Dormant Assets Bill [HL]

Lord Bassam of Brighton Excerpts

Committee stage
Wednesday 23rd June 2021 Grand Committee

[Lord Bassam of Brighton (Lab) [V]]

My Lords, I make it clear at the outset that I am very supportive of the amendments tabled by the noble Lord, Lord Hodgson—first, his amendment on transparency, which was usefully preambled in our debate two days ago, and secondly, his amendment relating to a call for the Secretary of State to include the establishment of a so-called community wealth fund in an order under new Section 18A of the 2008 Act.

Labour supports, of course, the principle of putting additional funding into the hands of local communities. Our experience, rather like the noble Lord’s, is that those things are best left local: communities need social capital support to ensure that they work with the charitable interests to achieve the objectives of many of those locally and nationally based charities. The Local Trust and the Community Wealth Fund Alliance have made a strong case in their briefing notes, and we recognise that there is broad-based support for this proposition right across the sector.

The idea of community wealth funds is not new, but the case for long-term and locally focused investment has become even more compelling in the light of the Government’s levelling-up agenda and of events during the Covid-19 pandemic. Our Amendment 56 would make a small but potentially significant tweak to the noble Lord’s proposed text, in that it specifies that new National Lottery community funds should operate independently of National Lottery structures. We appreciate, of course, the good work that the National Lottery Community Fund does across the country, but we saw the arrival of the Bill as an opportunity to debate additional methods of disbursing money to the communities that need it.

The alliance behind the community wealth fund proposal have given it a great deal of thought, and have undertaken research on how best it would work and how a system could be made operational in practice, with neighbourhoods empowered to create a positive community vision, and given time to deliver the change they seek.

There is a range of evidence from Britain and across the world that giving communities a proper stake in local spending decisions produces far better results than imposing schemes from the top down. As with our previous debates on the asset clauses, we should not be confined by how things have been done in the past. Instead, we argue that we should seize opportunities to try new approaches.

I have little doubt that the Minister will say that there is not yet strong enough evidence for the Government to support this approach. If that is the case, would the DCMS be prepared to fund pilot studies in a small number of communities across England, to gain more data? The noble Lord, Lord Hodgson, in a sense, alluded to that. Perhaps we should consider a pilot approach, before bringing into play the full effect of a community wealth fund clause in, or an amendment to, this legislation.

That would be a practical and pragmatic approach and would garner support, but we obviously want to listen to what the Minister has to say on this. We will be more than happy to discuss with her and colleagues across the House how we can make this work because, like the noble Lord, Lord Hodgson, I think that it is a winning idea that would genuinely empower local communities.

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[Baroness Bowles of Berkhamsted (LD) [V]]

My Lords, as relatively few of us are speaking on this group, I follow straight on from my noble friend Lady Kramer. Unsurprisingly, I agree with everything she said. She has been putting her finger on quite a few weaknesses and gaps that appear in the Bill. We are all concerned to make sure that the money available does additional good work. It should not be used as an excuse by the Government to put in less than they would have otherwise, so that they do not take it into account by thinking they do not have to do quite so much because a top-up might come along from the dormant assets fund.

On that point, I am also curious as to what “unlikely to be made available by Government” means. It is hard to free one’s mind from the concern that the Government will somehow take account of this pool of money as a back-up, no matter what they say. Indeed, on Monday my noble friend referenced the money put in for Covid purposes and said that it was muddying the waters. The fact that the Government are prepared to recite it altogether means that they are taking it into account in some kind of bigger picture. It is hard to escape that point of view. The last thing we want is for there to be a pattern of cuts, followed by replacement funding.

In debate on the first group of amendments, the Minister said that the funding was intended to achieve maximum impact. That really means that it has to be doing things that would not otherwise be done or things that were previously being done, but from which the Government have decided they can withdraw. I am not saying that it cannot be used for that in extremis if the need is so great, but that cannot be the pattern that we allow. As my noble friend said, it would essentially mean that the money was in one way or another replacing taxation.

We debated this on Monday and, as my noble friend Lady Kramer also said, we have talked about reports and reviews. It is important to show how the money has been spent, and to show additionality—in other words, to show that there is clear water between the use of the funds and what the Government do. Perhaps this is a bit of a conflation of ideas but if things like community wealth funds might be going in at a different level, it could mean that they were more isolated from the risk of becoming replacement funding, in places where the Government have pulled out. This would be new funding.

We need something more in the Bill, unless the Minister can explain categorically that that idea is there. She may make statements about how the spending will be used but it would also be good, in the context of a review clause, to ensure that there is a review to find out whether things have actually happened that way, regardless of the original intention.

[Lord Bassam of Brighton (Lab) [V]]

My Lords, we are grateful to the noble Baroness, Lady Kramer, for tabling Amendment 60, which touches on an issue raised by many on Second Reading. I thought I heard the Minister, who has been extremely courteous throughout these proceedings, mention the Government’s intention to treat funds from dormant assets as additional to what is distributed through the other distributing bodies fed from the National Lottery.

The inclusion and identification of new dormant asset proceeds is welcome. I acknowledge the earlier commitment that these funds will remain additional, rather than replacing other types of financial help; that is extremely important. The noble Baroness, Lady Kramer, has laid out the case well. There is consensus that we do not want funding of this nature to be replacement funding for mainstream government financing programmes.

If it is really the Government’s intention that this money should be used on top of other funding sources, I ask the basic, simple and fundamental question: where is the harm in the Government accepting this amendment? If they did, there would be a clear statement of policy intent, giving a clear direction on the face of the Bill. If the Minister says that the Government cannot do so, I shall be extraordinarily disappointed. However, I would be more than happy to work with colleagues across the House on this—and with the Government themselves, if they are not content to accept the amendment—to bring forward an alternative to the text in this amendment on Report. There probably is consensus that that would be the right thing to do.

Another important factor to bear in mind is that dormant asset funding will grow only as we find new dormant assets that can be used for charitable purposes. In no way should they be seen as an alternative source of funding, replacing government mainstream funding. For that reason, it would be right to put a commitment in the Bill, as a statement of principle, so I am more than happy to support the noble Baroness’s amendment.

[Baroness Barran (Con)]

My Lords, as we have heard, Amendment 60 in the names of the noble Baronesses, Lady Kramer and Lady Bowles of Berkhamsted, seeks to confirm the principle of additionality. As I noted at Second Reading and during Monday’s debate, and as the noble Baroness, Lady Kramer, also noted, the principle of additionality is set out in Schedule 3 to the 2008 Act and will continue to be a core principle of the scheme. The Act describes additionality as

“the principle that dormant account money should be used to fund projects, or aspects of projects, for which funds would be unlikely to be made available by … a Government department”

or devolved Administration. The Bill does not alter the part of the 2008 Act in which the principle is defined, which affects all of the UK as opposed to just England.

The noble Baroness, Lady Kramer, asked to whom the principle applies. It applies to the National Lottery Community Fund, as she rightly said, not the Secretary of State in DCMS. That is because the National Lottery Community Fund is the main distributor of the funding and the accounting officer for the dormant asset funds, so there is also a read-through to the spend organisations on additionality, which I think was implicit in her remarks.

I absolutely respect the noble Baronesses’ and other noble Lords’ wish to get real clarity on what we mean by this principle but I hope that noble Lords will, on reflection, agree that the current definition gives a useful degree of flexibility. At one end of the spectrum, there are social and environmental causes that are clearly for government to fund, but, as the Covid pandemic has shown, there are areas in the economy that most of us would never have expected to receive government funding that have now received it, for example the furlough scheme. So we have flexibility depending on pandemics and other economic circumstances on where government funds, and that is well captured in the definition as we have it.

I propose to provide a couple of example of how the additionality principle has worked to date. I do not intend to be comprehensive but to show how it has worked in practice because I think that concern that it could in some way be departed from was behind a number of your Lordships’ comments, and I hope to reassure them that that is absolutely not the case.

The most obvious example of the principle is that it allows the scheme to fund something that would normally be seen as outside the scope of government intervention. A good example of that was the creation of the world’s first social investment wholesaler, Big Society Capital, which used a combination of dormant assets and leveraged private co-investment to make it happen. As another example, the principle of additionality could enable dormant assets funding to test interventions and gather evidence that could then be used as a model for other funders. For example, Big Society Capital and its associated fund managers have worked for a long time on homelessness using innovative social investment.

European Football Championships: Travel

Lord Bassam of Brighton Excerpts

Monday 21st June 2021 Lords Chamber

[Baroness Barran (Con)]

We are looking at all the elements that my noble friend mentioned, and our goal is that UEFA is able to meet the terms of its contractual agreements and that we are able to host a very successful and safe games.

[Lord Bassam of Brighton (Lab) [V]]

My Lords, many thousands of fans have tickets for the games at Wembley. Business supply chains and workers have been preparing for them for a long time. Perhaps UEFA should remember that it was the passion of fans in this country in particular that saw off the threat of the European Super League. To repay the favour by removing games would be a pretty disgraceful betrayal. Many traders will use this as a first opportunity to open up. What considerations are the Government giving to supporting traders should these games end up being relocated? Furthermore, what thoughts have the Government had about the balance between fans and organiser sponsor interests, in the light of the threat of moving the final somewhere else? Can we have an update on this work as an aspect of the fan-led review?

[Baroness Barran (Con)]

As the noble Lord knows, the fan-led review is separate from today’s topic of discussion. With regard to support for traders, the Government’s generous cross-economy package continues through to September, as he is also aware.

Dormant Assets Bill [HL]

Lord Bassam of Brighton Excerpts

Committee stage
Monday 21st June 2021 Grand Committee

[The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)]

Lord Bassam of Brighton? I think he may have muted his equipment. Can he unmute?

[Lord Bassam of Brighton (Lab) [V]]

My Lords, I apologise. I apologise doubly for being late and for failing to unmute.

I missed the Minister’s explanation as she introduced this group, but a few points occur to me. There are some 20-plus issues tied up in these technical amendments and clarifications. That is a lot and, while I am very grateful for the text explaining them, there are some fairly substantial issues here. My attention was drawn to government Amendment 17, which applies a new clause in the case of a wound-up unit trust scheme or a terminated sub-fund of an umbrella unit trust scheme. It sounds awfully complex, actually; it may well be technical, but I do not fully understand exactly what lies behind the wording.

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Moved by

[Lord Bassam of Brighton]

4: Clause 1, page 2, line 26, at end insert—
“(5A) Additional assets may be added to the scheme using powers under section 19, including where this is recommended by a report laid under section (Requirement to review the operation of the dormant assets scheme).”Member’s explanatory statement
This amendment makes clear that the list of assets in Clause 1(5) may not be exhaustive, given the existence of the Clause 19 power and the Government’s commitment to keep included asset classes under review.

[Lord Bassam of Brighton (Lab) [V]]

My Lords, this amendment is grouped with others that will have a similar effect, which is to secure reports on the operation of the dormant assets scheme. I think that we are all fishing in the same pool here. We all want the same thing and it is always nice to be able to agree with colleagues across the piece on something such as this.

We need periodic reviews. My amendment seeks to have the first periodic review after two years and subsequent reviews every five years thereafter, and I think that there is a degree of consensus that that is desirable. Why do we want to do that? Well, clearly, it makes sense; we need to know what other dormant assets can be released into the fund and how they are consulted on when they are brought forward. We also need to ensure that mechanisms work properly and that any new additions are sufficiently worked out. That is the purpose behind the amendment.

We also need to know why other fund that are dormant are not being released—in particular, I guess, some of the pension funds. I know that concern was expressed about that at Second Reading, because many of us see dormant pension funds as having a lot of potential. I know that the Government said that the dashboard was not yet ready or bedded in, but we could use periodic reviews to ensure that we are regularly updated on this.

So, very simply, that is my introduction to this amendment. I am sure that there will be a degree of consensus in the Committee on this issue, and I hope that the Minister can be positive about it and that, between now and Report, between us we can fashion amendments to the Bill that give expression to that consensus and that the Government can be happy with as well. I am more than happy to talk to other colleagues about this, so that we get it right, because ensuring that we have regular and periodic reviews is important, as it will build up trust in the legislation and across the sector that will benefit from this. I beg to move.

[Lord Davies of Brixton (Lab)]

My Lords, I really do not have anything extra to add to my noble friend Lord Bassam’s comments. The proposed clause is about a review of the functionality of the scheme, so it does not really get to the issues that I referred to earlier, so I think that I will leave it there. I am happy to support the amendment.

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[Baroness Barran (Con)]

I thank the noble Lord for his additional questions. He talked about other ways of spending the funds. I was talking about other causes; I am not sure whether we are using different words for the same thing. In the consultation that we are proposing, we will invite the public to name the issues they care about on which these funds should be used—the aim being to have that in secondary rather than primary legislation to make it a bit more flexible—as opposed to using different types of spend organisations. I was referring to the causes on which that will be spent.

I think that issues of additionality are likely to come up quite frequently, particularly on Wednesday, when we debate some of the other amendments. Perhaps we can take that issue in the round then, if the noble Lord is agreeable.

[Lord Bassam of Brighton (Lab) [V]]

My Lords, the noble Baroness, Lady Kramer, said it all, in the sense that this has been an extremely wide-ranging debate covering many topics, even though, as I said at the outset, we are fishing in the same pool here looking for a form of review. I thank the Minister for her very full, detailed and thorough response. I will have to read it carefully before deciding what to do about this subject area on Report.

I also thank her for the opportunity she has afforded us through her response of meeting and considering what other ways there may be to look at the impact of the dormant assets review and how we can best formulate it. I think she was inviting us to subscribe to an amendment that covers that point, but I am not sure yet. I look forward to having that discussion with her.

It is perhaps worth reflecting on comments that colleagues made. The noble Baroness, Lady Noakes, knows that I agree with her that there is not much point bringing forward amendments that lead to pointless reports unless those reports have an action at the end of them. That is why my amendment in particular calls for a review with the purpose of leading to something. That is why it is important that we have an early review. The noble Baroness, Lady Bowles, asked for a review now. “Now” may be in two years’ time after the Bill has passed—that would be about right—and periodic reviews thereafter.

The good thing about this legislation is that flexibility is brought into it. Although at the moment it is limited to financial products, in her response the Minister did not seem to rule out entirely that it might be extended to cover non-financial products. I liked the noble Baroness, Lady Noakes, looking at things such as Oyster cards, gambling winnings and utility accounts. At Second Reading I raised that assets from criminal activity might be brought into the scheme. That is perhaps going a bit far at this stage, but we are all looking at ways in which we can expand dormant assets so that they can be used for a broader social purpose.

The noble Lord, Lord Hodgson, was right to ask whether the powers are sufficient at the moment. I want to be confident that is right. As the Minister acknowledged, the Oversight Trust is very much in its early phase of development, though clearly it has done some important and valuable work so far.

The Minister said that transparency could be guaranteed through a number of routes: the RFL, Select Committees and post-legislative scrutiny. That is true—there is no doubt that those routes are available—but one of the reasons I am keen to see a review process built into the legislation is that we need to have that review in one place so that we can look across the piece in a more coherent and cohesive way, decide whether the dormant assets are having impact, determine whether there are other financial and non-financial assets that could be brought within its scope and see that there is a degree of transparency about the way in which the legislation is operating. That is why I am keen to see a review process.

The noble and learned Lord, Lord Etherton, made a good point about the need to look at the derivation and application of funds: where from and why? That is really part of the thinking behind my amendment and, I think, other amendments in this group.

We have had a very good discussion on this. It is an important part of the legislation. I welcome the Minister’s offer of some discussions and restate my intent to bring back an amendment that captures the best of the other amendments and brings them to bear on how we move forward in reviewing how this legislation works. I am grateful to everybody for their interest and support on this. I beg leave to withdraw my amendment.

Amendment 4 withdrawn.

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[Baroness Kramer (LD)]

I have nothing to add. I looked at the amendments and they all seem to make technical sense to me.

[Lord Bassam of Brighton (Lab) [V]]

My Lords, I have nothing to add except that government Amendment 12 is described as a “verbal error”. I am not quite sure that you can have a verbal error in a piece of written legislation; perhaps the Minister can help us with that one.

[Lord Parkinson of Whitley Bay (Con)]

I am grateful to the noble Baroness and the noble Lord for their support and brevity. As I said, these are minor amendments.

The noble Lord, Lord Bassam, alighted on “verbal”. I changed that word in my opening to this short debate to “terminological”; I hope he agrees that that is a bit clearer. Either way, I hope he sees that it is de minimis.

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[Baroness Kramer (LD)]

My Lords, I will again be brief but I went nearly mad trying to track some of these amendments through. I accept that they are consequential but I have one question. FSMA 2000, an Act with which I have spent far too much of my life, will—after these amendments—now use the phrase “unwanted asset money”. Are the Government comfortable that we do not have a problem with the word “unwanted”? There is a difference between dormant money and money that is unwanted. We all know that the reclaim process is critical but I want to be sure that we have not got ourselves into any tricky corners with all of that. That is my only comment; the intent is obviously consequential.

[Lord Bassam of Brighton (Lab) [V]]

My Lords, I too am broadly satisfied with this collection of amendments, although they raise some questions about the initial drafting. I made a point about that at the outset of this afternoon’s deliberations. I just wonder why we have to amend the definition of “third party” by government Amendment 47. Also, what is not right—this is in government Amendment 49—with the definition of “repayment claims” that requires amendment? Perhaps the Minister could help us with that.

[Lord Parkinson of Whitley Bay (Con)]

Again, I am grateful to the noble Lords for their support, particularly given the large number of amendments, albeit small ones. To answer the question of the noble Baroness, Lady Kramer, the use of “unwanted asset” is the intended terminology. “Unwanted” is different from “dormant”.

On the question raised by the noble Lord, Lord Bassam of Brighton, if he will forgive me, given the speed of progress on this group, it might be better if I make sure that I have understood it and write to him with a full answer so that he has that before Report. With that, I commend these amendments to the Committee.

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[Baroness Kramer (LD)]

My Lords, I very much support everything that has been said so far, and I hope that we will get some clarity. Value for money is critical when we are dealing with these kinds of organisations.

I decided I would take a quick look at the financials of Reclaim Fund Ltd—which does not take very long as they are not hugely detailed—and the number that knocked me over and made me very concerned that value for money was definitely on the agenda was the remuneration of the chief executive. They may be an absolutely stellar individual and I would not wish in any way to criticise the individual personally but, according to the numbers I was looking at, there are 12 employees of Reclaim Fund Ltd, one of whom is the chief executive himself, and the chair. The median CEO salary in 2019 at the largest 100 charities was £155,000 a year, but in 2020 the chief executive of Reclaim Fund Ltd earned £217,000, if I add up simply salary and performance-related pay and leave out the pensions stuff. It struck me as prima facie rather out of line. Making sure that there is an audit that takes value for money into account would certainly give us all much more confidence that these issues were being handled appropriately. I fully understand that, as the asset base expands, there will be more complexity, so maybe there is a changing situation. But the 2019 pay packet was similar and I want to make sure that the appropriate body is focused properly on these issues and that value for money sits right at the front of the audit responsibility.

[Lord Bassam of Brighton (Lab) [V]]

My Lords, it is always nice to be able to agree with the noble Baroness, Lady Noakes. We have crossed swords many times, but I very much share one thing in common with her, and that is a desire to have an absolutely laser focus on getting value for money. So I am very supportive of her amendment; it certainly goes to the right place. The noble Baroness, Lady Kramer, touched on the importance of that in drawing our attention to remuneration levels within Reclaim Fund Ltd.

We need to be assured that we are getting value for money. Getting the Comptroller and Auditor-General involved in looking at the Reclaim Fund Ltd is a valuable use of the time of that body, because we need to better understand how funds are being used and be reassured that the best possible value for money is being secured. After all, this is a very significant funding mechanism and we need to ensure that, as part of it, the Reclaim Fund Ltd operates to the best and highest of standards. My noble friend Lord Davies is right that we need to focus on issues such as efficiency and effectiveness of spend, so I am very supportive of the amendment moved by the noble Baroness, Lady Noakes.

[Baroness Barran (Con)]

My Lords, Amendment 50 seeks to provide a power for the Comptroller and Auditor-General, the C&AG, to examine the Reclaim Fund Ltd for its economy, efficiency and effectiveness in using its resources to carry out its functions—also known as a value-for-money assessment—and to lay the result of the examination before Parliament.

I will first address the question on RFL’s auditors that my noble friend Lady Noakes asked at Second Reading. As set out in the Government’s framework agreement with RFL, which has been published in the Libraries of both Houses, the C&AG will audit the company’s accounts. This will be possible because of the explicit agreement made between RFL and the Treasury for such an arrangement. I hope that my noble friend will feel that that is sufficiently clear.

I know that my noble friend was also anxious to confirm that both the value-for-money assessment and the audit would be carried out by the same body, so, to continue in that vein, the C&AG may also carry out value-for-money assessments of the Reclaim Fund Ltd in the way proposed in subsection (1) in my noble friend’s amendment. The C&AG can carry out value-for-money assessments of public bodies under the National Audit Act 1983. The Act enables the C&AG to carry out value-for-money assessments of a body if there is an agreement between the body and a Minister of the Crown that requires the body’s accounts to be examined and certified by the C&AG and that enables value-for-money assessments to take place. This is set out in Section 6(3)(d) and 6(5) of the National Audit Act. An agreement has been made between the Treasury and RFL that meets these conditions of the Act, and this arrangement is outlined in the RFL/Treasury framework agreement.

Value-for-money assessments can be undertaken under Section 6 of the National Audit Act in relation to many public bodies, including UK Asset Resolution, the British Business Bank and S4C, the Welsh language broadcaster, to name but a few. In future, the Comptroller and Auditor-General will be able to undertake value-for-money assessments in relation to RFL.

Section 9 of the National Audit Act 1983 enables the Comptroller and Auditor- General to report to the House of Commons the result of any value-for-money assessment carried out under Section 6 of the Act. So, the provisions in the Act, which as I have already explained are applicable to RFL, also make provision for the Comptroller and Auditor- General to bring the results of the value-for-money assessments to the attention of the House of Commons.

My noble friend picked up on the location of RFL’s offices in St James’s. My understanding is that this is the registered address of the company secretary and that RFL is actually based in Crewe. I hope my noble friend sees that as a more cost-effective, dare I say levelling-up, option.

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[Lord Bassam of Brighton (Lab) [V]]

My Lords, this useful set of amendments will help us to tease out the relationship between Reclaim Fund Ltd, Parliament, the Treasury, and the Government. My probing amendment is in a slightly different direction from those of the noble Baronesses, Lady Bowles and Lady Noakes, but they sit comfortably next to each other.

I want to understand what the oversight mechanism is and what will be available to Parliament in the event of Reclaim Fund Ltd requiring money from the Treasury. We have heard that this will never happen, which I am sure is quite right—with the reserve level set at 40% it is extremely unlikely—but I too believe in prudence in the management of funds, and I would like to understand what oversight Parliament will be given. We need a position where we can discuss and debate how it is working. Will that be through some kind of annual report to Parliament? Would oversight by Parliament be triggered in the circumstances of a particular use of funds? Can we perhaps see a situation where there is an annual debate about Reclaim Fund Ltd and how the money has been distributed so that we could test whether the 40% reserve is right?

Parliament needs to be in a stronger position here. These amendments take us in that general direction, particularly the clever one tabled by the noble Baroness, Lady Noakes, which would put the Treasury in the hot seat and ensure that we have a level of accountability enabling a regular look at how Reclaim Fund Ltd operates. I am looking forward to the Minister giving us not only some assurance but a guarantee that we will be able to see how the mechanism is working through a regular oversight session.

[Baroness Barran (Con)]

My Lords, before I turn to the detail of the amendments, I will respond to the question from the noble Baroness, Lady Kramer, about how Reclaim Fund Ltd invests its assets. The reserves are a mix between cash held at the Bank of England and an externally managed bond portfolio managed by Goldman Sachs asset management. All the assets are held to maturity. The portfolio is not actively traded to save on management fees and the portfolio follows environmental, social and governance principles. I hope that this comforts her or otherwise regarding the fund’s approach.

I turn now to the amendments. Amendments 51, 52 and 53 relate to Clause 27 of the Bill. These amendments seek to understand the oversight that Parliament will have over any loan that the Treasury provides to RFL, and intend to allow RFL to take into account the loan when considering its reserving policy. I will address the amendments together.

In recognition of RFL’s establishment as a Treasury non-departmental public body, the Bill introduces a new provision to provide that, in the event that an authorised reclaim fund is, or looks likely to be, unable to meet its reclaim liabilities, the Treasury would provide a loan to cover these liabilities.

On Amendment 52, from the noble Lord, Lord Bassam of Brighton, the Government agree that Parliament should have oversight of the Treasury loan. Parliament will already be sighted in respect of the loans made from the Treasury by virtue of this being recorded in its annual reports and accounts, which are laid before Parliament on a yearly basis. The terms and conditions of the loan will be set in line with usual Treasury practice, as set out in Managing Public Money. It would not be usual practice to provide the full terms of the loan, which may contain commercially sensitive information. Further transparency to Parliament is provided in the reclaim fund’s annual report and accounts, which, as we discussed earlier, are audited by the Comptroller and Auditor-General.

Amendments 51 and 53, tabled by the noble Baroness, Lady Bowles of Berkhamsted, and my noble friend Lady Noakes respectively, seek to understand the impact on RFL of a potential Treasury loan when setting its reserving policy. I will respond, first, by summarising the particular features that govern RFL’s reserving policy, and then turn to the implications on these of the Treasury loan. While the Government agree that as many dormant funds as possible should be channelled to good causes, we also fully recognise that the decision on how much money should be retained to meet reclaims should sit with RFL and not the Government. The RFL board is responsible for overseeing the process for changing the level of reserves, and RFL has confirmed that this is regularly revisited by the board.

I met recently with RFL. Following that meeting, I am satisfied that it follows diligent processes with respect to its reserving policy, which is based on an analysis of the relevant risk factors, actuarial modelling using both internal and independent actuarial advice, and Financial Conduct Authority guidance. This ensures that RFL can achieve its primary objective of meeting reclaims from owners at any time in the future. The fundamental principle that underpins RFL’s current approach to its reserving rates and investing policy is that it is required to meet reclaims in perpetuity. As your Lordships well understand, that makes it very different from, say, an insurance company. Therefore, it has to plan both for any normal trends in the reclaim experience and for any future stress scenarios that may occur, and model those accordingly.

Examples of such stress scenarios include developments in artificial intelligence that help to reunite more customers with their lost assets and, as we discussed in an earlier amendment, future changes in government data access, which could affect participant’s tracing efforts. Any stress scenario could result in a sudden increase in reclaims, and a combination of these scenarios would, of course, have a significant impact on RFL’s reserves. This is reflected in RFL’s regulatory permission and activities under which it is authorised to operate, with the purpose of ensuring that RFL has adequate financial resources to meet its ongoing reclaim obligations without placing it into undue financial distress or business failure.

While I recognise your Lordships’ interest in the current level of reclaim rates compared with money reserved, RFL has informed me that the cumulative reclaim rate is increasing and looks set to increase further in future years. RFL has reviewed and will continue to review its reserving policy regularly, using both internal and independent actuarial advice and modelling, to ensure that it is appropriately prudent and will continue to release as much money as responsibly possible to good causes across the UK, while retaining sufficient funds to meet reclaims. RFL’s remit is expanding to include previously unheld asset classes. I therefore understand why RFL has chosen not to amend its reserving policy at this time, although that decision remains solely with the company.

Public Service Broadcasting (Communications and Digital Committee Report)

Lord Bassam of Brighton Excerpts

Thursday 27th May 2021 Lords Chamber

[Lord Bassam of Brighton (Lab) [V]]

My Lords, before I get into the subject matter, I too would like to join my good friend the noble Lord, Lord McNally, in congratulating my noble friend Lady Merron and welcoming her to our Front Bench. As she demonstrated today, she will add greatly to its talent with her thoughtful and reflective comments and observations. I also pay tribute to my late noble friend Jimmy Gordon who, as a member of the committee, I am sure made many fine contributions and had great knowledge and experience of the media world.

The Communications and Digital Select Committee, led by the noble Lord, Lord Gilbert, has rendered the House a great service in delivering this report on public service broadcasting. The stellar cast of contributors responding to it today has amply demonstrated its value. The timing of today’s debate—as others have noted —could not have been better, as it has stimulated a thoughtful debate on the media’s role in its current form. The downside, of course, has been that the report itself has been so delayed.

The noble Lord made a passionate and persuasive case for public service broadcasting in an ever-changing media environment, challenging the Government to play their role in ensuring it has an active place in a mature democracy. The noble Lord’s questions themselves to the Minister today would provide ample material for a further debate.

Recent events, not only the Bashir findings from Lord Dyson but also the launch of Times Radio, GB News and so on, will be cited by some as evidence that the role of public service broadcasting is diminished and therefore that it should receive less funding. The opposite is actually true; we need to retain a strong offering from public service broadcasters to keep other platforms honest and ensure access to a plurality of views and a range of quality content.

One area where the Government disagree with the committee is on the list of free-to-air sporting events. The Government were quick to oppose the European super league proposals—and quite rightly; we agreed wholeheartedly with that. But there is concern across many sports that a lack of availability on free-to-air diminishes public enthusiasm. It is positive that the Football Association Cup rights held by BT are going back to ITV, and the buzz around the return of test cricket to Channel 4 demonstrates that the Government should look again at listed items.

The report rightly identifies the positives that public service broadcasting investment has in supporting the creative sector, which has had a tough time over the last 14 months. Investment from Netflix et cetera is also important, but it is not a zero-sum game. We want a range of quality programming across different platforms, as that will enhance the UK’s global reputation. Netflix itself acknowledge this, saying that a strong BBC is in everyone’s interest.

I am glad to see that the Government are committed to working with employers to make a success of apprenticeships. They need to look again at how the apprenticeship levy works, as the model envisaged under the system does not align with the short-term placements you often see in the creative industries and broadcast sector. Government also should have done more to support creatives during the pandemic, rather than excluding many, particularly freelancers, from help—not least because they are all part of the media ecosystem, working in PSBs and streaming services alike.

On questions such as how to engage young people and reverse the decline in viewing figures for public service broadcast channels, it is clear that finding solutions will take time. The decision to make BBC Three online only may not have been the right one, but that experiment has at least provided additional insight and data to help inform future decision-making.

I take the view that there will always be a place for public service broadcasting, but that the role it performs will have to change over time—as it has continuously in the past. Public service broadcasting provides a platform. It should concentrate on quality. It should provide a benchmark for integrity and honesty and be prepared to be fearless. But I did agree with the noble Lord, Lord Gilbert, when he said that public service broadcasters need to take more creative risks. In modern times that might seem like a tall order and, while it might irritate and annoy from time to time, if it fulfils that brief it will be doing its job.

It is clear that the public value public service broadcasting and, so long as it has public support, it is a model worthy of political support. The noble Lord, Lord Gilbert, has made the case for public service broadcasting and the last year has, as many noble Lords have said this afternoon, demonstrated its enduring value as a trusted source of information and news in an era of fake news. We would be wise to reflect on that before any opportunistic moves are made to disturb our current media landscape. In particular, the Government would do well to take the broader view expressed today by the noble Lord, Lord Vaizey, on the future of the BBC as a key element of the public service platform.

Dormant Assets Bill [HL]

Lord Bassam of Brighton Excerpts

2nd reading
Wednesday 26th May 2021 Lords Chamber

[Lord Bassam of Brighton (Lab) [V]]

My Lords, first, I start by drawing the House’s attention to my interests as set out in the register. I work as a director for the charity Business in the Community. I am also a trustee on a number of charitable boards that may potentially benefit from funds disbursed from dormant accounts.

Secondly, I thank the Minister for the way in which she introduced the Bill: with care and not a little passion. We truly have a Minister who understands the value of the NGO and charitable sector and draws richly from her own personal experience.

Next, I congratulate the noble Baroness, Lady Fleet, on her maiden speech, which reminded us all of the rich experience that Members bring to this House—in the particular case of the noble Baroness, her championing of the arts with passion and enthusiasm. I must say I liked her call for levelling up in musical education. It only made me wish that my younger, tuneless self had been musically levelled up.

Before I turn to the detail of the Bill, I think that this an opportunity to give our thanks to the thousands of charities and community groups across the country for their amazing work during the Covid pandemic. Much of this has been done in the face of severe financial constraints—as the noble Lord, Lord Bellingham, made clear—and in the face of unprecedented public health restrictions. They have persevered and found creative ways to continue running vital services and supporting local communities. We should express our gratitude to those involved, just as we have saluted the heroic efforts of the National Health Service and our key workers.

As we have heard, the dormant assets scheme was established under the last Labour Government in a moment of cross-party support. Recognition of the crucial role played by civil society and the importance of properly supporting those organisations that do so much to help people and communities across the UK is at its root. We are proud that, to date, hundreds of millions of pounds have been unlocked and passed to good causes. For some charities, extra funding has given a greater sense of financial security, providing greater freedom to focus on service delivery. For others, it has meant expansion either in reach or in the range of services provided.

When designing the original scheme and the list of assets included in it, reunification was a key consideration. If somebody has a rightful claim to assets that become dormant, of course every effort should be made to ensure that the money returns to its rightful owner. If that is not possible, there is a clear moral justification for putting it to good use elsewhere. It may be a simple principle, but we welcome that it remains untouched in this Bill.

On a slightly different note, I was taken by the comments on reunification and reserve rates made by the noble Baronesses, Lady Bowles, Lady Noakes and Lady Kramer. This suggested overprovision, and I ask whether the Minister can explain why.

While we welcome the introduction of the Bill, can the Minister shed any light on its timing? The post-implementation review of the 2008 Act was published in 2014, and the Dormant Assets Commission published its recommendations in early 2017. While we appreciate the need to consult widely and consider civil society finance in the broader political and economic context, we have had to travel an extraordinarily long road to find ourselves here today. Why? Is it, for example, because departmental resource has been focused on other matters, such as preparing for Brexit, perhaps?

It is an interesting time to discuss funding for good causes. Despite some support from the Government, whether through grants or the furlough scheme, the past 14 months have been incredibly tough for the charitable sector, as I said earlier. For many, coronavirus support grants were slow to arrive and insufficient to allow business to continue as usual. While the economy may be gradually reopening, it is important for a degree of government support to remain in place until the charity sector’s ecosystem is fully rebooted.

We must be thankful that, despite the challenges of the past year, fundraising has not ground to a complete halt. Many charities have been creative in hosting virtual events or promoting individual sporting challenges, in the absence of occasions such as the London Marathon. Nevertheless, money has been tight and, despite the characteristic generosity of the British public, with so many people furloughed or losing their jobs as a result of Covid-19, charity income has taken a big hit, just as many organisations have experienced a surge in demand.

On the Labour side, we very much support the Government’s intention to unlock further funds through the measures in this legislation, but we must consider the Bill in context, as I have outlined. Earlier this year, for example, the Chancellor unveiled spending plans reminiscent of the coalition Government’s austerity years. With this in mind, can the Government assure us that the new money derived from the dormant assets listed in the Bill will be in addition to other forms of public support for charities, rather than being used as a rationale to scale back other initiatives?

While we support the thrust of the legislation, can the Minister provide a rationale for the decision to exclude some of the asset classes recommended for inclusion by previous consultations and industry champions? On pensions, for example, the justification seems to be that we need time to take stock of the introduction of pensions dashboards. How long does the Minister believe is needed to assess the changing pensions landscape? If conditions are favourable, is this an area where the Government may wish to utilise the powers in Clause 19?

The dormant assets eligible for this scheme are generally financial products. What consideration are the Government giving to including other asset types? Does the Minister see, for example, a case for including the proceeds from government land disposals? Similarly, is there scope to pass some of the proceeds of crime confiscated under other legislation to community groups, in recognition of the harm that crime has on the area in which it is committed? I am particularly interested to hear the Minister’s response to the bid from the noble Lord, Lord Vaizey, to bring the National Fund into scope and, similarly, to the case made by the noble Baroness, Lady Noakes, for NS&I unclaimed assets and, by the noble Lord, Lord Hodgson, for unclaimed dividends.

These questions lead us to a more fundamental debate: should funds continue to be disbursed by the National Lottery Community Fund, as they have been since the inception of the scheme? Is it time, as others have suggested, to look at alternative models? The Minister is no doubt aware of proposals drawn up by civil society organisations for what they call a community wealth fund, which invests in left-behind areas. A number of Peers, notably the noble Baronesses, Lady Lister and Lady Eaton, refer to the proposition, as did others across the House. What is the Minister’s response to that, given that it is consistent with the Government’s stated aim of levelling up, which the Minister drew attention to in her opening speech?

During the passage of the Bill, we intend to probe the operation of Clause 27 to gain a better understanding of what oversight the Treasury and Parliament have of Reclaim Funds Ltd’s finances and operations. We will also seek to amend proposed new Section 18A, which is inserted into the 2008 Act by Clause 29. The consultation requirements included in the draft appear inadequate and we would therefore welcome the opportunity to discuss this with the Minister and her officials in due course. The case for a broader consultation was well made by my noble friend Lady Lister.

As I said at the outset, we welcome this Bill as it builds on the scheme which Labour launched back in 2008. We think there are some missed opportunities in this new, additional proposal. We hope the Government will recognise this, and we commit to probing the opportunities the Bill could unlock and to constructive engagement throughout the Bill’s passage through both Houses. As the noble Lord, Lord Hodgson, observed, we, as the Opposition, have good intentions in examining the Bill, not least because the Bill has good intentions behind it. We will be its critical but supportive friend, seeking to improve its content and impact.

Digital Identification Protocol

Lord Bassam of Brighton Excerpts

Thursday 20th May 2021 Lords Chamber

[Baroness Barran (Con)]

The noble Baroness will know that issues around anonymity on social media are extremely complex. She rightly raises instances where anonymity is abused, but we also know that some people use anonymity and pseudonyms for their own protection. I will take her remarks back to the department.

[Lord Bassam of Brighton (Lab) [V]]

My Lords, I congratulate the noble Lord, Lord Holmes of Richmond, on pursuing this issue so doggedly, and I challenge the Minister’s assertion that the Government are moving at pace on this. But it is crucial that our economy and public services move with the times. Bodies such as the Financial Action Task Force acknowledge the existence of risks if digital ID is not properly implemented. So how do the Government intend to strike the right balance between risk and reward in this important area?

[Baroness Barran (Con)]

The noble Lord raises an important question. It will be through the transparency that I mentioned earlier, with the publication of the trust framework alpha and a second iteration, a beta version, which will be tested before going live.

Music Festivals: Covid-19-related Cancellations

Lord Bassam of Brighton Excerpts

Tuesday 27th April 2021 Lords Chamber

[Baroness Barran (Con)]

We are not squirming and we are not hesitating. We are progressing as fast as we can, but the noble Lord would be the first to criticise the Government if we opened too early and the public health crisis re-emerged.

[Lord Bassam of Brighton (Lab) [V]]

My Lords, the Minister is of course right that we should be continually guided by data, but slippage in the Government’s Covid road map will have a significant effect and impact this summer on staging music and other cultural festivals as well as large-scale sporting events, such as July’s British Grand Prix at Silverstone. I remind the Minister that the Chancellor said that when it came to economic support he would do whatever it takes, so why are the Government dragging their feet on matters such as insurance, leaving promoters and fans alike in limbo and unable to plan ahead?

[Baroness Barran (Con)]

I can only repeat that the Government are not dragging their feet. We have research pilots running in April and May that include an outdoor music festival in Sefton, and these will feed into decisions on step 4 of the road map in June. The evidence that we are gathering is aligned with the dates for the road map, but we cannot anticipate what that evidence will show.

Creative Industries: Covid-19

Lord Bassam of Brighton Excerpts

Monday 26th April 2021 Lords Chamber

[Baroness Barran (Con)]

I agree with the noble Viscount that freelancers are a critical part of our creative industries and that we should explore many ways of ensuring their success in future. That is why we recently extended the pan-economy self-employment income support scheme with individuals now able to qualify for grants based on their 2019-29 tax return, meaning that more than 600,000 self-employed individuals will be newly eligible for the scheme.

[Lord Bassam of Brighton (Lab) [V]]

My Lords, I draw attention to my interests in the register, which include my membership of two trusts involved in cultural activities. In many of our most deprived communities, the cultural industries have taken a severe hit. Given that they are closely aligned with the hospitality sector, what plans do the Government have to develop a national plan to help the hard-pressed cultural sector recover as we emerge from lockdown? Can the Minister say some more about the support the Government are likely to give to freelancers, who have been frozen out of many of the schemes supporting workers in the cultural sector?

[Baroness Barran (Con)]

I just commented on the expansion of the scheme, which we think will include many new freelancers who are self-employed. The Government share the noble Lord’s concerns about support for our deprived communities and see cultural assets as critical in their revival. That is why more than two-thirds of the Culture Recovery Fund has been spent outside London and why we have a major series of funds, including the levelling-up fund, the community renewal fund and, in future, the shared prosperity fund, all of which have a creative industries strand within them.

Gambling: Early Mortality

Lord Bassam of Brighton Excerpts

Tuesday 20th April 2021 Lords Chamber

[Baroness Barran (Con)]

I am not aware of specific plans such as those the noble Lord suggests, but I can reassure the House that co-operation between departments on this important matter is strong and effective.

[Lord Bassam of Brighton (Lab) [V]]

Does the Minister agree with the comment of the Lancet Public Health last January, that:

“Gambling disorders often remain undiagnosed and untreated”,


and its call for a scientific inquiry into this

“urgent, neglected, understudied, and worsening public health predicament”?

If not, how would she describe it? Are the Government, as part of their review of gambling, considering the practicalities of a statutory duty of care for gambling companies, similar to the one we expect to be in the online safety Bill?

[Baroness Barran (Con)]

The noble Lord raises an interesting point. It is significant, in relation to disorders such as gambling problems remaining hidden, that the Gambling Commission has recently appointed a panel of individuals with lived experience to advise it formally on player safety. We hope this means that currently hidden issues will become more visible, and we will be able to address them.

Football: European Super League

Lord Bassam of Brighton Excerpts

Tuesday 20th April 2021 Lords Chamber

[Baroness Barran (Con)]

My noble friend raises an interesting point. We have been clear that the football authorities are best placed to push back on these proposals in the first instance—they have our backing—but that nothing is off the table if they fail to do so.

[Lord Bassam of Brighton (Lab) [V]]

My Lords, I thought Gary Neville spoke for millions of us football fans at the weekend when he condemned the Super League proposals. Can the Minister set out the sort of legal measures the Government are prepared to deploy in order to protect the competition laws that govern the current fair access system on which the football pyramid has long been built? When will the Secretary of State set out the terms for the fan-led review announced yesterday, when will it start and how will it seek to draw on the fan anger rightly directed at this football-destroying proposition?

[Baroness Barran (Con)]

With regard to the fan-led review, we will be releasing the full terms of reference imminently. In relation to the noble Lord’s question about what the Government can practically do to prevent this, we are looking at everything from governance reform, as I mentioned, to competition law and all the mechanisms which allow football to take place. We have been in close contact with colleagues from BEIS and the Competition and Markets Authority, who are examining whether this would contravene competition law.