HM TREASURY News
Release (121/07) issued by The Government News Network on 8 November 2007
Kitty Ussher today welcomed the publication of the Dormant Bank
and Building Society Accounts Bill, which will allow money lying
dormant in banks and building societies to be reinvested in the community.
The Bill, which forms part of a wider unclaimed assets scheme,
received its first reading in the House of Lords yesterday.
Kitty Ussher said:
"Where there is money lying dormant in the banking system,
our first priority is to reunite it with its owners. Where
that's not possible, this Bill enables the assets that remain
unclaimed to be reinvested for the benefit of communities, and
used to help fund facilities for young people in every
constituency in England.
"The Bill protects consumers, by ensuring that they will be
able to reclaim their money at any time and can continue to deal
with their bank directly to reclaim their money."
Following consultation a dormant bank account was defined as one
where there has been no customer-initiated activity for 15 years.
As part of the wider unclaimed assets scheme, the industry and
their representative bodies will launch a drive to reunite account
holders with their lost accounts. If the account holder cannot be
found, the money will be transferred to an FSA-regulated central
reclaim fund, which will hold back money should people later come
forward to reclaim their accounts. Money held in the fund can then
be used to pay account holders their money with the interest owed.
The rest of the money will be reinvested in the community, with
the focus in England on funding youth services, particularly
places for young people to go, financial capability, financial
inclusion and, resources permitting, social investment. The Bill
allows Ministers in the Devolved Administrations to determine the
distribution priorities in their areas.
Minister for the Third Sector Phil Hope said:
"I am delighted that this legislation will enable unclaimed
assets to be reinvested in society and will help the third sector
contribute even more to our society, economy and environment.
"Where unclaimed assets will be directed towards activities
for young people, and where they will be invested to help people
manage their finances, and, resources permitting, used to boost
the social investment market, I know that third sector
organisations will be at the heart of this reinvestment."
Legislation will allow resources to be distributed on a UK-wide
basis by the BIG Lottery Fund. This will help to ensure a
coordinated, transparent and effective allocation of funds, by
building upon the BIG Lottery Fund's existing UK-wide
infrastructure and expertise. Dormant account assets will be
separate and distinguishable from lottery resources and managed as
a distinct funding stream. Using BIG is an efficient way to
distribute the assets and will limit spending on administration,
meaning that as much money as possible reaches the front line.
Alongside the Bill, the Government also published its response to
two consultations on the unclaimed assets scheme.
NOTES FOR EDITORS
1. Copies of the Dormant Bank and Building Society Bill and
explanatory notes for the Bill are available at: http://www.publications.parliament.uk/pa/pabills.htm
2. The 2005 Pre-Budget Report set out that the Government had
taken the view that the time had come to put in place an unclaimed
assets scheme in the UK.
3. The banking industry and their representative bodies have
indicated that they will announce their plans for a reuniting
4. The Treasury has held two consultations on the development of
an unclaimed asset scheme. The first, A UK Unclaimed Asset Scheme:
a consultation, was published in March 2007, and details the
proposed mechanics of an unclaimed assets scheme. The consultation
document is available at: http://www.hm-treasury.gov.uk/consultations_and_legislation/unclaimed_assets/consult_unclaimedasset_index.cfm
5. A second consultation Unclaimed assets distribution mechanism:
a consultation was published in May 2007 and identified where
money from dormant accounts would be spent in England. The
consultation document is available at: http://www.hm-treasury.gov.uk/consultations_and_legislation/unclaimed_assets/consult_unclaimedassets_distribution.cfm
6. The Government response to both of these consultations is
published today. This document is available at: http://www.hm-treasury.gov.uk/consultations_and_legislation/unclaimed_assets/consult_unclaimedasset_responsesummary.cfm