Finance: Charities edge closer to claiming dormant account money

The Government has held "constructive discussions" with the banking industry over distributing billions of pounds left in dormant accounts to good causes.

Treasury minister Stephen Timms confirmed in a Parliamentary answer to Labour backbencher Martyn Jones that the Government had made progress on a Budget commitment that unclaimed assets should be "reinvested in society".

Jones has campaigned for the UK to copy legislation adopted in countries such as Ireland, where unused money in bank accounts is given annually to charities. Irish charities netted EUR6m from this route in 2004.

Jones claimed that such a scheme would preserve an "insurance clause", so that if rightful owners of assets came forward, they could claim their entitlement. "I have continued to lobby the Government, tabling questions to the Treasury," he said. "The responses I have received have been extremely encouraging and suggest that the Government is now addressing the issue.

I hope to see a clear reference to tackling the issue of dormant accounts in the Labour manifesto - this is a wake-up call for the financial sector."

A spokesman for the British Banking Association said that discussions with the Government were continuing, but that the association had nothing further to add.

The Balance Foundation, set up last year to encourage financial institutions to release unclaimed assets to charity, has helped two investment banks to obtain permission from the Financial Services Authority to distribute their dormant funds.

Trustee Michael Webber said that the foundation supported this direction of unclaimed assets, either through legislation or a voluntary scheme. He added that the actual figure that remains locked in dormant accounts "was shrouded in mystery". Estimates range from £15bn to £80bn.

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