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Anelay of St Johns, B.
Attlee, E. [Teller]
Barker, B.
Beaumont of Whitley, L.
Bridgeman, V.
Byford, B.
Cope of Berkeley, L. [Teller]
Courtown, E.
Dixon-Smith, L.
Elton, L.
Falkland, V.
Jenkin of Roding, L.
Lucas, L.
Maclennan of Rogart, L.
McNally, L.
Mancroft, L.
Miller of Hendon, B.
Newby, L.
Newton of Braintree, L.
Noakes, B.
Northesk, E.
Northover, B.
Norton of Louth, L.
Pilkington of Oxenford, L.
Roper, L.
Seccombe, B.
Selsdon, L.
Skelmersdale, L.
Tugendhat, L.
Wilcox, B.
Windlesham, L.
Acton, L.
Amos, B. (Lord President of the Council)
Andrews, B.
Bach, L.
Blackstone, B.
Borrie, L.
Bragg, L.
Brooke of Alverthorpe, L.
Brookman, L.
Campbell-Savours, L.
Carter, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Corbett of Castle Vale, L.
Crawley, B.
Davies of Oldham, L. [Teller]
Dean of Thornton-le-Fylde, B.
Dubs, L.
Evans of Temple Guiting, L.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Gale, B.
Gibson of Market Rasen, B.
Goldsmith, L.
Grocott, L. [Teller]
Haskel, L.
Hayman, B.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Howells of St. Davids, B.
Hunt of Kings Heath, L.
Lea of Crondall, L.
Macdonald of Tradeston, L.
McIntosh of Haringey, L.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
Massey of Darwen, B.
Pitkeathley, B.
Rendell of Babergh, B.
Rogers of Riverside, L.
Rooker, L.
Sainsbury of Turville, L.
Sewel, L.
Simon, V.
Temple-Morris, L.
Triesman, L.
Turnberg, L.
Warner, L.
Warwick of Undercliffe, B.
Whitaker, B.
Whitty, L.
Wilkins, B.
Woolmer of Leeds, L.
Resolved in the negative, and amendment disagreed to accordingly.
Lord Triesman: My Lords, I beg to move that consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.
The Deputy Chairman of Committees (Lord Brougham and Vaux): Before I put the Question that the Title be postponed, I remind your Lordships of two points of procedure: noble Lords will speak standing, and the House has agreed that there will be no Divisions in Grand Committee. Unless, therefore, an amendment is likely to be agreed, it should be withdrawn.
If there is a Division in the Chamber—and I believe that there will be—I ask the noble Lord who is speaking to come to the end of his sentence very quickly. The Committee will adjourn and then resume after 10 minutes.
Baroness Noakes moved Amendment No. 1:
The noble Baroness said: It is my pleasure to start this Grand Committee, which we hope that we will get through with as much dispatch as possible. In moving Amendment No. 1, I shall speak also to the other amendments in the group. They all concern the position of children born before 1 September 2002 who are therefore ineligible for child trust funds under the Bill.
In another place the issue of children who will miss out by being born too early was debated extensively. Although the Government have provided a power in Clause 2(7) for the date to be amended later, it is clear from their more recent response to the report of the Treasury Committee in another place that they have no intention of using that power in the near term. That means that child trust funds will be launched without the ability to provide similar savings vehicles for older children. We do not know what evidence of unmet demand the Treasury will require before it moves its position.
We fully accept that child trust funds should not qualify for the Government's contribution. The policy is already expensive enough without that. We do not believe that all families will want to open an account
The Children's Mutual has provided much helpful briefing to many noble Lords, I am sure, for our consideration of the Bill. It told us of its concern about families who do not like to differentiate between their children. It believes that those families are just as likely to ignore the savings opportunity created by child trust funds if they cannot contribute in a similar way for all their children. The Minister may say that that is an irrational response, if similar look-alike products can be created, but families are not always motivated by the cold logic of economics. They will be influenced as much by perceptions as anything else.
The amendments would extend the scheme a further 14 years so children of around 16 and a half will be covered when the child trust funds are introduced. In practical terms, that is about as far as one would go to make the child trust fund in any way worth while. Amendments Nos. 24 and 35 allow parents to open an account and do not require the Inland Revenue to send out masses of vouchers that are not needed—that was one of the objections made in another place. Amendments Nos. 46, 50 and 57 ensure that no government contributions need be made to the accounts. I beg to move.
Lord Newby: As noble Lords will know, the Liberal Democrats oppose the Bill. Therefore, in dealing with the amendments, I shall try to follow two principles. No doubt noble Lords will trip me up if I get them wrong. First, I shall oppose amendments that increase the scope of the Bill. Equally, however, I shall support and move amendments that I hope will make it easier for families, particularly poorer ones, to invest. In that way, to the extent that we will have child trust funds, they will work to the benefit of poorer families in particular, who are most in need of additional investment products. Therefore, in following my principles for at least the first group, I do not support these amendments.
Lord MacGregor of Pulham Market: As I made clear on Second Reading, I am very doubtful about the efficacy and cost-effectiveness of the whole proposal in achieving two objectives on which we all agree; namely, greater financial education and the encouragement of many more young people to save, particularly in the longer term. Having said that, I accept that the Bill will be enacted, so what one is trying to do in Committee is to improve it wherever possible, even if one is somewhat diffident about the proposal as a whole.
I think that I declared an interest as a non-executive director of a financial provider at Second Reading, but I have not talked to anyone in the company about the Bill. I want to make it clear that, although that helps me to have some knowledge in the way in which I approach the matter, I express entirely my own position and views.
I support the amendments. I would add only two points to those made by my noble friend Lady Noakes. The first is that, as I recall, during the Select
Secondly, it has been said that there are other ways in which parents, and particularly grandparents, can save for their children and grandchildren, but no other product can offer quite the same wrapper as the one about which we are talking, in terms of tax. Therefore there is a clear advantage. I agree with my noble friend Lady Noakes that families will be concerned not to put additional money into the scheme. Those who have children eligible for the £250 of government money will not wish to put money into the scheme to advantage one child over the other older children.
I therefore support the amendment, and hope that the Minister will now look on it favourably.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey): The noble Baroness, Lady Noakes, has very fairly stated the purpose of the amendments. They indeed take the initiative that we propose of the child trust funds and apply it retrospectively, in effect, for a period of 14 years. There is nothing wrong in principle with that, but we take the view that we have put forward a proposal that, as the noble Lord, Lord MacGregor, rightly said, is an innovative approach to financial planning, education and saving. We think that what one does with a new proposal is take a deep breath and start; one does not take 14 steps backwards and then start.
I acknowledge that there was some support for the idea at Second Reading; the noble Lord confirmed that. I acknowledge that the proposal is not expensive, in the sense that it is not proposed that there should be an initial payment from the Government.
[The Sitting was suspended for a Division in the House from 3.23 to 3.31 p.m.]
House adjourned at twenty-three minutes past seven o'clock.
[The Deputy Chairman of Committees (Lord Brougham and Vaux) in the Chair.]
Page 1, line 13, leave out "2002" and insert "1988"
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