The idea:

What if we made a simple proposition: Unclaimed assets should be reinvested in society and removed from those banks using such balances to boost profits – maintaining at all times the facility to return such assets to their original owner if, unlikely as it is, they were to make a claim.

What is a dormant account?

A dormant bank account or ‘unclaimed asset', defined as an account lacking a transaction for a subjective time-span, rarely rises to the ranks of front-page material; however, such accounts amount to an estimated £20 billion pounds in the UK yet we remain one of the few developed nations to have taken a suitably pragmatic stance. Here in Westminster I am fighting for change.

Have did you become involved?

The subject was brought to my attention as I completed a routine exercise; checking my various standing orders and direct debits. I discovered that one standing order currently paid the Nationwide building society the princely sum of £1 a month and had been for years. I thought that it may have been for an insurance policy or something similar, but soon discovered that the money was actually going to a fund-raising account for the Wrexham Labour party, in a neighbouring constituency where I had lived 20 years previously. The party had benefited for all that time; except that it had not, because it did not know that the account existed.

I wondered what would happen if I stopped paying that pound. The Nationwide building society would be sitting on a couple of hundred pounds that did not belong to it, and no one would know where the money was. It soon become clear that such an example of lost monies was certainly not isolated and I was shocked to discover the figure ran into Billions of pounds.

Further revelations did little to cushion my disbelief as I discovered individual banks held hundreds of millions of pounds in such accounts and were using such money to boost profit figures. This continues to be the case.

How do other countires deal with dormant accounts?

America, Canada and a host of other countries including most recently Ireland have adopted schemes backed by law for the transferral of such money away from bank coffers to reinvest in society.

And Britain?

Britain remains on of the few countries with mature financial sectors to have avoided legislating on the issue and the current official practise remains reactive: Potential claimants can utilise a voluntary unclaimed assets register. For charities and other claimants, the register is costly and invariably unsuccessful due to the voluntary nature of the scheme in which many financial institutions neglect to participate.

Since the start of your campaign, what progress has been made?

The British Banking Association and Building Society Association launched a tracing scheme to help reunite funds with their rightful owners. Along with the Treasury, I agreed that this represented a step in the right direction, but remained incomprehensive and I lamented the lack of proactivity employed by the sector on the issue.

In 2004 I urged the financial sector to adopt the tenet and spirit of new regulations regarding the practise of using unclaimed assets to boost profits issued by the International Accounts Standards Board.

The formation of the Balance Charity foundation, which serves to distribute unclaimed assets in the UK from voluntary participants is a promising move – but it is voluntarily used only by a few investment banks who are prevented from holding unclaimed assets by FSA rules.

I have continued to lobby the government by gaining substantial support within the House of Commons for numerous Early Day Motions or ‘EDMs' that I have tabled which serve to petition the government internally. Such EDMs have now placed the issue of dormant accounts high on the agenda.

Towards the end of 2004 the Chancellor met with me to discuss the issue. This meeting resulted in the issue's inclusion in his pre-budget report in which he cited my thoughts specifically.

How would you like to see the issue of Dormant Accounts dealt with?

I firmly believe that the money in these accounts belongs primarily to the designated owner. Indeed, over 40,000 Irish people have gained from an unexpected windfall thanks to financial institutions, instructed by law, using their resources in a proactive manner to reunite funds with their owners.

Further to this – and to now reiterate what has been published in the Chancellor's pre-budget report - when assets and owners cannot be reunited, the assets should be reinvested in society, as long as the original owners' entitlements to reclaim are preserved. In Ireland, such a scheme for reinvestment has manifested itself with over GBP 21 million having already being donated to community projects.

The potential here for reinvestment in society and the fact that in Britain, the figures could easily run into billions of pounds makes this a startlingly more resonant issue. Good progress is being made but it's now time for a common definition of an unclaimed asset and a statutory solution that forces a common, pro-active response from the financial sector.

What's the latest movement on issue?

To date, we have achieved a number of significant milestones culminating in the annoucement, by the Chancellor Gordon Brown, of an official timetable to address the problem in the 2005 Budget.

The annoucement can be found in the 2004 Pre-budget report and reads:

‘As set out in Budget 2004, the Government believes that it is right in principle that more should be done to reunite assets with their owners and it welcomes the continued efforts of the British Bankers' Association, the Building Societies' Association and National Savings and Investments in trying to do so. Where assets and owners cannot be reunited, the assets should be reinvested in society, as long as the original owners' entitlements to reclaim are preserved.

The Government asked the industry to expand the scope of action beyond investment banking into retail banking and the wider financial sector. Following the Budget, the Government has held constructive discussions with the industry to take this forward and will report on progress in due course.'

Why was the annoucement so significant?

The annoucement in the Chancellor's budget has proven a significant development after years of campaigning for a number of fundamental reasons. Firstly, the governemnt pledged to agree to a common definition for an unclaimed asset. After such a definitive understanding of what consitutues a dormant account is established, a complete calculation of the amount held in these accounts can be established and potential claiments will benefit from a significantly more proactive response from the financial sector – a key pillar of my campaign.

Secondly, for those holding unclaimed assets beyond their knowledge this is a significant announcment. The government now officially expects the financial sector to do more to reunite owners with their assets – made possible through a national register.

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