Clause 19 - Power to extend the dormant assets scheme to cover new dormant assets

Dormant Assets Bill [Lords] – in a Public Bill Committee am 9:45 am ar 11 Ionawr 2022.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Question proposed, That the clause stand part of the Bill.

Photo of Nusrat Ghani Nusrat Ghani Ceidwadwyr, Wealden

The pressure is back on you, Minister Huddleston.

Photo of Nigel Huddleston Nigel Huddleston The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport

Thank you, Ms Ghani. Clause 19 is an important clause. It provides a power to the Secretary of State or the Treasury to bring additional asset classes within scope of the scheme, as we alluded to earlier. That might include ones that have already been proposed for inclusion but whose suitability needs further exploration, new ones, or ones where dormancy has not yet been identified as an issue. The power also enables the Secretary of State or the Treasury to amend the current asset classes so that they can cover new types of assets, and make consequential amendments.

This clause allows the Secretary of State or the Treasury to amend part 1 of the Bill or the 2008 Act by regulations for that purpose, and makes further provision about what such regulations must and can include—for example, identifying when dormancy exists and ensuring that the owner has a right to payment against an authorised reclaim fund. It provides that the Secretary of State or the Treasury may make regulations to enable participants to convert a dormant non-cash asset into cash in order for it to be transferred into the scheme where the asset’s terms do not provide for this. It then makes further provision about the use of this power—for example, that it can be used only with a view to the cash being transferred into the dormant assets scheme.

The clause also ensures that all assets currently in scope cannot be excluded or have their associated definitions of dormancy altered using this power. Finally, it provides that any regulations made under the power must be approved by both Houses of Parliament.

Photo of Jeff Smith Jeff Smith Shadow Minister (Digital, Culture, Media and Sport)

As the Minister says, this important clause goes to the heart of the Bill and what we are trying to achieve with it, and we supports its aims. Like the Minister, I welcome the millions of pounds that could go to good causes as a result of the assets that we have just agreed, as well as those that could be agreed as a result of the clause.

Having seen the success of the scheme, we want to build on and expand it. We agree that it makes sense to give the Secretary of State or the Treasury the ability to expand the potential of the fund not by bringing back primary legislation, but by consulting—that is important—and proposing new assets to add to the scheme by regulations. We welcome the approval and the important oversight of those regulations by both Houses of Parliament. Indeed, the clause has the potential to save future generations of MPs from sitting in a future Bill Committee for another dormant assets Bill. [Laughter.]

We particularly welcome the measures as a first step towards the potential inclusion of future pension assets in the legislation. May I press the Minister a little more on that? I think the Minister agreed in principle to the inclusion of additional pension assets, but my hon. Friend the Member for Pontypridd asked for an indication on when those might be included, because we are keen to expand the fund appropriately. The Minister talked about a mechanism for that inclusion, but he did not want to put a commitment on the face of Bill. It would be nice to know what sort of timescale we are looking at for including future pension assets.

The clause really goes to the heart of the Bill’s purpose: how can we expand the good work the scheme has done, and what other assets can we use to benefit good causes? People have talked about all kinds of different assets that could be included in future, including foreign currency cash balances, empty properties, national savings, proceeds of crime, trust funds and lifetime ISAs, which the hon. Member for Glenrothes mentioned.

We are keen for all those ideas to be explored to build on the good work of the scheme, and we hope to hear in future suggestions that we have not yet discussed. We agree that the Government should be free to explore them, and we believe that the Bill contains appropriate safeguards and oversight, so we welcome this clause.

Photo of Peter Grant Peter Grant Shadow SNP Spokesperson (Europe), Shadow SNP Deputy Spokesperson (Treasury - Chief Secretary)

It is important to place on the record that I—and, I hope, every Member of Parliament—have a very strong presumption against the concept of Henry VIII powers. It should be an important principle that when Parliament passes primary legislation, only Parliament should be allowed to change it by actively and positively choosing to do so.

In this particular circumstance, the proposed solution is appropriate because it is very tightly constrained. As the hon. Member for Manchester, Withington, pointed out, there are strict limits on the circumstances in which and the process by which the powers can be used. Just as a lot of careful drafting has had to go into the extensions to the scheme that are included in the legislation, it is important to recognise that none of us knows what kinds of financial assets people will hold in 10 or 15 years’ time. People might have significant amounts of money in assets of types that we cannot imagine. For those circumstances, secondary legislation is the more appropriate way to bring those assets in scope.

There are two fundamental requirements in the Bill that have to stay there. First, if Henry VIII are being used, the scheme must always be entirely voluntary, and secondly, the owner must always retain the absolute and indefinite right to come back and reclaim assets that are rightfully theirs. As long as those two requirements are in the Bill, I think that, on this very rare occasion, the use of Henry VIII powers is appropriate and justified.

Photo of Nigel Huddleston Nigel Huddleston The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport 10:00, 11 Ionawr 2022

As discussed, the Bill includes a provision to allow expansion into new asset classes by secondary legislation in the future. As the hon. Member for Glenrothes suggested, it will not therefore require primary legislation; therefore we may save colleagues from some painful processes in the future. However, it will still have the scrutiny of both Houses, which is really important.

Before any power is extended, further work will need to be undertaken to identify new asset classes and facilitate their inclusion, and regulations are subject to draft affirmative procedure, allowing for parliamentary scrutiny. I cannot commit to a particular timeline at the moment, but of course the overall operation of the Bill will be reviewed three years and five years after Royal Assent. However, that does not preclude ongoing activity or review; when we debate later clauses and proposed new clauses, we will discuss in detail the scrutiny and review, annual reporting and so on that can take place. Those will enable review to happen, and therefore proposals for change could happen organically.

I cannot outline a specific timeline at the moment, because of course that will depend on what is proposed by the House and others, but there is a mechanism for ongoing review in the Bill for the important reasons that hon. Members have outlined. There may well be future asset classes, perhaps products that we are not even aware of or do not even exist at the moment, that should and could be included in future versions of the dormant asset scheme.

Question put and agreed to.

Clause 19 accordingly ordered to stand part of the Bill.