Dormant Assets Bill [Lords] — House of Commons, 2021-12-06
Topic: Domestic Commerce
Julian Carlton Knight (Conservative, Centre-right): I declare an interest as chair of the all-party parliamentary group on financial education for young people. Several key supporters of the APPG have benefited from the dormant assets scheme, in which I know my hon. Friend the Economic Secretary to the Treasury takes a keen interest. His has often been a lone voice in the wilderness when it comes to financial education for young people, and we are grateful for his support It would be fair to say that the current dormant assets scheme has far exceeded expectations since the passage of the Dormant Bank and Building Society Accounts Act 2008. I was a financial journalist at the time, and I well remember that it was seen as revolutionary but relatively small-scale—a staging post. The then Government thought it would raise about £400 million, but it has raised £800 million. I also remember that there were a lot of questions about exactly how it would be brought about, how fair it would be and whether people would get their money back There were also questions about whether people would find their money was just taken, whether it would be an example of the state effectively piling into people’s lives, but we have seen a huge amount of fairness. No one can complain—even those from 1864 who lost money from their National Savings and Investments account have not come forward to say they have been mistreated in that respect I have seen in my constituency the huge amount of good this scheme has done. Ordinary Magic, a group based in Shirley, received £60,000 through the fund this year, and it is providing support to local children—we know from the tragic events this weekend exactly how welcome this is in my community—who are suffering from mental health conditions by providing psycho-education workshops to teach parents how to enable their children to get through these difficult times and difficult situations. It also provides personal, social, health and economic education sessions in schools, enrichment holiday clubs and breaks for children and carers, which is hugely important As Chair of the Digital, Culture, Media and Sport Committee, I believe it is incredibly important for our young people, particularly those living among some of our most deprived communities, to have access to the performing arts. I make reference to the Citizens Theatre, based in Glasgow, which is fantastic in its outreach. I know for a fact that it goes out into the local community; I believe it even tries to recruit young actors in chicken shops, cafés and other such places. The distribution of the dormant assets scheme is therefore providing enrichment experiences that young people in Glasgow need to expand their confidence and explore their identities through the stage. That would not be the case had it not been for this legislation, which has cross-party support However, I believe we have a major disparity in the existing system, whereby the devolved Administrations have more flexibility in how the dormant assets funding is distributed in comparison with England, where the funding is restricted to groups promoting financial inclusion—obviously, I have an interest in those—and social investment. While financial inclusion and social investment charities both do important work, it is only right that we widen our funding distribution here in England as well That is why I support the Bill before the House. Under this legislation, the Government will be in a position to increase the flexibility on how funding is allocated over time. As they see the money come in, they will be able to suit the distribution of those funds accordingly and be able to bring about real change. That is to be done through amending the Dormant Bank and Building Society Accounts Act 2008, allowing the Government to set out additional clauses through secondary legislation. It will thus be subject to a departmental consultation in the public domain, which is important, and will need the support of hon. Members through parliamentary approval, as per usual Supporting this change by approving the legislation before us will allow the Government to bring themselves in line with our devolved Administrations, so they can set their distribution priorities through secondary legislation. According to the Association of British Insurers, which I understand is backing the Bill, it is estimated that £2.1 billion currently sits in dormant insurance and pension products. Let us just think of the life-affirming, life-changing effects that that £2.1 billion, if correctly and safely distributed with the right to reclaim, could have on our communities across the country I concur with my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) in his ambition for community banks. I also place on the record my thanks to those within banking and financial services who work tirelessly year in, year out to reconnect dormant assets with their customers. They really do not give up—even with the case in 1864 with National Savings & Investments, they are probably still writing letters. Indeed, I know the sector invests millions each year in reuniting customers with their money. However, despite some of their best efforts to reconnect dormant assets with the customer, sometimes we know it is simply not possible. That said, with the greater move to online banking, customers should be in a far better position to keep track of their finances and securities Finally, it is welcome that, following the Government’s public consultation in July 2020, the existing scheme will be expanded to include assets from the insurance, pensions, investments, wealth management and securities sectors. This step will pump even more funding into the dormant assets scheme, in turn supporting some of the most innovative and inspiring work in the third sector As the hon. Member for York Central (Rachael Maskell) stated, we know the charity sector has had an incredibly difficult pandemic; £750 million was hugely welcome, but the total shortfall across the sector was £4 billion. Let us hope that some of the redirected resources from this scheme can go towards that third sector, to ensure that they can continue the work they do.