Trust the Daily Mail to say "raids"! Grrr!! No wonder the public are mislead. Not least Alan.
OK let's explain it. First of all, the Big Society. What Cameron wants to encourage is for people to look out for their neighbours. Because of our busy lives, increased affluence, cars, government red tape and other factors, people have become more and more isolated from their neighbours. Though the Left is convinced that it is merely a cost-cutting measure, there are surely many, many things which can be achieved by citizens organising, which would never be managed by bureaucratic local government. Shopping for one's neighbours, visiting elderly or disabled people, coaching kids in sports, giving blood, charity whist drives, mentors, "big brothers", the list is endless. For the Left to block any such approaches is shameful, and IMO, blows the idea that they are more caring. No-one is suggesting that doctors should be volunteers, but there must surely be huge areas where people would be willing to give more, so long as they are not left holding the baby, or exploited without gratitude.
Secondly, a bit about fractional banking. Money deposited in a bank allows the bank to lend money a multiple of times. Put simply, if £1,000 is deposited, the bank can safely lend, say, £900. That £900 is spent, and the £900 returns to the bank. It can then lend 90% of £900, ie £810, which means they can lend a further £729, and so on.
(This is great while things are moving in the right direction, but when people don't borrow, or borrowers go bust, the benefits are reversed, and we see the recession we have just experienced.)
So, it matters not a tinker's cuss whether bank deposits are left idle. Money could be going in and out faster than a fiddler's elbow, but if the overall balance was the same, so would the banks' lending.
So, the government are in no way "raiding" anything. Effectively, the "dormant accounts" story is a way for the government to borrow money from the banks for social "Big Society" purposes. This is of precious little consequence for the banks, as they do not have a shortage of money to lend. What they lack, is borrowers they consider credit-worthy. The significant point is that the risk of lending to "Big Society" projects has been transferred to tax-payers as a whole.
How significant is that? Hmmm... Frankly, I wouldn't expect the risk to be significant. I expect the banks spend more on advertising than any potential losses. They have no economic or viable alternative for the money, so there is no "crowding out" of investment finance. The important factor is that the banks are not geared up to assess the viability of "Big Society" projects. Maybe they should set up a multi-bank organisation to do so...? That might be a solution, but so far it hasn't materialised. It might do the banks some good. Using it as an advertising campaign might be a good bet, compared to sponsoring soccer, say.... But for whatever reason, they have not done it. Also, the governemnt hope to earn some "brownie points" for their ( in this case, laudable,) efforts.
So what is the government up to? They could extremely easily just borrow the money at around 2% interest and do exactly the same thing. 2% is insignificant. But it means that the government can maintain the idea of reducing borrowing, and it gives them some kudos for "doing something". I think it also, genuinely, helps the "Big Society" project, not least in marketing terms. Presentation can be very important in motivating people.
So, in some sense, it is just "moving money around", in that the government are presenting their policy in a way which they hope will garner them some support, but is it just "financial engineering"? Smoke and mirrors? No, it is real action, which seeks to affect small, local matters which will improve society at the most local level. Which is a good thing. A very good thing.
Hope that explains things.