Consideration of Bill, as amended in the Public Bill Committee
New Clause 1
Authorised reclaim funds: duty to assess and report
‘(1) The Secretary of State must make an annual assessment of the health and governance of authorised reclaim funds. The assessment must be reported to Parliament.
(2) The first report under subsection (1) must be laid 12 months after—
(a) any restriction imposed under section 18A(1)(a) of the 2008 Act comes into force, or
(b) the provision in section 18A(1)(b) of that Act comes into force,
whichever occurs first.
(3) An assessment under subsection (1) must include an evaluation of the risk of insolvency of the fund.’—(Alex Davies-Jones.)
This new clause would require the Secretary of State to assess the health and governance of reclaim funds regularly in relation to the risk of insolvency, and to report on this annually to Parliament.
Brought up, and read the First time.
I rise to speak to new clause 1 in my name and that of my hon. Friend the Member for Manchester, Withington (Jeff Smith). As the Bill has moved through this House and the other place, I have been pleased by the progress that has been made, although there is still work to be done to ensure that dormant assets are distributed and governed effectively. Colleagues will be aware that the Bill will expand the current dormant assets scheme, which was first introduced by a Labour Government in 2008. The Government define dormant assets as a financial product, such as a bank account, that has not been used for many years and which the provider has been unable to reunite with its owner, despite efforts aligned with industry best practice.
In 2008, the Dormant Bank and Building Society Accounts Act was passed to provide a system to distribute dormant assets to good causes. Currently, 24 banks and building societies participate in the reclaim fund scheme, but Labour has always intended that the dormant assets scheme would broaden the financial products to which that legislation applies.
Although the Bill makes some progress and Labour supports the need for consultation, we urge that the scheme go much further. With the right safeguards in place to find the owners of assets, unclaimed winnings from gambling, pension assets and physical assets could be considered in the future, too. While I am grateful to the Minister for his frankness throughout the passage of this Bill, I must once again put on record that while Labour is generally supportive of the Bill, we urge that further consideration be given to incorporating pension assets into the scheme. While I recognise that the Minister has highlighted that occupational pension schemes and personal pension schemes whose owners were automatically enrolled are excluded, or out of scope of the Bill, I hope that in the future those assets will receive further consideration.
The core principles of any scheme must remain clear. Attempts should first be made to reunite assets with their rightful owners before transferring them. Owners should always be able to reclaim their funds, and participation must ultimately be voluntary. Labour is also clear that any funds released to the dormant assets scheme must not be used as a substitute for Government spending. We know that the increasing cost of living is impacting so many people across the country, and this Bill presents an important opportunity to release further funding and to put right some of the wrongs. On that point, I pay particular tribute to colleagues on the all-party parliamentary group for “left behind” neighbourhoods, who have been closely focused on the importance of dormant asset funding for vital community projects in the most left-behind parts of the country.
With that in mind, I place on record Labour’s thoughts on community wealth funds, which the Minister knows I feel passionately about. In the other place, Labour secured an amendment that would have allowed the Secretary of State to include community wealth funds as recipients of funding. That amendment had cross-party support and was generally welcomed by the sector. The aim of including community wealth funds as recipients of funding is clear. The designated money would be designed to go towards social infrastructure to further the wellbeing of communities suffering from high levels of deprivation. I was disappointed and also surprised that the Government chose to remove a measure aimed at empowering communities, which is also at the heart of the Government’s well-rehearsed levelling-up agenda. That said, I welcome the Minister’s collaborative and candid approach throughout the latter stages of this Bill, and Labour welcomes the Government’s commitment to including community wealth funds as part of the first round of consultations, as outlined in the Government’s amendment 2.
We must now make sure that momentum is not lost on that important development, as community wealth funds are central to reviving so many communities up and down the country. With that in mind, central to any spend is the importance of governance and sustainability in ensuring that funds of this nature are maintained and in good health.
The Minister knows, and I believe agrees, that scrutiny of the reclaim fund is vital. That is why we have tabled new clause 1. Recent events have highlighted the need for a transparent approach to decisions made in this place and the other place, and it is therefore vital that the Government are held to account on the health and governance of reclaim funds, especially in relation to the potential for insolvency.
I endorse entirely what my hon. Friend is saying. Does she agree, given the lack of confidence in some of the decision-making processes that the Government have undertaken before allocating funds, that it is all the more reason why new clause 1 would have real public confidence?
I wholeheartedly agree with my hon. Friend. Part of the reason we tabled new clause 1 is for openness and transparency, so that the public and this House can scrutinise exactly where this funding is being placed. Scrutiny is at the very heart of our jobs here in this place, and an annual report brought forward to Parliament, as new clause 1 stipulates, would be a crucial step forward.
Lastly, on Government amendment 1, I am pleased to see the clarification around collective scheme investments. It is vital that such investments remain eligible for incorporation into the reclaim fund. I hope to see further assets incorporated in the future, as I stipulated earlier.
Ultimately, Labour supports the Bill as our priority remains expanding the dormant assets scheme in line with our commitments first made in 2008. The programme so far has been extremely successful, and predictions suggest that expanding the scheme in such a way would identify about £3.7 billion of unclaimed assets, of which about £1.7 billion would be eligible for transfer to the reclaim fund. From that, £880 million would be repurposed for good causes across the UK. Labour supports that extremely welcome step, and I look forward to continuing to work with the Minister to tackle the challenges around extending the scheme to other assets. I hope that he will take on board our concerns about future governance of the fund, too.
I congratulate the Government on bringing forward the Bill. I recognise that, as the hon. Member for Pontypridd (Alex Davies-Jones) said, the release of dormant assets started with Labour and has been a cross-party achievement. My thanks, congratulations and appreciation also go to the financial institutions that have made the money available.
I am pleased with the Government’s proposals, including the consultation on the potential introduction of a community wealth fund. My congratulations and appreciation to the Minister for including that as a possibility, and to my hon. Friend the Member for Sedgefield (Paul Howell) and the right hon. Member for Kingston upon Hull North (Dame Diana Johnson) for their work in bringing that idea forward.
There are other great ideas—we could abolish personal debt by capitalising credit unions with this money or distribute it direct to community foundations in our constituencies—but I think that the community wealth fund is the best idea. I hope that we will see the money going into civil society and social infrastructure and into supporting the great levelling-up agenda to which the Government are committed. This is a tremendous Bill, and I very much support what the Government are doing.
It is always a pleasure to speak in these debates. I thank the Government and the Minister for all they have done to make this Bill happen. Clauses 12 and 29, to which the Minister’s amendments refer, indicate things that the Democratic Unionist party wish to see, and I let him know that our party will support the Government tonight. However, I now wish to speak to new clause 1.
I agree that there must be further provision for dormant assets. Why not make good use of funds that would ultimately lie dormant unless further action was taken? The Bill aims to expand the current criteria, which will come with some great benefits, so it is great to speak on an important issue such as this. I welcome the Bill and look forward to the debate’s conclusion.
The Bill’s core purpose is to extend the dormant assets scheme to other financial assets, which could generate an additional £880 million of contributions. The figures are gigantic when we think on them, and they indicate where the Bill is going and what it can achieve. The Bill has three main functions: to track dormant account owners and reunite them with their account; to allow account owners to reclaim any amount they would have been eligible for; and to allow firms to partake as a voluntary process. The Bill will expand the assets involved further, creating a more sustainable economic success rate, make it a requirement for firms to get involved, and remove further financial restrictions. It is a win-win for the Government and for the Minister in particular.
The dormant assets scheme currently supports and boosts, by some £800 million, innovative, long-term programmes that aim to address some of the most pressing social and environmental issues. As I said, its expansion through the Bill will unlock an additional £880 million. It is stated that the Bill’s benefits will be felt across the whole of the United Kingdom of Great Britain and Northern Ireland. I for one would like reassurances from the Minister that it will extend to Northern Ireland and that we will benefit as well. The potential for benefit in the UK mainland is great, but we also want to see it, if we can, in Northern Ireland.
Thus far, the scheme has benefited many foundations. The Youth Futures Foundation, which has undertaken significant work to tackle youth unemployment, got some £90 million, and Big Society Capital got over £400 million to tackle homelessness. These are great projects. The Bill makes money available to address social issues; how could anyone not say that that is great?
Also at the heart of this scheme is securing protections for those who own any of the financial assets involved. Dormant assets remain the property of their owners, who can reclaim any money owed to them in full at any time. In Northern Ireland, the Dormant Accounts Fund NI works to support the voluntary, community and social enterprise sector, and we can see the benefits immediately. In Northern Ireland more than 44,000 staff are employed in the sector, which accounts for 6% of the total Northern Ireland workforce. I would encourage all organisations to contact the National Lottery Community Fund to take advantage of the wonderful scheme that Northern Ireland has to offer.
I thank Members who have already contributed, and those who will contribute later, to a debate that has made clear the potential for a great economic impact following this expansion. I want to ensure that the devolved institutions can take advantage of this scheme as well, and that the funds generated in England are greater than those generated in Scotland and Northern Ireland. There must also be further engagement with local communities and smaller organisations to ensure that they are not left behind.
I acknowledge the benefits that the Bill has introduced so far, and I shall welcome further discussion and expansion to ensure that financial assets are not wasted and the money is put to good use. We have seen what the scheme can do; it can do more.
I support the Government’s proposal for a public consultation on distributions to a new community wealth fund. We talk often and rightly in this House about levelling up, particularly on the Government side of the House. It is right that this a priority for the Government, but too often we talk as if the work of levelling up were a job for Government alone. I firmly believe that the best decisions for communities are rarely made for them rather than by them. That is why we should treat communities across the country as the legitimate decision makers that they are. We all know that strong community leaders can transform a local community We will all have seen that on our patches. I could name many from East Surrey, including Janine Battersby in Woldingham, and Kay Hammond and the Calvers in Smallfield. With their dedication, charisma and get-up-and-go, they forge friendships, support those who need extra help, and put the local needs of their communities in front of those who might be able to meet them.
Let me give the House a brief example of this in action. I recently visited the residents group Ambition Lawrence Weston. On the edge of Bristol, Lawrence Weston had for too long had been used as a dumping ground for social housing tenants with complex needs. They were trapped in a negative cycle. Low housing costs made it attractive for the council to use it to temporarily house people, often with complex needs. That created disruption and fracturing within the community, which in turn drove low housing costs—and so the cycle went on.
However, with the support of the Local Trust’s Big Local community fund programme, the residents decided that they had had enough of things being done to them instead of for them. With some initial capital support from the community fund, they have transformed the area by building a new community centre, bringing in a new supermarket, introducing a local lettings policy, and bidding directly for Government funds themselves. They have a solar farm and even a wind turbine to tackle fuel poverty. I am in awe of that team. I have seen similar developments on my own patch: we have a community fund, Your Fund Surrey, and I am working with some brilliant people in Whyteleafe, Deano, Sara and Marcus, who are pushing to set up their own community centre and are doing it brilliantly.
It was a relatively small amount of funding that made these developments possible, but that funding unleashed the really important thing: the leadership, ambition and energy of a group of remarkable, community-minded individuals, which has made such a difference. Without these funds, that would have been wasted. I believe that the community wealth fund can unlock that level of ambition and energy from individuals up and down the country, and I am pleased to support amendment 2.
I welcome amendment 2 to clause 29. Those who have followed the passage of this Bill from its introduction in the other place to its Report stage today will know that along with other members of the all-party parliamentary group for “left behind” neighbourhoods, including my excellent co-chair, the hon. Member for Sedgefield (Paul Howell), I have long been advocating the establishment of a community wealth fund as part of the extended dormant assets scheme. The Government’s amendment proposes that a national consultation on the distribution of dormant assets should include consultation on the distribution of these moneys to a community wealth fund through including them on the existing list of beneficiaries set out in the original legislation on dormant assets. Such a fund would be aimed at developing social infrastructure in the most left-behind neighbourhoods of the country—neighbourhoods such as Bransholme and Orchard Park in my constituency of Hull North. They are communities that not only suffer from extreme levels of disadvantage and deprivation, but experience significant deficits in their local community fabric. As research from the all-party group has found, residents of these communities experience well-below average outcomes across a whole range of indicators. For example, our recent report on health inequalities found that people living in left-behind neighbourhoods have among the worst health outcomes in England, with growing disparities between them and the rest of the country, including the most shocking statistic that a person from one of those neighbourhoods was 46% more likely to die during the covid pandemic.
If the Government want levelling up to be a success, they must reach these communities, which, for far too long, have missed out on their fair share of resources. Funding has to be for the long term, supporting transformational change at the neighbourhood level. The principles underlying the dormant assets legislation make it clear that the money from the scheme should be used to have a positive impact on society by contributing dormant assets for systematic change. I am very encouraged by the Government’s amendment, which upholds these principles for the use of dormant asset funding, and I very much welcome the inclusion in the Bill of consulting on the distribution to community wealth funds.
I am not alone in welcoming amendment 2. As well as parliamentarians from the all-party group, the proposal for a community wealth fund is backed by a cross-sector alliance of more than 470 organisations, which include 40 councils and combined authorities. I thank Local Trust, the secretariat for our all-party group, for all the work that it has done to promote the role of community wealth funds. I thank the Minister in particular for engaging with us on a cross-party basis and listening to the case that we have been making on behalf of those communities that have the least.
I very much welcome the Government’s amendment and look forward to working with the Minister and the Government on how a community wealth fund can be established and implemented swiftly on the conclusion of the national consultation. I hope that Members from across the House will support the amendment.
I thank my hon. Friends the Members for Devizes (Danny Kruger), and for East Surrey (Claire Coutinho), the hon. Member for Strangford (Jim Shannon) and the right hon. Member for Kingston upon Hull North (Dame Diana Johnson) for the comments they have made already. I cannot state how much I welcome the Bill being brought to the House and how successful and efficient its passage has been. I thank the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), for tabling his amendment to clause 29. It represents an important step towards establishing a community wealth fund that would level up the social fabric of our most left-behind neighbourhoods across England.
I wish to say a few words on behalf of the all-party group. I know that the Government are committed to regenerating communities that suffer from both extreme levels of poverty and high levels of community need—communities such as Ferryhill, Trimdon and Thornley in my Sedgefield constituency, and communities across the country, from the north of England, through the midlands and down to the coastal communities on the south coast where residents often feel forgotten and cut off from support or funding.
I thank the Minister for meeting me and my right hon. Friend the Member for Kingston upon Hull North, my fellow co-chair of the all-party group for left-behind neighbourhoods, to hear our representations and to understand the importance of what we are trying to achieve and how we can address this through the community wealth fund. Together, with other members of our all-party group, I look forward to a continued dialogue with Government and with colleagues across the House and in the other place on how such a fund can quickly be rolled out on swift passage of the Bill and the planned national consultation.
Numerous evidence sessions and research conducted by the all-party group since it was established in June 2020 have shone a light on the high levels of need and deprivation that exist in these communities and neighbourhoods and the issues faced by the residents who live there. Most recently, a report found that the people in these communities live shorter lives and spend more years in ill-health than those in the rest of the country. These findings have rightly captured the interests of national media and are another sobering testament to the fact that action is urgently needed to level up social, economic and environmental outcomes in deprived communities across the country. I look forward to what the levelling-up White Paper has to say about that, and I know that our all-party group will be keenly following those developments.
It is clear that transforming left-behind neighbourhoods is a long-term job. To deliver on that agenda, we need to go beyond physical infrastructure investment—welcome though that is in bringing hope to an area, as I know from my campaign work to restore local rail links such as Ferryhill station. Good local transport provision is key to levelling up, because it boosts connectivity in disconnected areas.
To level up successfully, however, and truly make a long-lasting difference to people’s lives, we must address the rebuilding of social infrastructure. Social infrastructure —places to meet, exchange ideas and take part in civic life—glues communities together. It underpins the vibrant local life that everyone seeks to be part of in their communities; it cements our trust and pride in our local heritage and the places where we live; and it provides us with something to rely on in times of crisis.
As the amendment explains, a community wealth fund would give long-term financial support for the provision of local amenities and other social infrastructure in a way that is led from the bottom up. As was said earlier, we must allow it to be done by people, not to people. As the Government have acknowledged on several occasions during the Bill’s passage, local people are best placed to identify what is needed to make their communities a better place to live.
In our evidence sessions, we heard first-hand the amazing work being done by communities up and down the country, and how powerful an impact local people can have when they work together to improve local outcomes with the right resources and support. We heard truly inspiring stories of communities in neighbourhoods from Bristol to Hartlepool taking the lead in levelling up their local area through widening access to opportunities and employment outcomes for young people, tackling fuel poverty and community led climate action.
Climate action is, of course, an increasingly important focus of activity, given the transition to net zero, and one where left-behind neighbourhoods are particularly at risk of falling further behind as a result of the economic restructuring under way. We therefore need to equip them with the confidence, capacity and resources through patient and long-term support to take action on what matters most to them and to transform their communities for the better. The community wealth fund proposal serves exactly that purpose. It builds on research and learning from previous regeneration policies, which all support the notion that community involvement is essential in achieving lasting change.
As already said, the community wealth fund is supported by more than 470 private, public and civic society organisations that have joined forces to form the community wealth fund alliance to call for the creation of such a fund. To reiterate what I said when presenting my ten-minute rule Bill in December, I believe that it would supercharge the levels of community confidence and capacity in left-behind areas.
In the long run, the social capital that is developed will be reflected in residents’ ability to create and lead sustainable strategies on how they can make change happen locally and tap into the wider opportunities offered on a regional level. In short, the investment would pay significant dividends in the longer run through funding from dormant assets at no extra cost to the public. We are presented with the opportunity to create a permanent endowment for communities in need.
For much of the hard work on the community wealth fund, I thank Local Trust and its team, particularly its chief executive Matt Leach. I know that the work is not over—in many respects, the real work starts now—and that I and others will no doubt be working closely with Local Trust to ensure that the fund becomes a reality.
I finish by thanking the Minister again for tabling the amendment to clause 29. It is heartening to hear the Government emphasise the importance of hyperlocal decision making for levelling up. I look forward to working with the Minister, the Government and our APPG to develop social infrastructure and boost civic pride in communities across the country.
I know that the Westminster press corps has been waiting for something exciting to happen in Parliament today, so I am glad to be able to help to provide it. It is good to see the Secretary of State in her place fresh from her “Channel 4 News” interview triumph.
The SNP welcomes the Bill and the expansion of the dormant assets scheme. The extra £880 million available as a result is welcome. The scheme has already delivered £745 million for social and environmental initiatives. By expanding the list of assets that qualify for the scheme, up to £1.7 billion more could be available for use.
I draw the Minister’s attention to the remarks made about the Bill in the other place, although I am sure that he is aware of them. Peers wanted clarity on its potential costs and more detailed impact assessments for the expanded scheme. Baroness Barker specifically warned that these details were important, so the scheme does not become a
“piggyback fund for government when times are tough.”—[Official Report, House of Lords, 26 May 2021; Vol. 1039, c. 812.]
SNP Members welcome the Labour party amendment proposing an annual assessment of the health and governance of authorised reclaimed funds; this will, I think, help to assuage Baroness Barker’s concerns. Also, as a principle, the more scrutiny is given to this legislation, the better it will function.
It is good, of course, to see that the Bill makes some changes to distribution in England. Now the Secretary of State will have more freedom to spread assets through secondary legislation. That allows England to catch up with Scotland, which already has such an ability. As Lord Triesman highlighted in the other place, it was the example set by the devolved nations, whose innovative thinking in how they spend the funds allotted to them, that provided the impetus for the expansion of the scheme that the Bill presents. What the pandemic has shown is that the needs of the population can change dramatically and suddenly. Flexibility in secondary legislation is a useful tool to deal with that, and we must continue to ensure that there is adequate scrutiny.
We welcome the requirement for the Secretary of State to launch a public consultation and to consult the national lottery. The Community Fund must always be consulted before replacing or changing an order. However, it may be desirable to expand this consultation beyond the national lottery Community Fund and to include devolved Ministers responsible for spending in their nations, and representatives of the voluntary and social enterprise sectors.
It is reassuring to see that the expanded scheme will focus on reuniting owners with their dormant assets. With the expanded range of qualifying products, it is estimated that £3.7 billion-worth of products are lying dormant. For all the good that the schemes do for various charities, it is of the utmost importance that people are reunited with their assets. With the elderly and the vulnerable, especially those without digital skills, among those most likely to lose access or connection to their accounts in an increasingly digitised world, reunification efforts are more important than ever. That is why the SNP welcomes the enhanced tracing and verification measures, which could lead to £2 billion being returned to members of the public.
I thank all right hon. and hon. Members for their contribution to the debate and for the constructive way in which everyone has engaged with the Bill throughout its passage. I thank in particular those who have spoken this evening. My hon. Friend the Member for Devizes (Danny Kruger) has made his points about community wealth funds frequently and passionately, as have the hon. Member for Sedgefield (Paul Howell) and the right hon. Member for Kingston upon Hull North (Dame Diana Johnson), whom I will acknowledge again later. I can confirm for the hon. Member for Strangford (Jim Shannon) that the expansion will cover Northern Ireland. My hon. Friend the Member for East Surrey (Claire Coutinho) again spoke passionately about the impact that dormant assets funding will have on local communities. We should never forget that.
The hon. Member for Ochil and South Perthshire (John Nicolson) mentioned the principle of additionality, as did my opposite numbers on the Labour Front Bench, the hon. Members for Pontypridd (Alex Davies-Jones) and for Manchester, Withington (Jeff Smith). That principle underlies the Bill absolutely and completely. Regarding expansion, the Secretary of State is to conduct periodic reviews—within three years and then again in five years. The hon. Member for Ochil and South Perthshire mentioned that Scotland currently operates on a different basis, and that is one of the reasons why we have sought to expand where dormant assets money can be used.
I particularly thank my opposite numbers on the Labour Front Bench for their constructive contributions. Throughout, we have agreed on the principles. It is nice and good to see a Bill through its various stages with such a degree of consensus. Although we sometimes disagree on elements of detail, on the Bill’s overwhelming purpose and underlying principles there is complete agreement, and I appreciate the constructive way they have engaged with me.
However, I am afraid we do not believe that new clause 1—a proposal we debated in Committee—is necessary, largely on the basis that there is considerable oversight already, as I have explained before. Although the new clause refers to “authorised reclaim funds”, in practice it refers specifically to Reclaim Fund Ltd, as it is currently the only authorised reclaim fund in the United Kingdom. RFL publishes its audited annual reports and accounts on its website annually. In 2019 the Office for National Statistics classified RFL to the central Government subsector, and in April 2021 it therefore became a Treasury-owned arm’s length body.
Now that RFL is an ALB, Parliament has greater oversight of its operations and financial information. RFL has been consolidated into HM Treasury’s accounts, which are laid before Parliament on a yearly basis. Furthermore, it is standard practice for the annual reports and accounts of ALBs, together with any report from the auditors, to be laid before Parliament by the sponsor Department. That will happen for the first time this year.
Parliament will therefore have the opportunity to view RFL’s full statutory accounts and, like all ALBs, RFL cannot publish its accounts until they have been laid before Parliament. The Comptroller and Auditor General, operating through the National Audit Office, will audit RFL’s accounts from financial year 2021-22. The Government do not recognise a need for bespoke arrangements under the Bill, as Parliament already has greater oversight of RFL’s operations and financial information. I assure Parliament that the Treasury has a robust governance structure in place that ensures that it has oversight of any potential risk of insolvency. For those reasons, I ask that the House does not support new clause 1.
Government amendment 1 is a minor and technical amendment that will ensure that the principle of full restitution continues to be upheld, ensuring that people can reclaim the amount they would have been owed had the transfer to the scheme not happened. It clarifies that money derived from collective scheme investments cannot be transferred into the scheme as client money.
Unfortunately, this amendment will have the effect of excluding collective scheme investments held by investment platforms and ISA fund managers from the scheme at this time. Bringing them into scope would require complex technical work, and we are working with the industry to understand if and how that can be accomplished in future under the power to extend the scheme through regulations.
Finally, Government amendment 2 responds to a key theme in the debates over community wealth funds, on which there has been considerable discussion this evening. It is testimony to the cross-party support for the scheme and the Bill that this issue has been talked about so much. I am very grateful for the spirit of positive collaboration that has been shown throughout the Bill’s stages. It is in that spirit that we are placing in the Bill our commitment to consult on community wealth funds.
I especially thank the right hon. Member for Kingston upon Hull North and my hon. Friend the Member for Sedgefield, the co-chairs of the APPG for “left behind” neighbourhoods, for helping the Government reach this shared position, as well as all those who have made representations. In her speech, the right hon. Lady spoke about creating opportunity, aspiration and inclusivity. I assure her that that is the instruction from my Secretary of State every single day in the Department—it is absolutely what we are here to do.
We have heard both here and in the other place of the many benefits of a community wealth fund model. The Government are committed to giving this important cause its due consideration. Amendment 2 will ensure that the consultation, which will launch as soon as possible following Royal Assent, must include CWFs as an option, along with the current causes of youth, financial inclusion and social investment, which have had widespread support over the past decade.
I understand that there have been concerns that the consultation process will cause undue delays to the money being released. Let me assure hon. Members that that will not be the case. The consultation will not delay the release of funds; rather, it will run in parallel with other necessary preparations.
Once again, I thank colleagues on both sides of the House for the constructive and collaborative debate today. For the reasons I have outlined, I ask that the House does not support new clause 1 and supports the Government amendments.
I wish to put on the record my thanks to hon. Members. I am encouraged by our collegiate debate, in stark contrast to the scenes on the Floor of the House earlier today. This evening’s debate shows that Parliament is at its best when we all work together across parties to deliver for our communities. More needs to be made of what we can do when we choose to work together.
As I mentioned, it was a Labour Government who first advanced legislation to place dormant assets from bank and building society accounts into the reclaim fund after significant efforts were made to contact the owners of those assets. For this reason, we are broadly supportive of the Bill and its main aims to expand the scheme. We therefore continue to welcome attempts to incorporate a commitment to community wealth funds, which have the potential to support communities across the nation that have been left behind in recent years.
The Minister knows that Labour Members outlined our concerns at length in Committee and on Report, and my colleagues and I made particular reference to some of the flaws in the Bill that we ultimately sought to correct. It is therefore somewhat disappointing that our concerns on the health and governance of the reclaim fund have not been taken on board, particularly as transparency and scrutiny are such essential facets of our work in this place.
In Committee, the Minister argued that Reclaim Fund Ltd is
“responsible for determining the appropriate proportion of funding that it can prudently release… The amount that RFL reserves for future repayment claims is…based on actuarial modelling and assessment of…risk factors, following guidance from the Financial Conduct Authority.”––[Official Report, Dormant Assets Public Bill Committee, 11 January 2022; c. 34-35.]
Of course, independence from the Government is vital but it is also important that the Secretary of State makes a regular assessment if this fund is to be available for future generations. I sincerely hope the Minister will take on board our concerns and discuss with the Secretary of State, who is in her place, and departmental colleagues the potential for an annual report, which would be extremely beneficial for those who rely on funds from this important scheme.
Although Labour supports the Bill, we believe the Government have missed several opportunities. I urge the Secretary of State to speed up the timetable to allow for these much-needed funds to reach the communities that need them most. I look forward to closely following the development of the first public consultation. I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
Transfer of eligible client money to reclaim fund
Amendment made: 1, page 12, line 9, at end insert—
“(4A) The reference in subsection (4)(b) to money that could be transferred as mentioned in section 8(1)(a) includes money held by an investment institution that is not within the definition in section 8(3) which—
(a) is proceeds of the conversion by the investment institution of a collective scheme investment into a right to payment of an amount, and
(b) could, if it were held by an investment institution falling within section 8(3), be transferred as mentioned in section 8(1)(a).”—(Craig Mackinlay.)
This amendment clarifies that money held by an investment institution not within clause 8(3) is not client money if it is the proceeds of a conversion to cash of a collective scheme investment and would be capable of being transferred to a reclaim fund if the holder was an investment institution within clause 8(3).
Distribution of dormant assets money for meeting English expenditure
Amendment made: 2, page 22, line 21, at end insert—
“(3A) In carrying out the first public consultation under subsection (3)(a) the Secretary of State must invite views as to whether the permitted distributions should be, or include, any one or more of the following—
(a) distributions for the purpose of the provision of services, facilities or opportunities to meet the needs of young people;
(b) distributions for the purpose of the development of individuals’ ability to manage their finances or the improvement of access to personal financial services;
(c) distributions to social investment wholesalers (within the meaning of section 18);
(d) distributions to community wealth funds.
(3B) For the purposes of subsection (3A) “community wealth fund” means a fund which gives long term financial support (whether directly or indirectly) for the provision of local amenities or other social infrastructure.”—(Craig Mackinlay.)
This amendment requires the first public consultation under section 18A to include the options of permitting the English dormant asset money distributions currently permitted by section 18(1) and distributions to community wealth funds, whether or not in addition to other permitted purposes or recipients.
Bill read the Third time and passed, with amendments.
Business of the House
That, at this day’s sitting, the Speaker shall put the Questions necessary to dispose of proceedings on the motion in the name of Mr Jacob Rees-Mogg relating to the Independent Parliamentary Standards Authority not later than one hour after the commencement of proceedings on the motion for this Order; such Questions shall include the Questions on any Amendments selected by the Speaker which may then be moved; proceedings may continue, though opposed, until any hour, and may be entered upon after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Craig Mackinlay.)