I undertook to reconsider the matter and to introduce a new clause committing us to a review.

Government new clause 3 will commit us to a comprehensive review set out in legislation and accountable to Parliament, so I hope that it will be recognised that we have listened. We had a very constructive debate in Committee. The new clause is clear and detailed, and commits us to a review of the scheme within three years after it is up and running. The review will cover the effectiveness of the scheme, including industry arrangements for reuniting customers with accounts before they become dormant, industry participation in the scheme and the arrangements for repaying customers whose assets have been transferred to the scheme. The review will be based on consultation with all the relevant parties, and we undertake to present our findings and conclusions in a report to be laid before Parliament.

I am very relieved to hear my hon. Friend say that the review will take place within three years of the scheme being up and running. New clause 3(5) states that the review will take place

“within three years from the date when a reclaim fund is first authorised”.

Does that mean from when the fund starts work, or from when the Bill is passed? What is meant by up and running?

We mean when the reclaim scheme itself is up and running. I think that it is right that there will be a period of time between the passing of the Bill and the setting up of the reclaim fund. It seemed to us—we explored this in Committee—that three years was about the right length of time. In actual fact, it will be slightly less than that, because we would have to report in that period.

Let me turn to the scope of the review. As I have said, it will consider the effectiveness of the legislation. That was a point that my hon. Friend the Member for High Peak (Tom Levitt) and other Labour Members raised. It will not attempt to review areas outside the legislation, such as the Financial Services Authority’s prudential regulation of the reclaims fund’s, management of money. It is right that FSA regulation is a matter for the FSA. We expect the regulator to make its own assessment of the effectiveness of its regime, too.

New clause 2 does the same thing, in essence, as new clause 3. We naturally prefer our clause and think that new clause 2 is unnecessary as a result. The Government have listened and we have acted as a result of the representations that were made in Committee, and that is why we commend the new clause to the House.

Before I sit down, I shall give way to the hon. Gentleman. He was not on the Committee, but I am sure that he takes an active interest in these matters.

I thank the Minister both for giving way and for indulging me, as someone who was not on the Committee but who takes an interest in these matters. I welcome the indications that the Government have opened their mind to the idea of a review. The Minister will be well aware of concerns inside the third sector about the response of banks to this opportunity as a result of economic circumstances. He said that new clause 2 was very similar to new clause 3, but does he not see differences in the scope for more regular reports and in the pressure that the Opposition new clause would place on the Treasury to do more than just report what is happening and to come to the House to suggest improvements?

There are some differences between new clause 3 and new clause 2. I thought it right to let the hon. Member for Fareham (Mr. Hoban) explain why he prefers his clause when he has his go. The Government will want to publish the findings of any review that we undertake and we will want to take forward any recommendations that come from it. Although some of the detailed wording is not in new clause 3, its spirit and intention would be the same, I think, as that of new clause 2, which I shall let the hon. Member for Fareham introduce.

My hon. Friend said that the review would be comprehensive, and he has also said that its recommendations could be acted on. In the knowledge that we will be left with a voluntary scheme, because the Government have committed to such a scheme, will comments about whether the voluntary scheme is working be allowed in extremis as a conclusion of the review? If the review recommended that we should move from a voluntary to a compulsory scheme, would that be one of the recommendations that would then be implemented?

I understand where my hon. Friend is coming from. As I said in my opening remarks, the review will cover industry participation in the scheme. If, for some reason, there was little industry participation in the scheme, I would expect the review to conclude that the voluntary scheme was not working. However, as I explained in Committee, I have no reason to believe that there will not be extensive voluntary participation in the scheme. The British Bankers Association and the Building Societies Association have both confirmed that their members wish to participate in the scheme. My hon. Friend will find that more than 90 per cent. of retail deposits are potentially committed to participation already. Obviously, we would hope that more banks and building societies with retail deposits would make such a commitment as the Bill is passed and as the reclaim funds are set up. I do not think that the problem that he mentioned will materialise. It would certainly be within the scope of the review to consider industry participation in the scheme.

I am grateful to the Minister for tabling new clause 3, which reflects the commitment that he gave in Committee to return to the issue. A feature of the debates in the House and the other place has been that a review process is needed. In Committee, the Government sought to remove the new clause that was inserted into the Bill on Report in the other place. As a consequence of that decision in Committee, we are considering Government new clause 3 and new clause 2, which I tabled.

It is worth bearing in mind that one reason why we feel that a review is needed is that the scheme is unusual in that the banks and building societies will join it voluntarily, but a statutory legal framework is required to enable balances to be transferred from the banks to the reclaim fund. Clearly, once expenses have been set aside, the amounts transferred to the reclaim fund will be transferred in England to the Big Lottery Fund to be used for the purposes set out in the Bill, and we will discuss those purposes later.

Given the hybrid nature of the scheme, it is important that a review mechanism is in place. One of the things that characterised the debate in the other place was the need to remove uncertainty about how the scheme will operate day to day, and there is still some uncertainty about how the reclaim fund will function. On that basis, the Lords determined that there should be a triennial review—that was provided for in the new clause introduced in the other place—but I accept the concerns that the Chief Secretary to the Treasury expressed on Second Reading that to commit the Government to a triennial review in perpetuity was perhaps not the right way to go.

Having reflected on that and the deletions that the Government made in Committee, I came up with new clause 2, which would provide the option to hold more than one review. One of the big differences between the Government’s new clause and ours is the option to hold further reviews. The requirement for a review could be terminated if both Houses approved a draft statutory instrument. Once the scheme is up and running and we have been through one review, it might well take another review before we are certain that the scheme is operating properly. That is why the Government are wrong in new clause 3 to create the scope for just one review, whereas we want reviews to be carried out more frequently but not necessarily until the end of time, as under the original new clause.

Our new clause also differs from the Government’s new clause in its provisions for the scope of the review. We would have a broader set of arrangements under new clause 2. The hon. Member for High Peak (Tom Levitt) talked about the voluntary nature of the scheme. Of course, new clause 3 does not explicitly address that issue, whereas new clause 2 does. We will talk about the voluntary nature of the scheme when we consider new clause 1, which was tabled by the hon. Member for Taunton (Mr. Browne), but the scope of my new clause would enable the essential issue of the scheme’s voluntary nature to be considered properly.

People expect the scheme to work, but there are concerns, which we will come to in more detail in considering new clause 1, that the scheme might not work on a voluntary basis, and we want to ensure that that is explicitly addressed in any review. The review provides a mechanism to enable us to signal to the voluntary sector, which is most concerned about the voluntary nature of the scheme, that we take on board its concerns and want to make sure that they are addressed in any subsequent reviews.

Subsection (4)(b) of new clause 2 would give the Treasury flexibility on what issues it considers. Matters other than

“the operation, effectiveness and scope of the dormant accounts arrangements”

could then be considered. For example, one might want to look into the expenses incurred by the reclaim fund, or the range of assets covered by the Bill, which simply covers bank accounts. Subsection (4)(b) could enable the Treasury to broaden the scope of the assets covered, and to consider national savings and investments and other unclaimed assets—perhaps shares, life assurance policies and pensions policies. That was discussed at some length in the other place, but not in Committee. It is an area of activity that we want to keep under review.

One of the reasons why we need a review is to ensure that there is a spotlight on the operation of the scheme. We are talking about the way in which banks unite dormant accounts with their customers, the processes that they use to do so, and the thoroughness with which they try to identify the customers concerned, to make sure that they do not lose out as a consequence of the scheme. In Committee, we discussed concerns about how well that would work in practice. A review will require the banks and building societies to continue to work hard on that. It will ensure that there is a mechanism for identifying flaws in the system, and will make sure that we have feedback from consumers on how well the scheme works. It will enable us to understand what the administrative burdens on the banks are, and how easy it is for charities to be able to identify dormant accounts to which they might be entitled.

One of the concerns of charities, which are often the residuary legatees of an estate, is how they could find out whether they had got all the money to which they were entitled. There is a dispute between the charities and the banking sector about how that would work in practice. Again, a review would enable the issue to be considered, so that we could see how things work in practice. I know from talking to both the Unclaimed Assets Charity Coalition and the British Bankers Association that they have a commitment to working closely together on that, but the fact that there is a review means that they have to work very closely together and reach a pragmatic solution to the problems without, I hope, our having to resort to a compulsory scheme.

The strength of new clause 2 is that it would enable us to hold more than one review. That reflects the fact that we may not get the scheme right straight away. We may need to consider how the scheme operates in its first three years, and we may then say that we need to come back for a second review. However, that second review might be the last review that is needed, if people are happy that the review has been properly carried out. That capacity to hold a review beyond the initial period is one of the key distinctions between new clauses 2 and 3. New clause 3 does not go far enough. It does not provide the comfort that I am looking for on the issue of the scheme being kept under regular and frequent review.

I am being optimistic, of course, but I would much rather that the Government withdrew new clause 3. New clause 2 provides a far more effective sanction and check, and offers far more effective scrutiny of the operation of the reclaim fund, than new clause 3 does. I hope that I have persuaded hon. Members that that is the case and that they will join us in the Division Lobby. However, the Government have moved some distance on this. When the matter was first raised in the other place, the Government were reluctant to accept a triennial review.

Surely common sense would dictate that if further reviews were necessary in the light of new information, the Government would carry them out, so there is no need for new clause 2.

I would rather have the comfort of knowing that the Government were obliged to have another review, rather than leave it to the whim of Treasury Ministers. That is a much more secure basis on which to have the review than to allow one review and for the matter then to be put back on the shelf and forgotten about. The requirement to have ongoing reviews, with the Government able to determine when those reviews should stop through the statutory instrument process in my new clause, would be a far better safeguard for consumers and voluntary groups and would show that the scheme was working effectively.

Surely common sense would dictate that if further reviews are needed they will be held. How many reviews does the hon. Gentleman think we should have?

The answer is that I do not know. We may have to have a review every three years until the end of time, although I suspect that that is not the answer. Equally, I am not certain that just once is the answer either. That is why new clause 2 seeks to place on the statute book the requirement for there to be further reviews until a statutory instrument removes that obligation. My new clause would give people greater certainty about the scrutiny of the process than the Government’s new clause. We are talking about money that belongs to consumers, to our constituents. I want to ensure that the reclaim process works properly and effectively, and when we are talking about potentially £400 million or £500 million, I am not sure that one review is sufficient. If the scheme is deemed to be working well at the end of one review, the Government could bring forward a statutory instrument to remove the obligation to have any future reviews. My suspicion is that one review will not be enough, and there will be a need for a second review. Therefore, rather than let it be at the discretion of the Treasury, it is important that Parliament should determine that there should be the capacity to have regular reviews of this issue.

That is the main area where there is a difference between new clauses 2 and 3. I do not think that new clause 3 provides the comfort and assurance that the voluntary sector and consumers are looking for, and that is why it is deficient. New clause 2 offers much greater protection to the voluntary sector and consumers that the scheme will work in both their interests.

I did not have the pleasure of serving on the Committee, but judging from the speeches of my hon. Friend the Minister and the hon. Member for Fareham (Mr. Hoban), it sounded like a particularly civilised Committee stage. I do not know whether I am right or wrong. The hon. Gentleman feels that new clause 2 is slightly better than the Government’s, but I am not sure whether he will seek to divide the House. There is consensus on the need to review how the legislation operates, and I welcome the common-sense approach taken by my hon. Friend in tabling the new clause. He seems to have accepted the views put forward in Committee by both the Conservative party and the Liberal Democrats—whom we have yet to hear from, so I hope I am not misquoting them in advance.

My only concern is the need for a degree of independence in the process, given the current climate. I understand why this has to be led by the Treasury—this is an idea that comes from the Treasury and Treasury Ministers—but it is important that the Government allow some degree of independence in the review process. We have not had this process before, but I envisage people being able to make written representations to the Treasury within a time scale enabling the review to take place. I am not sure whether that is what the Minister has in mind, or whether he proposes to elucidate further on how the process works, but it is important that we get as much detail as possible on the record, so that once the review process begins, people feel that it is open and transparent and they can put forward their views about how they can best express their concerns over what is happening.

As the hon. Member for Fareham said, we are dealing with other people’s money, so we need to be very careful about how the state claims and uses it, even though it may be for appropriate reasons and for good works. It is going through the lottery agencies and so on, so it must be for good things; it cannot be for bad things. Despite that fact, people need to have the confidence of knowing that there is a proper and transparent approach, but that degree of independence is missing from new clause 3. I do not know whether this was the case but, as the new clause was probably drafted over the weekend, as such things are when Report approaches, perhaps there was no chance to think about the issue more carefully. However, when the Minister replies, perhaps he will give us that degree of assurance—that that independent element will appear somewhere in the process.

I recognise that other Members have followed the Bill through its various stages and are therefore experts on these matters, bit I should like to ask the Minister whether the proposal will also cover dormant accounts from banks that are in liquidation. He will know that the Bank of Credit and Commerce International has been in liquidation for 17 years. It is an ongoing process, and there is clearly enough money to cover all the money that is left in that bank. Might we apply the legislation to the people whose bank accounts were, in effect, frozen on 5 July 1991 and, if we add the Government’s proposed 15-year period to the 17 years of liquidation, have had dormant accounts for 32 years? Has he considered the issue of a bank that has been insolvent or in liquidation for the huge length of time that BCCI has? There are still bank accounts that were dormant on 5 July 1991 and, presumably, still sit in BCCI in liquidation. The money is still there, and nobody has done anything with it. Has the Minister looked at that? When he replies, will he please reassure people who still wish to claim those accounts that something is being done as the Bill reaches its final stages?

It feels as though we are dancing on the head of a pin when there are rather more pressing matters facing the banking sector. Nevertheless, that is perhaps inevitable at this stage of the legislative process. I welcome the fact that at all times, in the other place and in Committee in this House, the Bill has broadly commanded cross-party support. That is reflected in the Government’s new clause 3, which I welcome. I am grateful to the Government for listening to the representations that were made in Committee and for seeking, to some extent, to accommodate the concerns that Members from all parties expressed.

With this legislation, there is, after all, a sense that we are entering slightly different territory, and, even though the headline concept is fairly straightforward, we are not certain about how some aspects of it will pan out in practice: whether 15 years, for example, will be an appropriate period for a bank account to be deemed to be dormant; the nature of the reclaim for people who want access to their funds after that 15-year period has elapsed; the mechanisms for distributing the money and the causes that it goes to; and many other features of the legislation besides. So my colleagues and I have always taken the view that some sort of review mechanism would be healthy and in the interests of the Government. The amendments, both in the other place and in this House, were not about Opposition point-scoring to try to put that process into the legislation; they were well-intentioned, and I am pleased that the Minister and his colleagues have sought to accommodate them and seen the wisdom in trying to take that approach.

My party’s view in both Houses has always been that the review should be regular, although in Committee I was, like the hon. Member for Fareham (Mr. Hoban), happy to concede that having a review every three years for—as he put it—“the rest of time” might be somewhat excessive. No doubt, over a period the legislation would settle down and people would feel confident with how it worked in practice.

Our concern now—as I said, we are dancing on the head of a pin somewhat—is whether one review is sufficient or whether subsequent reviews may be required. If they are, should that be expressed in the Bill or should the Government freely come to a conclusion about the issue after they have conducted one review? The margins of difference between us are pretty small, but in so far as the issue matters, I would prefer the legislation to express a mechanism for further reviews.

Having said that, I should say that new clause 2 is rather loosely worded. I can see why Opposition parties would wish to support the new clause because of the broad principle of having more than one review. The Government, however, may be anxious, with their majority, about putting into legislation provision for carrying out reviews “From time to time”, as new clause 2 states. That seems extremely loose; it could mean anything—every 50 years, I suppose. On that basis, the Government could easily either bring forward reviews or completely ignore new clause 2, even if it were passed by the House today, on the basis that having a review a century from now would not be sufficiently frequent or urgent.

In Committee, I made a concession when I had tabled a similar amendment that would have required the Government to consult “those affected” by the legislation. I was criticised by other Committee members, and I conceded that their criticism had some legitimacy and that my wording was too loose for a consultative process. However, new clause 2 would require the Government to consult

“those persons who it considers to have relevant knowledge”.

That strikes me as entirely open to interpretation by those undertaking the review. I take the point made by the right hon. Member for Leicester, East (Keith Vaz), who said that if the Government are reviewing their own legislation and are required to consult only those it regards as having “relevant” knowledge, they will pretty much have a free hand to consult whomever they see fit to consult—they may choose to consult only those who are likely to give the answer that they wish to hear.

Does the hon. Gentleman agree that the scope of new clause 3 is rather tighter than that of new clause 2 in respect of the topics that must be included in the review? I shall not read out new clause 3(2), but it seems more onerous on the Treasury in respect of the review than the provisions under new clause 2. New clause 3 seems more desirable in that respect.

I agree. New clause 3 is better worded; it might have been drawn up over a weekend, but new clause 2 must have been rushed through the drafting process much more speedily than that this morning. New clause 3 is more tightly defined, but new clause 2 has provision for subsequent reviews, whereas new clause 3 does not. Those who would prefer more than one review, or at least the option of that, may be tempted to support new clause 2. As I am of the view that the option of more than one review may be desirable, I am more sympathetic to the objectives of new clause 2, although I see that the drafting of new clause 3 has greater merit.

I am grateful to the hon. Gentleman for his generosity in giving way. As he pointed out, this is a case of angels dancing on the head of a pin, given that both new clauses rely on the discretion of the Treasury. New clause 2 says that reports should be prepared “From time to time”; as the hon. Gentleman pointed out, that is an incredibly elastic phrase. Under new clause 3, there is nothing to prevent there being more than one report, although there is no provision that there should be more than one. New clause 2 adverts slightly to there being more than one report, but “From time to time” is so elastic that both clauses would leave the issue to the discretion of the Treasury.

That sums up our debate rather well. I hope that Members present do not feel that their time is not being spent sufficiently productively.

I had not realised how much discussion could be had about a single new clause until the hon. Member for Wolverhampton, South-West (Rob Marris) walked into the Chamber.

The advantage of new clause 2 is that even if the Treasury agreed to have only one review, at least there would be a mechanism for ensuring that we could have a debate, whereas under new clause 3 if the Treasury decides on a whim not to have more than one review, there is no formal mechanism for this House to challenge the Government on that decision.

This conversation is getting more and more arcane. I conceded in my opening remarks that although on the face of it the Bill is quite straightforward, it has a few unusual features. We are navigating waters that have not previously been explored in this country, although similar schemes exist in other countries. There is therefore merit in having a review. Having said that, I think there is merit in periodically reviewing every piece of legislation that the Government introduce to see whether it has had the intended effect.

In new clause 3, the Government make the useful concession of allowing a formal review. I do not want to be mean-spirited, because they have moved on this: they have listened to the concerns that have been expressed and, in a healthily non-partisan manner, sought within the bounds of what they regard as practicable to bring forward proposals that can command broad support. The Opposition parties may wish the Government to commit to further reviews, which would be desirable, but I can see why they would be reluctant to support the rather loosely drafted new clause 2.

I do not anticipate the Conservatives pressing new clause 2 to a Division. On the basis that it contains the broad principle of having more than a single review, I would be willing to support the Conservatives, but I suspect that the Government would use their majority to vote down that proposal on the basis that they share my concerns about its loose wording.

It is a pleasure to follow the hon. Member for Taunton (Mr. Browne), from whom I learned—I had not realised this before—that the Liberal Democrat party is in a position to make concessions. However, I will put that aside for the moment.

As chair of the all-party group on the community and voluntary sector, and one to whom the sector has been talking loudly on this issue, I very much appreciate the spirit in which my hon. Friend the Minister has tabled this amendment, as he promised that he would following our debate in Committee. He has been as good as his word. I will, if necessary, follow him into the Lobby to support new clause 3.

My hon. Friend the Member for Clwyd, South (Mr. Jones) and I were part of the awkward squad on the Back Benches in Committee—[Interruption.] I hear gasps of astonishment from my colleagues. As such, let me make one or two other statements about the new clause. I hope that my hon. Friend the Minister is right about the intention to pursue a voluntary scheme. I am much consoled and helped by his saying in response to my intervention that legislation to address a failing scheme could well be considered at a later date. I hope that that is not necessary. Although he did not say so, I suspect that he is of the opinion that inserting too many get-out clauses may undermine the voluntary scheme, and we certainly do not want to do that. We will have a voluntary scheme as a result of the legislation, and we all want it to work in the interests of the beneficiaries, and of the good standing of the banks.

It is important to have a review. My hon. Friend the Minister was right to vote against the amendment passed in another place when it came to Committee, and I believe that new clause 3 is an important clarification of the position. It is a review process far superior to the one in the Bill when it first came to Committee. It does not rule out a subsequent review; it cannot do so. All Ministers must, at any time, be able to revisit previous legislation to check that it is working. Those of us who wanted an assurance about voluntary, as opposed to compulsory, status may be superficially attracted to new clause 2(5)(b), which suggests legislation might be introduced. In fact, that provision is meaningless. If legislation is necessary to put right something that is wrong with the scheme following the review, new clause 2 would not provide a quicker or more efficient way of achieving it; it simply says that it might be necessary. The Minister has conceded that it might, at some point, be necessary. New clause 2 is superficial and has been tabled for the sake of it, to allow a debate to take place.

Taking all those points into account, and in the spirit of what my right hon. Friend the Member for Leicester, East (Keith Vaz) described as the civilised way we dealt with matters in Committee, and in the spirit of the brevity of those proceedings, I support new clause 3.

I too served on the Committee, and it was an extremely enjoyable experience. The sittings were very good natured, and if all Committees were like that, this place would be far happier and more productive.

I am pleased with the direction of travel of the Bill. We are talking about large sums of money being taken from dormant bank accounts and being given to good causes, so it is important that once we establish the body overseeing that transfer of money, it is not out of sight and out of mind. We need to get it set up, and then be able to feel that we have done our job effectively and so move on. I am extremely pleased that in three years’ time we will revisit its performance when we can talk to the various parties involved in its operation to divvy up the cash. The banks and building societies will have their view, and some who have voluntarily signed up will have suggestions on how arrangements can be made even better. It will also give us the opportunity to talk to those who had not signed up to ask how we could persuade them to do so, without cajoling them with the threat of binding legislation. We can also talk to those who have been reunited with their money about their experience. There will be a good opportunity to sit down in three years’ time to establish whether the mechanism we are putting in place today is working and delivering efficiently and effectively.

I hope that new clause 2 will get a further hearing because, if we decide not to have further three-yearly reviews of the performance of the body in Parliament, it is important that there is a debate in Parliament when it can come to a settled view that it is happy with the direction of travel after three years and that it needs to have no further involvement. I prefer our new clause 2 to Government new clause 3 and, while there is no place for partisanship in this debate, I suggest humbly to my hon. Friend the Member for Fareham (Mr. Hoban) that if he does not like new clause 3, in three years’ time, he might be in a position—as a Minister—to change it and ensure that we have such debates regularly.

I shall cover three points: Treasury discretion, factors covered by any review, and those consulted. Although this is not a fantastically well-attended debate, and I was not on the Committee that examined the Bill, it is an extremely important matter because we are, as several hon. Members have said, talking about taking people’s money. Parliament must be extremely careful when passing any such legislation.

I have given my opinion of Treasury discretion in interventions on the hon. Member for Taunton (Mr. Browne), who kindly accepted them. I do not believe that new clause 2(2), which begins, “From time to time” makes any difference—it is simply a statement of principle.

I am sorry to interrupt my hon. Friend’s flow, but, as he did not serve on the Committee, perhaps he may be under a misapprehension. People’s money will not be taken—the money will always be there. People who lose contact with their funds will always have access to them—that is one of my reasons for pressing for the measure for the past 10 years. People can get their money. We are talking about using the money that cannot be given back to people for good causes rather than for profits for the banks.

I stand corrected on the nuances—the measure would not take people’s money for ever more. However, it provides for taking people’s money, and they would have to go through a procedure to get it back if they resurfaced after, for example, 20 years.

On Treasury discretion, new clauses 3 and 2 are effectively no different. I prefer new clause 3 because of the factors that it covers. On the review, new clause 3(2) contrasts with new clause 2(4). The subject matter that would be reviewed under Government new clause 3 is rather greater and more intensive than that envisaged under the Opposition’s new clause 2.

Similarly, when one contrasts new clause 3(3) with new clause 2(6), the consultation process envisaged in new clause 3 is rather better than that in new clause 2.

For those reasons, if new clause 3 is pushed to a Division, I will support the Government.

We have had an interesting debate, which shows that there is not a great deal of difference about substance between all hon. Members who contributed. We all believe that a review is necessary, and most of the debate has centred around whether more than one review should take place and whether provision for that should be made in the Bill.

The Government’s position is that a comprehensive review in three years is sufficient to establish whether the scheme is operating effectively and that further requirements for reviews constitute a heavy-handed approach. I understand the view of the hon. Member for Fareham (Mr. Hoban), who speaks for the Opposition, that new clause 2 specifies further reviews “From time to time”; the wording is fairly loose, as we have discussed. I also appreciate that new clause 2 includes a power to remove subsequent reviews through the affirmative resolution procedure. However, we do not believe that we need that amount of stricture. If the review demanded further consideration by Government, it could—and would—be conducted in the way that my hon. Friends the Members for Coventry, South (Mr. Cunningham) and for High Peak (Tom Levitt) clearly outlined. If a review revealed that we needed to review the scheme still further because sufficient concerns remained, we would do that. Not putting something in statute does not mean that it will not happen.

May I draw the Economic Secretary’s attention to a parallel? The Financial Services and Markets Act 2000 included a power to conduct a formal review of the FSA and the Financial Ombudsman Service in two years of their being established. That measure does not rule out further reviews, but only one review of FOS and the FSA has taken place. It is all very well Ministers saying, “Oh yes, we could have another review”, but, without a legislative requirement, the necessity for keeping the scheme under consideration will soon slip out of the Treasury’s mind. That is why new clause 2 requires further reviews, but also includes the power to remove the requirement, if appropriate. New clause 2 would force the Government to keep the matter on their agenda, whereas new clause 3 would allow it to drop off quickly, after the first review.

Let me assure the House that we would commit to keeping the issue very much on the Government’s agenda, but that would also depend on what the first review concluded. If the first review concluded that the scheme was working well—that there was extensive voluntary participation, that the reclaim fund was operating efficiently and that money was going to the Big Lottery Fund and being spent in exactly the right way—it might also conclude that no further action was necessary other than to keep a watching brief. To commit ourselves to hold a review “from time to time” would not be a good legislative route to pursue.

I should like to pick up some of the points that hon. Members have made. My hon. Friend the Member for Wolverhampton, South-West (Rob Marris) made the point in his speech and in response to an intervention by my hon. Friend the Member for Clwyd, South (Mr. Jones) that we are talking about customers’ money. A great deal of time and effort has already been spent on reuniting customers with their money. My hon. Friend the Member for Wolverhampton, South-West talked about the procedures that people will need to go through to reclaim their dormant account money, so I ought to explain that doing so should be very simple. It should require no more than taking two forms of identification to one’s bank or building society and saying, “I’d forgotten that I had this money in my account. This is me—please give me the money.” All the wiring that will support subsequent claims on the reclaim fund to reimburse the bank or building society will not be seen by the customer, who will just have to undergo a simple transactional exercise, just as people go their bank or building society and withdraw money that is rightfully theirs.

My right hon. Friend the Member for Leicester, East (Keith Vaz) made two important points. First, he asked whether there would be an independent element in the review and noted that the clause as drafted requires that the Treasury carry it out. As we have made clear, the review will be undertaken in consultation with industry, consumer groups and the voluntary sector. We see the process as a consensual one. We do not specify in the Bill whether a Treasury official would carry out the review or whether we want to commission independent consultants to do it, but that is a decision that we would want to make at a later stage.

I am most grateful to the Minister, but I hope that he will not have consultants conducting the review. He has put a jolly good new clause before the House and presented a brilliant Bill. Let us not spoil it by bringing in the consultants. If he wants to bring someone in, he should choose some great, towering figure from business or wherever—I do not know what Lord Digby Jones is doing these days—who will have a proper, independent look. Please, please do not go to consultants.

I take my right hon. Friend’s point. My point is that there will be extensive involvement and consultation as part of the review process. Whether the review team will be made up purely of Treasury officials or whether we want an independent person in charge, whoever they might be, is something that we can consider later, when drawing up the review.

My right hon. Friend also discussed the liquidation of BCCI. I stand to be corrected, but my understanding is that accounts from the former BCCI are not likely to be transferred into the reclaim fund or meet the requirement of dormancy, as defined in the Bill as drafted. Should that not be the case, however, I will endeavour to come back to him. However, the principle is that the scheme is voluntary and the reclaim fund is a private sector organisation. There is discretion on the part of the participating banks and building societies to interpret whether such accounts are dormant. That is one of the flexibilities in the system, which we believe to be one of its strengths.

The right hon. Member for Leicester, East (Keith Vaz) raised an important issue. Is the Minister saying, in effect, that the liquidator would be able to choose whether the remaining assets, in this case in BCCI, would be available for transfer to the reclaim fund? The liquidator’s duty to maximise the amount available for creditors would seem to suggest that doing so would be wrong and that any moneys remaining in dormant accounts should stay within BCCI and form part of a dividend to be distributed to creditors.

My understanding is that the latter would obtain. There is also the issue of what would happen if money was transferred into the scheme and a bank subsequently became insolvent. In those circumstances, I think that the customer would still be able to reclaim their money, and that would be the right thing to do.

The Minister said that the customer would be able to reclaim the money. Would they reclaim it from the liquidator, or would it go back to the insolvent bank first? I think that that was the point that the hon. Member for Fareham (Mr. Hoban) was making.

If the money has already been transferred to the reclaim fund, even in an insolvency situation, and if a customer is—

Let me try to explain it first. If it is still unclear to my right hon. Friend, I will endeavour to write to him. The key principle is that dormant accounts are transferred to a reclaim fund, then transferred on to the Big Lottery for distribution to worthy causes. If, at any time, a customer with a dormant account should realise that their account is dormant and want to get their money, they can go back to the bank or building society. That procedure would pertain in a normal situation, but I would suggest that it would also pertain in an insolvency. The customer would have the same rights as any other retail depositor in an insolvency. If I need to make any further clarification on that, I will ask leave of the House to do so.

In conclusion, I do not think that there is a great deal of difference between new clauses 2 and 3. The principal difference is the question whether there should be a review from time to time, or whether there should be just one review, followed by the Government making a commitment that, if we felt further reviews were necessary, we would endeavour to ensure that they took place. I hope that the hon. Member for Fareham will not feel that he needs to press new clause 2 to a vote, but if he does, I will invite my hon. Friends and other hon. Members to oppose it, and to support the Government’s new clause 3.

Question put, That the clause be read a Second time:—

Clause read a Second time, and added to the Bill.

New Clause 1

Register of dormant accounts

‘(1) The Treasury may make such regulations as are necessary for the establishment, maintenance and operation of a register of dormant account funds (“the register”).

(2) The regulations made under subsection (1) shall provide for—

(a) particulars relating to the dormant account to be entered into the register;

(b) arrangements to allow any registered charity to enquire of the registrar whether the register includes an account in the name of a deceased individual from whom the charity might expect to benefit;

(c) arrangements to allow any registered charity to be able to trace an account or accounts at any one time; and

(d) other particulars as may be prescribed by the Treasury.

(3) Before making any regulations under subsection (1), the Treasury shall consult—

(a) such persons as are likely to be affected by those regulations; and

(b) such persons as the Treasury considers appropriate.

(4) Regulations made under subsection (1)—

(a) may make different provision for different cases; and

(b) may contain such incidental, supplemental, consequential and transitional provision as the Secretary of State thinks fit.

(5) The power to make regulations under subsection (1) is exercisable by statutory instrument.

(6) No regulations may be made under subsection (1) unless a draft of the statutory instrument containing the regulations has been laid before, and approved by a resolution of, each House of Parliament.’.—[Mr. Jeremy Browne.]

Brought up, and read the First time.

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

As the Bill has commanded cross-party support throughout its progress, it might, in keeping with that spirit, be worth my drawing attention before I discuss the substance of the new clause to the distinguished list of Members from all parties who are signatories to it. They include the deputy leader of my party, my hon. Friend the Member for Twickenham (Dr. Cable), and the Chairman of the Treasury Committee, the right hon. Member for West Dunbartonshire (John McFall), whose report on unclaimed assets recommended that a reserve power to create a register be included in the Government’s proposals, which is precisely the purpose of the new clause.

The hon. Gentleman was referring to the hon. Members who were signatories to the new clause. The amendment paper lists six names, so I am curious as to why it also says that the total number of signatories is seven. Who is the seventh?

I do not know; there are so many wise Members in this House, of all different parties, that the list could include hundreds. I can only speculate that those who have not signed have not been sufficiently attentive to notice that the new clause was there to be signed, because anyone who had had the opportunity to sign it would have taken that chance.

The new clause was signed not only by the widely respected deputy leader of my party, but by hon. Members from all three main parties in this House, including the Chairman of the Treasury Committee, the right hon. Member for West Dunbartonshire. The Committee’s report on unclaimed assets recommended that a reserve power to create a register be included in the Government’s proposals. The right hon. Gentleman was also primary sponsor of early-day motion 1581, which I, too, have signed, along with other hon. and right hon. Members. It calls for a reserve power to create a register if reunification efforts prove insufficient. That is the nub of the matter, and I shall address it in due course.

The new clause was also signed by the hon. Member for Norwich, North (Dr. Gibson), chairman of the all-party group on cancer, and by two Conservatives, the hon. Member for Bromsgrove (Miss Kirkbride), who I believe used to be a vice-chairman of that group, and the hon. Member for Broxbourne (Mr. Walker), who was a member of our Public Bill Committee. It was also signed by the Member who has perhaps devoted more time and effort to considering dormant bank accounts than any other—the hon. Member for Clwyd, South (Mr. Jones). He, too, has expressed support for a reserve power for a register, and did so on Second Reading and in Committee.

In summary, unlike the other new clauses that we have discussed this afternoon, this measure is supported by Members from all three parties; it is doubtless supported by Members from other parties too. That is because the intentions behind it are entirely laudable, and it would help the House if I were to provide a small amount of background. We are concerned with the ability of charities to access legacies, which are a vital strand of the income of charitable organisations. The Building Societies Association and the British Bankers Association have estimated that up to £500 million is sitting in dormant accounts, but that estimate is disputed—there are a range of views as to how much money will be realised as and when this Bill becomes law. Some think that the sum may be as high as £5 billion, so we are talking about a large sum.

It is worth setting out a few facts for the House to give context on unclaimed funds and the impact on the charitable sector. One in seven people leave legacy gifts to charity, and those average 5 per cent. of their total estate. The Institute of Fundraising estimates that legacies accounted for 36.3 per cent.—more than a third—of the voluntary income received by charities in 2007, and that that totalled £1.6 billion.

Let us consider the impact that those legacies have on specific well-known charities. Some 46 per cent., or almost half, of the British Heart Foundation’s voluntary income came from legacies last year, as did 33 per cent. of Cancer Research UK’s voluntary income, totalling £135 million. This is not controversial; hon. Members on both sides of the House understand how important it is for the charitable sector that legacies can be realised, because they form a vital part of their funding. This country has an extremely healthy charitable sector. Many charities in Europe caring and catering for people afflicted by illness or other circumstances look enviously at the British charitable sector, because it raises more money, and employs and deploys more people, for charitable causes than those in many comparable countries. We are very well served by our charitable sector, and it is important to ensure that it can access the funds that it requires and that were intended for it by people in their legacies.

In the view of many in the charitable sector, charities cannot adequately locate legacies left in dormant accounts. In that regard, everyone welcomes the industry’s main initiative: the website www.mylostaccount.org.uk, which allows any person or charity to search online using basic information. That facility has been useful to many people, but nevertheless a feeling remains that it is not sufficient and that some charities will be unable to access the money intended for them.

I am listening very closely to the hon. Gentleman; I understand his logic, but why does the new clause not refer to executors or administrators of estates? It is they who would be seeking to fulfil a bequest made, for example, by a deceased person in their will to the Royal Society for the Prevention of Cruelty to Animals, of which I am a member. In such a situation, the RSPCA would have a vested interest in accessing any money due to it from the estate and in ensuring, if it could, that the estate had sufficient funds. However, surely that is primarily the duty of the executor or administrator. Should the register not advert to them rather than to registered charities?

The hon. Gentleman makes a reasonable point about where the emphasis should lie. If the new clause does not cater for that point sufficiently, it is because it was inspired by representations from many charities keen for progress to be made.

In Committee, I tabled an amendment to create a reserve power allowing a register of dormant accounts to be set up in the triennial report, if the scheme’s reuniting practices were found to be inadequate, but the Government were reluctant to accept that reporting requirement. However, Government new clause 3 introduced a mechanism allowing for a one-off report after three years to consider how the legislation has worked out. New clause 1 is particularly appropriate given the adoption of Government new clause 3. If the report were to find that the ability to reunite charitable organisations with legacies intended for them is inadequate, new clause 1 would be all the more valuable.

In the Lords, an amendment to introduce a reserve power to create a register was narrowly defeated—this takes me to the crux of new clause 1. It had been argued that it was desirable for individuals to be able to access a register to find moneys that were rightfully theirs. Concerns were expressed, although representations were made that those concerns were unfounded, that a database that was drawn so widely and accessed by a large number of people might cause problems. New clause 1 has been drawn much more tightly to take account of those concerns.

New clause 1 seeks to give the Treasury the reserved power to create a register to allow registered charities—not any organisation, but registered charities—to search for legacies left to them. Under subsection (2)(b), the register would be regulated by a registrar. Under subsection (2)(c), the search would be conducted across all dormant accounts that were registered. Subsection (2)(d) would provide the Treasury with flexibility to include other stipulations as it saw fit, and require it to consult those who were likely to be affected.

That is the essence of the proposal. I know that some concerns have been expressed, not least by the Conservative party, about whether a register would infringe people’s rightful expectations about data protection. I take those concerns seriously, because I share them. However, the advice that I have heard—other Members have received these representations, too—is that the new clause tabled by me and supported by Members of all three main parties would, as worded, not cause undue concern in that regard. The charities would have limited access to information and data that they would find useful in trying to access the legacy money that I described, which is essential to them, but people’s rightful expectations of privacy would not be infringed. Crucially—this is, in a way, a concession made by me and by others who share my view—that access would be restricted to registered charities only.

Some people have particular concerns. The United States, Canada and Ireland, as I understand it, all have registers as part of their dormant bank accounts initiatives, which have not been found to be susceptible to fraud and have not given rise to the type of concerns that some might have about the proposal in new clause 1. As to experience from abroad, the concession that has been made in terms of limiting charities’ access to the register is an attempt to find the common ground that has typified most of our deliberations on the Bill.

I hope that for all those reasons, as well as our collective desire for charities not only to raise as much money as possible but to raise money that was intended for them and for the causes that they wish to pursue, the new clause will be looked on sympathetically by Members from both sides of the House, and might even become part of the legislation.

I shall not detain the House for long, but I wanted to point out why I put my name to the new clause. One of the main tenets of the Bill is to encourage people to get their money back—to get as much as of this money as possible back to its original owners and to those who are entitled to it. They include those whose wills have lost contact with their bank accounts and so on. It should ensure that those who should have the money have the money. One of the best ways to do that, as has been seen throughout the world in all the other many countries that have such legislation, is to have a centralised register. That is so much easier than having to tout data around all the different banks and building societies.

If there is a central register that people know about, the process is much easier. I know that we have mylostaccount.org.uk, but I do not see why the Government should set their face against the new clause, which would be an added benefit for people who have lost contact with their money. It would also mean that not many more data were flying around. At the moment, those data have to be put into whatever other process has to be gone through, and sent around to various different organisations. There cannot be so much risk of data falling into the wrong hands. I wish that the Minister would reconsider the issue at this late stage and try to accept the new clause.

If I have any concern about the Bill, this is one of the areas that I am most concerned about. We recognise in the House that charities derive a significant amount of their income from legacies, and the fact is that the Bill does not make adequate provision to ensure that that is adequately reflected when the money in dormant building society accounts is divvied up.

I have added my name to the new clause almost in a probing way, because I would very much like the Government to accept that part of the large sums of money that we are talking about could make a significant difference to the funding of charities in this country. If 5 per cent. of legacies goes to charities, it would not be unreasonable for the Bill to reflect that by having 5 per cent. of the dormant bank and building society accounts fund set aside to be distributed to the charitable sector. I appreciate that, in going to the Big Lottery Fund, the money will go to good causes or to a good cause, but that is a very specific allocation.

I have listened to the arguments of a coalition of charities, and I am very sensitive and alive to them. In particular, the money that will be set aside from dormant bank and building society accounts could make a huge difference to less well-funded charities. Many popular charities do not struggle to secure funding and charitable giving, but a number of very worthy charities find it very difficult to raise funds, because they do not have the infrastructure or do not strike the same chord with the public.

I will not try your patience, Madam Deputy Speaker, by going through a range of the charities that struggle for funds, but I point out that mental health charities, for example, find it very difficult to raise funds. I go to many sporting events and see sporting teams wearing pink for breast cancer, which is an honourable and noble thing to do, but I see very few sporting teams wearing something to help to raise funds for the mentally ill, and I should like more of them to do so.

If I could prevail on the Government, I would say, “Please look at this.” We are talking about hundreds of millions of pounds. Would it not be possible to go away, rethink and ask officials, “Couldn’t we set aside 5 per cent. of the fund in a mechanism that would enable it to be distributed to the charitable sector?” That would find favour among many charities and among many of our constituents as well.

I support the concept of a register, for some of the reasons set out. We could be doing many things to tighten data protection. For example, Wolverhampton city council has no port for a memory stick on many of its computers, so there is no chance of a memory stick with information on it going missing, because a memory stick cannot be plugged in.

We are focusing on charities in the new clause. Although that focus is extremely worth while—I very much support what has been said about charities—it is too narrow, because individuals who should inherit money from dormant bank accounts could not do so, because of the regulations envisaged in the new clause. Charities could do so, as one class of beneficiary, but not individuals. That takes us on to a little background on what happens on someone’s death, which some hon. Members might not be aware of—I am; I was a solicitor before I entered the House.

For shorthand, I will refer to executors, rather than referring in the legal way to executors and executrices and administrators and administratices, because that confuses people. In everyday terms, when someone dies without a will, administrators are appointed to deal with the estate. If someone dies with a will, executors are appointed. However, there will be a grant of letters of administration on intestacy or a grant of probate if someone dies with a valid will. However, for the sake of argument, let us simplify and say that those who deal with the estate are executors.

The executors will distribute the money of which they are aware in accordance with the deceased’s wishes if there is a will and in accordance with the law of intestacy if there is no will. If someone dies intestate and there is no beneficiary at all, the estate goes bona vacantia, which is referred to in the explanatory notes and means that the Crown gets it.

If someone dies with a will and leaves a bequest to a charity in it, the charity should get the money. However, there may not be enough money in the estate, or it may be that the charity is the residuary beneficiary. For example, the will might say, “I leave all my furniture to my kids, and everything else I’ve got goes to the Royal Society for the Prevention of Cruelty to Animals.” The RSPCA is then the residuary beneficiary, and gets everything that is left over after the furniture has gone to the kids. That residuary sum will be higher if there is a dormant bank account that can be brought back in to swell the estate. The RSPCA, in the example that I gave, would then get more.

The difficulty with the wording of new clause 1, worthy as it is, is that it focuses only on charities. Let us say that someone dies and leaves several bequests in their will, which is quite common; often they leave a specific bequest of a named sum to a charity, and the residuary beneficiaries are their children. In that situation, the residuary beneficiaries may not get all that they are entitled to if they did not know that their deceased parent had a dormant bank account that had been swept into the reclaim fund, but that could come out of it if they ever found out about the account.

I am grateful to my hon. Friend for imparting his professional knowledge to the House. Could he go a little further and say whether there is any legal obligation imposed on executors and administrators to conduct a reasonably thorough search for less obvious assets, such as dormant accounts, that the deceased may have left?

My hon. Friend has an accountancy background, not a legal background, but he is absolutely right to use the term, “a reasonably thorough search”. Executors have to take reasonable steps; they do not have to search to the ends of the earth to find assets that might be brought into the estate and distributed in accordance with the law on intestacy, or the wishes of the deceased.

That brings me neatly to my point about the way in which the new clause is framed. It does not do what I—and, I suspect, those who tabled it—would like it to do. It focuses on charity, for obvious reasons, but there is a simpler way of doing things. I preface my remarks by saying that I think that there should be a register. There is a body that hands out grants of probate. One applies to it, shows it that there is a valid will, and that one is the executor and so on, and one gets a nice, stamped document back with “grant of probate” on the top. It has the name of the executor on it, and the name of the deceased, whose estate the executor is going to sort out. I cannot remember the body’s name, because it is a quarter of a century since I did such work. When that body—I think that it is a court of some sort—acceded to a request for a grant of probate and sent out that grant of probate, it could check a register to see whether the deceased had any dormant bank accounts. It could then let the executors know. If there was a dormant bank account, the executor could get the money back from the reclaim fund and use it to increase the value of the estate. Those who were entitled to distribution from that estate, be they individuals or charities, would then get more money.

Let us have a register, but it would be much simpler if the court that hands out grants of probate could simply check that register—that would, to some extent, deal with data protection issues—and inform the executors that it knew that there was a dormant bank account, because it had found the name on the register. That would be a much simpler way of doing things. It would benefit charities, which is what those who tabled the new clause admirably wish to do, and benefit others.

New clause 1 clearly shows that there has been some movement on the issue since we debated it in Committee. I am not entirely clear from the speech given by the hon. Member for Taunton (Mr. Browne) how he expects the register to work in practice. For example, it is not clear whether we are talking about a voluntary register, which would go with the grain of the scheme envisaged in the Bill, or a compulsory register, to which banks and building societies would have to sign up. That is an important distinction to draw. As I mentioned, the scheme in the Bill is voluntary; banks and building societies have the right to opt into it. All the arrangements are predicated on that basis. I am not entirely clear whether the hon. Gentleman would require banks and building societies to put this information on a register and therefore convert the scheme from a voluntary to a compulsory scheme. He may wish to intervene to clarify that.

I think that we all accept that charities want to maximise their income from legacies, and there is a set of circumstances in which they are not in a position to do so because they do not have the right to access the “mylostaccount” website, which is the portal that has been used to allow individuals to search for dormant bank, building society and NS&I accounts. It is not clear to me whether the hon. Gentleman expects that voluntary scheme to be superseded by his register. He did not talk about the interaction between the two processes and whether for charities the compulsory or voluntary register would supersede that scheme. He touched on my objection in Committee about the confidentiality of information, although I do not think that he has gone as far as I would have liked him to have done to reassure us. Just because it is a registered charity that has access to the register, that does not necessarily act as a tight limit on the number of people who could access that information. We need to be careful that we do not provide a window that people will use to commit fraud or to go on fishing expeditions for personal information. I do not think that the assurances that he gave dealt with that point.

The other important aspect that the hon. Gentleman did not touch upon is how much this will cost. We are being asked to establish a register for charities, which could be an expensive process. It would require banks to put data away to enable them to transfer it across to the register and there would be a registrar who would look after the register, which would have to be updated regularly and made available. There would be systems costs, input costs and data protection costs. One of the merits of the current scheme is that it should be a relatively lower-cost operation compared with a compulsory scheme, because every extra pound that is spent on administration is a pound less for the good causes specified later in the Bill. I am concerned that we have had no explanation of the cost of the scheme. The hon. Gentleman may return to that in winding up; I do not know. Perhaps his opening speech was just a warm-up for his conclusion.

The question is whether this is a remedy proportionate to the potential loss that charities face. Part of the problem is that we do not have a sense of how much money is at stake here for charities. No hon. Member would want to see a disproportionate solution being proposed to the concern that charities will lose out as a consequence of the Bill because they will not have the power to search for bequests.

It is helpful to note that the British Bankers Association has offered to work with the charities to try to identify the scale of the problem. That would enable the charitable sector, the banks and the Treasury to determine whether there is a significant problem that needs to be tackled. That could be picked up formally through new clause 3(1)(b) which states that the Treasury can review

“the effectiveness of the efforts made by financial institutions to secure that those entitled to the money in inactive accounts are made aware of the fact.”

It would fall within that new clause to check whether charities are losing out and by how much, and therefore to determine what action can be taken to improve the flow of money through to charities. There is a strong argument that the charitable sector may lose access to funds as a consequence of the arrangements in the Bill, but I have yet to be convinced that the hon. Gentleman’s proposed mechanism would be a proportionate response to the problem, and that it would contain adequate safeguards. There is a risk that, actually, it would undermine the voluntary nature of the Bill, and that the cost of operating the scheme would be such that it would reduce the amount of money to be made available to other good causes.

New clause 1 proposes giving the Government a power to establish a central register and to put in place specific arrangements regarding charitable legacies. The Government share several of the concerns expressed by the hon. Member for Fareham (Mr. Hoban). I was disappointed that he did not want to accept new clause 3, but it seems that, on new clause 1, we are thinking along similar lines. We debated the issues at length in Committee in the light of a similar amendment, and I am happy to set out our strong belief in the importance of effective reuniting arrangements and our commitment to ensuring a scheme that is effective, transparent and, above all, fair for consumers, and our legitimate concerns about the implications of the new clause for consumers and for human rights.

I recognise the position of some representatives of the charitable sector, including the Unclaimed Assets Charity Coalition, and I welcome its contribution to the debate and pay tribute to its valuable work. All parts of the House share a commitment to ensuring that charities get money that is rightfully theirs. Naturally, I welcome all constructive suggestions about how industry reuniting arrangements might be further improved, and I should welcome discussions between the British Bankers Association, the Building Societies Association and the charities to see what more can be done.

I know that this issue was gone over in Committee and in another place, but is the Minister aware that charities are concerned that, in effect, they will be cut out of the loop and lose 5 per cent.—potentially—of the legacies in the dormant bank and building society account fund? Would it not be better for 5 per cent. of the fund to be earmarked for distribution to charities? Is it not something that the Minister might consider at this late stage?

I heard the hon. Gentleman make that suggestion in his contribution, and if he feels that strongly about it, I am surprised that he has not tabled an appropriate amendment for discussion today.

Naturally, we welcome all constructive suggestions about how relationships can be improved, and my understanding of the charities movement is that, yes, it has some concerns. It wants to continue putting pressure on banks and building societies to do all they can to ensure that there are simpler arrangements so that the movement can get its rightful money. However, I must stress that, as my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) pointed out, the issue is not just about charities. The key question is, how do we ensure that the rightful owners of dormant accounts are reunited with their property so that only genuinely dormant accounts are transferred to the scheme? The proposals are right and fair for customers, because, after all, it is their money. Whether it involves the estates of deceased persons, or individuals who have simply forgotten where they have put their money, both have similar rights, and we must continue to focus on reuniting them with the property that is rightly theirs.

The Government welcome the commitment of the banks and building societies to a major reunification exercise in the run-up to the scheme becoming operational, and, in particular, we welcome the launch by the British Bankers Association, the Building Societies Association and National Savings & Investments of the “mylostaccount” website in January, to which Members have already referred. Almost 190,000 people have already used this free cross-industry service to reunite themselves with tens of millions of pounds. We welcome the commitment of individual institutions to institution-by-institution efforts to reunite. We have seen the fruits of that through high-profile efforts by HBOS, Lloyds TSB, HSBC and Nationwide.

My strong advice to individuals who think that they might have a bank, building society or national savings account or premium bonds of which they have lost track is that they should go to www.mylostaccount.org.uk. The service is free; people tap in their basic information—name and current and previous addresses—and can make multiple searches for free. If people are owed money from such accounts, they can find where it is and get access to it. They need not go to commercial fee-charging services for the privilege; the process is simple.

The “mylostaccount” website already allows executors, nominated representatives and even beneficiaries of wills to conduct searches for lost accounts. Executors can ensure that anyone or any institution, including charities, due legacy income from moneys in dormant accounts receives their entitlement. I would expect an executor, as part of the reasonable steps that they should take, to go to the minimal trouble of visiting the website, feeding in basic information and checking whether any money of which they are not aware is due to the relevant heirs and successors. That would be an eminently reasonable and proportionate step for executors to take.

The current arrangements are working and will continue to be effective in allowing people to be reunited with their money. We will, of course, keep the matter under review; the review clause on which we voted a few moments ago will include a review of the effectiveness of reuniting arrangements, so the issue will not be forgotten. However, I should like to repeat the concerns that I set out in Committee about a register and the power to introduce one. First, it is important to recognise that financial institutions must respect the confidentiality of the information that they hold about their customers. Transferring such information to a central source would in effect require banks to breach that confidentiality; it is difficult to see how that would be compatible with the framework of current UK law on confidential information and data protection, and it would raise human rights issues. I am not saying that it would be impossible to do that but, as the hon. Member for Fareham suggested, it would raise significant issues about the overall design of the scheme. The hon. Member for Taunton (Mr. Browne) said that other countries had similar schemes, but obviously he is aware that other countries have compulsory schemes, whereas we are proposing a voluntary scheme.

The hon. Gentleman has just walked in; if he sits down and is patient, I might give way to him in a moment.

Let me just make this basic point: other countries have compulsory schemes and their registration schemes are part of that. If we had a registration scheme, a number of issues would be raised. How would the register be enforced and monitored? What would be the legal penalties for non-compliance? Those major issues would have to be dealt with through additional primary legislation, so we could not take such a step lightly. Furthermore, significant amounts of data would be moving to a different system. At the moment, individuals can interrogate the current banking system, with all its firewalls for confidentiality, through the “mylostaccount” website. Having a registration scheme would mean that all the personal information of the depositors of accounts worth about £400 million to £500 million would have to be transferred to a registrar who would operate a new scheme, and that would raise serious data protection issues. As the hon. Member for Fareham suggested, it would also raise significant cost issues by placing a significant administrative burden on the scheme.

Fundamentally, I do not believe that we as a Government should be taking the reserve powers suggested by the hon. Member for Taunton, which are not necessary. Nor are they desirable, because they would challenge the fundamentally voluntary nature of the scheme, raise serious data protection and confidentiality issues and, in the view of some people, raise concerns about the potential for fraud. Including these powers in legislation would not be a good use of parliamentary time. They would have significant implications for future primary legislation, because they could not be created by this provision alone but would require further clauses to be inserted into this Bill or, probably, an extensive consultation period and a completely new additional Bill. For those reasons, I invite hon. Members to oppose new clause 1.

I wish to follow up on a few points from our short debate on new clause 1.

The hon. Member for Wolverhampton, South-West (Rob Marris) asked who were the magnificent seven who put their names to the new clause. I will run through them: my hon. Friend the Member for Twickenham (Dr. Cable), the right hon. Member for West Dunbartonshire (John McFall), and the hon. Members for Norwich, North (Dr. Gibson), for Clwyd, South (Mr. Jones), for Broxbourne (Mr. Walker) and for Bromsgrove (Miss Kirkbride). I have obviously missed out myself as an important signatory, but I notice from the amendment paper that it is in fact the hon. Member for Bromsgrove who is missing. We are both no doubt pleased to have our names attached, but that is a matter for the record, and I will turn to the more substantial points.

Genuine and reasonable concerns have been raised about the confidentiality of the information about account holders. Charities would search against the register using their name, date of birth and last known address, so any match would allow them only to contact the financial institution to undertake a claim in the normal fashion. They would not be giving out reams of information about the bank account holder in the way that some Members fear. I reiterate that this has been tried and tested in other countries, where those fears have not been borne out.

I was asked whether the scheme would be voluntary. I suppose that, going with the grain of the Bill as a whole, that is likely to be the case. However, it would, to some extent, be voluntary in name only, because most of the institutions, with regard to the Bill as a whole, feel a degree of compulsion to be involved with the scheme, even if it is a moral rather than a legislative compulsion. I remind Members that the first line of the new clause says:

“The Treasury may make regulations as are necessary for the establishment, maintenance and operation of a register of dormant account funds”.

It would not compel anybody to do anything, but it would provide that facility.

Does the hon. Gentleman accept that a register may well be complicated, and that if the Government do not like that complication, then why not, instead of giving the Big Lottery Fund 100 per cent. of the moneys contained in the dormant bank or building society account held by a third party, give it 95 per cent. and earmark 5 per cent. for distribution to charities?

That is an interesting alternative suggestion. Although it is not contained in the new clause, I imagine that the hon. Gentleman shares my concern about trying to ensure that the money intended for charities reaches them to the maximum degree.

I was asked whether this provision would be additional and complementary to the website or would replace it. I think that it could and should be complementary.

Points were raised about the cost. There would be a cost but, as the hon. Member for Broxbourne implied, there is currently a cost to the charities, who fear that they may not be united with money that was intended for them. Of course there would be an administrative burden if we were to set up a register, but one would hope that the total amount of money realised for charities would exceed the cost of administering the scheme many times over.

In his opening remarks, the hon. Gentleman said that there were compulsory registers in Ireland and Canada. Can he give us an indication of the cost of running those registers, by way of comparison?

No, because I do not have that information available. Ireland, for example, has a far smaller population than ours—it is about 5, 6 or 7 per cent. the size of that of the UK—so there would be difficulties in making a direct comparison. There may be economies of scale in running such a scheme in a country with a much larger population, such as our own. The parallels are not absolute in that the scheme in the new clause is voluntary. My earlier point was that Canadian and Irish residents are similarly concerned about data being used appropriately, but as far as I am aware, that process has not proven to be a great problem in those countries.

In conclusion, under the House’s decision to adopt new clause 3, a provision has been made for a review. It seems appropriate to those in my party that the Treasury take on that power. It may have a register—it is under no obligation to do so, but that would be a reasonable part of any review that the Treasury can decide to have, thanks to the earlier vote. We are seeking to complement the process, and go in the same direction as the Government. Overwhelmingly, we are putting forward the voice of the charitable sector, which has made many representations to us, and is broadly supportive of the new clause. On that basis, I ask hon. Members to support it.

Question put, That the clause be read a Second time:—

Clause 5

Functions etc of a reclaim fund

With this it will be convenient to discuss the following amendments: No. 12, page 5, line 1, at end insert—

‘(4A) Where the Treasury gives a direction under subsection (4), that direction shall be published within 28 days of it being given.’.

No. 11, in schedule 1, page 16, line 32, at end insert—

‘(ca) the name of each bank and building society listed in the FSA Register in respect of which no monies were transferred to the fund.’.

Two of the amendments in this group relate principally to the operation of the reclaim fund. In relation to the debate on how the fund will work, the Treasury has made it clear from the outset that this is a voluntary arrangement, and that the fund would be a private company set up by the British Bankers Association and the Building Societies Association to manage the transfer of money into the reclaim fund. It will also manage the reclaim process and determine how much money will be passed across from it to the Big Lottery Fund.

My concern is that, under clause 5(4), the Treasury will have the power to give a direction to the reclaim fund requiring it

“to give effect to any specified object that it has”

or

“to comply with any specified obligation or prohibition imposed on it by a provision that its articles of association are required to make under Schedule 1.”

In Committee, the Minister said that it would be the sole responsibility of the Financial Services Authority to regulate the reclaim fund for prudential purposes, and that the fund would be authorised by the FSA. That is fine, and we can understand the reasons for the limits on that involvement. However, there is still a requirement for the Treasury to give directions.

In Committee, we tabled an amendment proposing that, when such directions were given, they should be subject to parliamentary approval. The Government opposed that amendment, but we were reassured that these powers would be deployed only as a last resort. It is difficult, therefore, to work out why the Government were so reluctant to allow parliamentary scrutiny in this area. Indeed, when we pressed the Minister on the circumstances in which the power would be deployed, he said that the Government did not have any particular area specifically in mind, because they did not anticipate any problems.

So, we have a power that the Government do not believe will be used, and they do not believe that its use should be subject to parliamentary scrutiny. I could accept the power to give directions, if it were to be subject to parliamentary scrutiny, but I do not accept it without such scrutiny. This is an unsatisfactory situation. I have therefore tabled amendment No. 10, which proposes to omit subsection (4) of clause 5, which would make the measure more in keeping with the spirit of the legislation, namely that the reclaim fund is to be a private company established by the BBA and the BSA, and that it should operate as such, without Ministers having the power to give directions to the company to force it to act in a particular way.

Amendment No. 12 deals with this issue in a different way. It proposes that, when the Treasury gives a direction under clause 5(4), that direction should be published within 28 days of its being given. If there is to be no parliamentary scrutiny, and if these powers are to remain part of the Bill, there should at least be some publicity given to the direction. Accepting this amendment would not be a big step for the Government to take, if they believe that the powers are absolutely essential for them to have. They should not be afraid of publicising such directions. Indeed, elsewhere in the Bill, there are provisions for directions to be given to the Big Lottery Fund, and such directions will be publicised through the Big Lottery Fund’s accounts. So there is a clear role for the publicising of directions.

Amendment No. 12 would provide a vehicle—although not as good a vehicle as a statutory instrument—for Parliament to scrutinise the Treasury’s use of the power of direction. Members of Parliament would be able to ask questions, and the Treasury Select Committee would be able to investigate the Treasury’s use of the power. A softer scrutiny element is therefore involved. The amendment is a perfectly reasonable proposal to achieve some level of parliamentary scrutiny, if the Government are so wedded to keeping on the statute book a power that, at the moment, they do not expect to use.

Amendment No. 11, which goes back to an issue that we discussed in Committee, concerns the level of publicity that should surround this part of the scheme. Schedule 1(3) contains a provision for the reclaim fund to publish certain information in its accounts. At the moment, that information is limited in four ways. The fund must publish its accounts and reports in accordance with the Companies Act 2006. It must publish

“the name of each bank and building society that transferred money to the fund in that year, and the amount transferred by each one”.

It must publish

“the name of each bank and building society in respect of whose accounts payments were made from the fund in that year following repayment claims and, in relation to each of those banks and building societies, the total of the payments made”.

It must also publish

“the total amount transferred in that year to the body or bodies for the time being specified in section 15(1).”

However, that does not include a requirement to name and shame, by saying which institutions have not contributed to the reclaim fund. As part of the series of measures that we need to take to ensure maximum scrutiny, and to ensure that we know that institutions are taking seriously their commitment to be part of this voluntary scheme, the reclaim fund should make it clear in its accounts which institutions have not contributed to it.

When we debated this in Committee, the Minister argued that it was not the job of the reclaim fund’s horizon scan to find a list of banks and building societies, and to determine whether or not they had contributed. He said that the FSA had a register of such entities. I have learned a lesson from my previous drafting experience, which is why amendment No. 11 refers specifically to the list of banks and building societies that the FSA will hold in its register. The reclaim fund would therefore not have to do any horizon scanning; it would simply have to compare the list in the register with the banks and building societies listed under paragraph 3(1)(b). Those that were not so listed would be listed under proposed new paragraph 3(1)(ca), which would tell us exactly which had not contributed to the scheme. That measure would maintain keep the spotlight on those institutions that had not co-operated with the scheme.

These are three very reasonable amendments. Amendment No. 11 is about scrutinising who has not contributed to the scheme. Amendments Nos. 10 and 12 give the Minister some choice: either to take out the powers in the Bill or to require the Treasury to publish the direction within 28 days of publication. The Minister will have his own views, and I suspect that he is minded to reject both, but given that the Government rejected parliamentary scrutiny of the direction—in the Minister’s words, it is the “ultimate sanction”—there needs to be some check on the Government. If they are not prepared to accept such a check, amendment No. 10 is the right road to go down.

Let me reverse the position of amendment No. 10 for a moment. If clause 5(4) were not in the Bill—precisely what the amendment is designed to achieve—and I moved an amendment to put the wording of subsection (4) back into the Bill, I suspect that the Government would respond by arguing that it was unnecessary and there was no need for it—[Interruption.] The hon. Member for Fareham (Mr. Hoban) is looking puzzled; I am saying that if I attempted to insert that wording into the Bill, the Government would probably say, “We don’t need it; it is redundant”, as they often do in respect of amendments coming from both sides of the House. We are told that we do not understand and that there is no need for the amending provision.

If I ask what clause 5(4) does—if, as one anticipates, the Government resist amendment No. 10, which would remove that provision—the answer is that it gives the Treasury a power that I suspect it needs, because I cannot see anywhere else in the Bill where it defines who the members of the reclaim fund are. It will be a company, which has to have members—the shareholders—although I know that the Bill provides that they are not going to get dividends. It seems to me that clause 5(4) is needed on account of this lacuna, whereby the members of “the” or “a” reclaim fund are not specified.

I appreciate from paragraph 51 of the explanatory notes that the

“British Bankers’ Association and Building Societies Association have committed to lead on the selection or establishment of a body to act as a reclaim fund.”

However, when the Minister responds to the blandishments of the official Opposition on amendment No. 10, I hope that he can elucidate that and clarify whether I am right that clause 5(4) is necessary because the Bill does not specify who the members of a reclaim fund should be. It would be for the members of that fund to carry out enforcement if the directors failed to give effect to specified objects or to comply with the provisions in the memorandum of association and articles of the fund. Usually, one would expect the members of the company— with a limited guarantee or otherwise—to be responsible for enforcement. It is for them to say, “You are not complying with the rules of our organisation or company. As directors, you should be, so if necessary, we will take you to court to get you to comply”. If one does not know who the members are, however, one cannot say that the watchdog power exists, which is why subsection (4) is necessary.

If it were that simple, the Minister would have said that in Committee, but let me quote what he did say, as the hon. Gentleman did not have the pleasure of serving on it. The Minister said:

“We do not have particular areas specifically in mind because we do not anticipate any problems. This is a voluntary scheme. A private company is going to be set up in accordance with the legislation, and we have confidence that it will appoint people who will run the reclaim fund in an effective way.”––[Official Report, Dormant Bank and Building Society Accounts Public Bill Committee, 14 October 2008; c. 17.]

The Minister clearly had confidence that the members would be correctly chosen by the British Bankers Association and the Building Societies Association, but even that obvious statement does not quite explain why this power is in the Bill.