| Child Trust Funds Bill
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Linda Perham (Ilford, North) (Lab): I am attracted by the alliterative properties of the term ''baby bonds''. However, does the hon. Gentleman agree that the purpose of such funds is to reach up to the age of 18, the end of a person's childhood? It could be misleading to change the description of such funds, popular though such action may seem. Mr. Osborne: I am not sure that a change to ''baby bonds'' would be misleading, if that is what everyone thinks that they are anyway; it might be misleading to proceed with a name that no one is aware of, and people may not be aware of what child trust funds are. The blame for the name ''baby bonds''—if we are looking for blame—rests entirely with the Government's information sheet and Government spin doctors. After the policy was announced in the run-up to the 2001 general election and Budget, No. 10 Downing street briefed on it extensively, and we were told, ''Brown to announce baby bonds in Budget'', and so on. I am merely saying that ''baby bonds'' is what everyone calls them, and that is how everyone knows Column Number: 8 them. We in Westminster are often accused of speaking in a parallel language that no one understands.Mr. Hilton Dawson (Lancaster and Wyre) (Lab): There is a serious point to the subject. We will be trying to encourage young people to invest in their trust fund throughout their childhood, and particularly, perhaps, their adolescence. What adolescent would own up to their peers that they were putting their hard-earned money from their paper round, or whatever, into their baby bond? That is just not realistic. Mr. Osborne: The hon. Gentleman is being too sensitive to the feelings of our nation's teenagers. One of the companies most likely to be an active participant in the child trust fund market is Children's Mutual. It uses the name ''baby bonds'' for one of its products, which is one of the most popular savings products for children. The name is already out there in the marketplace. I suspect that the Minister will say that the trust funds are not bonds, because many of them will be in equity, but I have anticipated that line of attack. During the consideration of the Finance Bill in Committee and on the Floor of the House, I kept making the point that the stamp duty land tax—the Government's new land tax—neither involved a stamp nor was a duty. When I made that point to the Minister, she said that the Government were sticking to that name because it was the term commonly understood by practitioners, so she has already accepted that principle. Although ''baby bonds'' would not be a strictly accurate term, in the sense that these investments are not necessarily bonds, that is the name by which the policy is universally known, and it would be a good start for the Committee if it were put in touch with the real world. Ruth Kelly: I welcome the hon. Gentleman to the Committee. I am sure that he will make an extremely valuable contribution to proceedings. I am always glad to hear of his continuing connection with my constituency, and to hear about his Christmas card list. I expect to hear more about that later. I am grateful to the hon. Gentleman for explaining his fondness for the term ''baby bond''. However, as my hon. Friend the Member for Lancaster and Wyre (Mr. Dawson) pointed out, it is important to recognise that the trust fund with which we are proposing to endow all children at birth is designed to build up a financial asset to which young people will have access at the age of 18. It is designed to promote and encourage traditional saving by parents, family, friends and children. It is not easy to think of a name that will appeal to children of all ages, from babies to young adults. We think that ''child'' comes as close as any name to achieving that. However, we did not take that decision lightly; in fact, we commissioned research, with prospective parents and grandparents, on which name was most attractive, and they said that ''child trust fund'' was understandable, recognisable and meaningful. Indeed, contrary to what the hon. Column Number: 9 Member for Tatton (Mr. Osborne) says, there was a high level of awareness about what the expression meant.Mr. Osborne: Is the Minister really trying to tell us that more people are familiar with ''child trust funds'' than ''baby bonds''? Ruth Kelly: If the hon. Gentleman will allow me to continue, I was about to say that there is an intrinsic problem with the name ''baby bond'', and a reason why it cannot be used. As he intimated earlier, the name is already used by Children's Mutual for one of its products, and it is a registered trademark. That makes it impossible to use the name as the hon. Gentleman suggests, as registration of a trademark gives the owner the exclusive right to use the mark, and the right to sue third parties who infringe that right. Because of the popularity of the term ''child trust fund'', the fact that the financial asset is to be drawn down at the age of 18, and the fact that the name ''baby bond'' is off limits, I recommend that the Committee reject the amendment. Mr. Osborne: It is so disappointing that my first ever amendment has been rejected—I suppose that I had better get used to that. I was simply attempting to put the Committee in touch with the real world. The Minister's point that Children's Mutual has the copyright on baby bonds did not prevent Government spin doctors from calling the measure a baby bond, and continuing to call it that in behind-the-scenes briefings. Perhaps the Minister and I can come to an arrangement. The Minister could assure me that Government spin doctors will not call the funds baby bonds, and I will promise to call them child trust funds from now on. Mr. Andrew Robathan (Blaby) (Con): Is there not another angle to this? As was pointed out on Second Reading, £250 is not a vast amount of money. I have two small children, and the Minister has four children, so she knows, as I do, that £250 does not go very far towards bringing up a baby. One could call that amount a baby bond because it is enough only for a very small baby for a very short time. Mr. Osborne: I thank my hon. Friend for that intervention. We are straying into the detail of the sums that will be involved— Mr. Robathan: That is covered in clause 8. Mr. Osborne: I am sure that my hon. Friend has a long speech prepared for clause 8. We need an arrangement whereby the people in the Government who speak on the Minister's behalf cease to call these funds baby bonds. From now on, I shall call them child trust funds. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Mr. Osborne: I beg to move amendment No. 4, in
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The Chairman: With this it will be convenient to discuss the following: Amendment No. 139, in
'and the Department for Work and Pensions'.
As members of the Committee will be aware, I recently conducted some research. I found that, in the past four years, the Government have abolished family credit, introduced the working families tax credit, the disabled person's tax credit and the child care tax credit, introduced the employment credit, abolished the married couples allowance, introduced the children's tax credit and the baby tax credit, abolished the working families tax credit, the disabled person's tax credit and the children's tax credit, abolished the baby tax credit, introduced the child tax credit, abolished the employment credit and introduced a working tax credit. They have also transferred the administration of child benefit from the renamed Department for Work and Pensions to the Treasury. In the process of introducing five tax credits, abolishing four of them and introducing a further two, the Government have, as every constituency MP knows, caused huge administrative chaos and confusion, and genuine hardship for people caught up in the mess. It all amounts to a wholesale taking over of much of the working age benefit system by the Treasury. Child trust funds are the latest example of that. No doubt the Minister will tell me that they are linked to the eligibility for child benefit and should properly be administered by the Inland Revenue, but it prompts questions about why the Inland Revenue now administers child benefit. We could have a long, theoretical discussion about whether the Department that collects revenue is the best Department to be paying out benefits—I have serious concerns about that—but I suspect that I would be stretching the Committee's patience if I began that discussion. We are entitled to ask whether the Inland Revenue is up to administering child trust funds, which, by the Government's own admission, it is a significant task. The explanatory notes say:
Column Number: 11 The Inland Revenue and the Treasury are proposing to set up a new form of benefit system during the next 12 months and to get the Inland Revenue to administer that. Surely the DWP is more likely to carry out that task effectively? If an increasing number of benefits are administered by the Treasury, then what is the point of the DWP? Will we reach a point at which almost all functions of that Department are carried out by the Chancellor? The amendments are merely an attempt to put the DWP back in charge of the benefits system.
9.45 am
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