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6.18 pm
Mr. Dawson: I have never before served on a Standing Committee that has considered a Treasury Bill and, frankly, it is an experience that I would have avoided before now. We have talked a lot about financial education. I am one of those people who tends to avoid banks, building societies, financial institutions, regulations and all those worrying things, but I have thoroughly enjoyed serving on the Committee, partly because of the Front-Bench spokesmen and my hon. Friend the Financial Secretary, who have occasionally characterised themselves, and been characterised, as the young, thrusting generation of the House. We have been talking about a Bill whose effects we will only see over a generation and the generations beyond that. By the time that the first trust funds come to fruition, I can confidently predict that my hon. Friend will have attained great eminence in government, and I am sure that the other extremely able. Members will have enjoyed themselves making small achievements amid the general wastes of Opposition for many years to come.
It is important to recognise that the consideration of the Bill has been helpful and constructive, because underlying the whole debate has been the recognition that its proposals have enormously exciting potential. We heard about the grand old Tory values of savings, self-reliance and all the rest of it, but the Bill is new Labour. It is a universal provision that addresses the most serious issues in our society: child poverty, the urgent and desperate need for regeneration and the absolute need to ensure that every child in our society has real opportunities to succeed and make the best of what they have. It takes an entrepreneurial attitude
towards the future and gives young people the chance to own a substantial asset. It will create an imaginative process and implement a grand proposal that will tackle poverty and help people to address their own circumstances and future in a way that neither this country nor any other country in the world has ever seen before.I am sad, in a way, that we have not reached the conclusion that I wanted on a matter about which I feel strongly—children in care. However, I am encouraged by the idea that over the next 16 years—the next generation—people who work with children, and children themselves, will have the opportunity to determine the way in which the development of child trust funds may be adapted, adopted and improved to support children's lives in ways that we have perhaps not been able to foresee readily during the Bill's parliamentary stages.
Some grand ideas were expressed in Committee by not only the Government, but the Opposition. Ideas on working with and supporting children with disabilities and the way in which trust funds could be adapted to meet their needs in a new future of social care are important and point the way forward. A good Committee considered a good Bill that implements a truly inspirational idea and gives us something for the future of which we can all be proud.
6.23 pm
Mr. Laws: The hon. Member for Lancaster and Wyre (Mr. Dawson) started his speech by saying that he was not always invited to serve on Committees to consider financial Bills, and that he had not expected to enjoy his experience in Committee. I share his view that our scrutiny of the Bill has been especially interesting. I warn him not to read too much into his experience on that Bill Committee, however, in case any of his Whips come running to ask whether he wants to serve on the Finance Bill Committee. I assure him that that is an altogether different prospect—I give him that advice freely and constructively.
We have been engaged in a good constructive process over the past few weeks. Our consideration of the Bill has undoubtedly been interesting because whether one agrees or disagrees with the Government's proposals—we have disagreed—their effects will clearly be felt by many families throughout the country, so it was important for us to get the Bill right and amended as best we could. I pay tribute to the Financial Secretary for her constructive approach throughout our proceedings and her patience and tolerance when I pressed her on Japanese equity markets and other such matters on many occasions, without necessarily getting very far.
It has also been a pleasure to work with the hon. Member for Tatton (Mr. Osborne), who on occasion has been more critical of his own amendments than of the Government's, and has brought great honesty and candour to the Conservative Front Bench. Now we accept that the hon. Gentleman speaks for the Conservative party on this issue, and after its previous leader went out of his way some time ago to criticise the proposal, the hon. Gentleman has clarified its position on this matter.
I also pay tribute to the Clerk of the Committee, who was extremely helpful to Opposition Members in particular, especially as those on the Front Bench for both parties were relatively inexperienced. His assistance in the drafting of amendments was particularly useful. In addition, I thank those who chaired our proceedings, and the Minister's staff, who no doubt had to do a great deal of work in responding to the amendments.
I also thank the Minister for amending certain parts of the Bill to take on board some of the considerations expressed from the Opposition Benches. She mentioned the important issue of account management at the age of 16, on which the Government have made genuine progress. It is also clear that they will introduce regulations to deal with the issue of terminally ill children, which is extremely important, and I welcome the fact that the Minister has made it clear that no charges will be imposed on transfers.
There are a number of issues that we hope the Minister will return to at some stage, either because of undertakings that she has given or because the passage of time proves that our concerns were justified. In particular, I drew attention to the minimum subscription level, which we remain uncomfortable about leaving at £10. We would like to see the accounts more open to low-income savers. I also drew the hon. Lady's attention to the issue of children in care. She has agreed to look into the matter and review the progress of our support for children in care in its totality.
I have often expressed my concern about the emphasis on equity-based investment for the accounts to be opened by the Inland Revenue, including the accounts of children in care. I am pleased that the Minister said tonight that she was thinking about how that can be dealt with, including through the involvement of the Official Solicitor. If I were the Official Solicitor I would be pretty nervous about taking the responsibility of monitoring the accounts and investment returns, unless I had a guarantee that my time in that job would not last the full 18-year life of a child trust fund account.
We pressed the Minister on access to the accounts for 16-year-olds, particularly those in full-time work. I acknowledge that it seems unlikely that she will change her mind on that subject.
In Committee we had debates, which we did not air again tonight, about the interaction between child trust fund accounts and the benefits system, including issues such as the deprivation of capital. There was not much movement from the Minister on those issues in Committee, but I hope that she will keep them under scrutiny, so that if it turns out that some of the concerns were justified, the Government will be able to respond to those concerns as evidence bears them out.
I am afraid that in the final stages of Third Reading, I shall add a somewhat discordant note. As the Minister knows, we do not share her enthusiasm, and the enthusiasm of her hon. Friends and most Conservative Members, for the Bill. Our reservation is not based on the details—important, but details none the less—that I have just outlined. Our concern is about the bigger issues involved in the Bill—whether it will succeed in doing what the Government have said it will, and to some extent whether the Government are spending the
large amount of money involved in the most effective way, particularly if they are concerned about child poverty.
Mr. Love: I should like to ask the hon. Gentleman the question that he has been asked throughout the passage of the Bill. He was constructive in Committee, and has been the same so far on Third Reading, and that constructive approach included tabling amendments that would have enhanced the Bill. Does he see any contradiction between that and his opposition to the Bill overall?
Mr. Laws: The hon. Gentleman may not be surprised to hear that I see no contradiction at all. We said at the beginning of the debates on the Bill that we were fundamentally opposed to it, because we did not believe that it would achieve its objectives, and because we thought the money could be better spent elsewhere. We made it clear that we would seek to amend the Bill, in Committee and elsewhere, as effectively as we could, to improve it. That seemed the sensible and constructive thing to do.
Nobody has mentioned in detail, although the Financial Secretary may have touched on them, the four fundamental reasons that the Government set out to justify the introduction of the child trust fund account. I shall run through them briefly, so that we can see whether the Government have satisfied the House that those objectives will be met. The first two seem to be more or less the same—first, to build on financial education to help people make better financial choices, and secondly, to help people understand the benefits of saving and investing.
We have questioned, as have the Institute for Fiscal Studies and others, whether the child trust fund accounts will succeed in those objectives, and whether money invested in financial education in schools could achieve that out-turn more effectively. After all, it was not until the past couple of days that the Financial Secretary accepted the proposal that 16 and 17-year-olds should be able to manage their own accounts, and that children should have any involvement in the running of those accounts. They were to have been run entirely by their parents, which seems an odd way to give people financial experience and education. We do not believe the Government have demonstrated that the large amount of money to be spent on the Bill satisfies those two criteria. The Minister referred in Committee to evidence-based policy. On these two objectives, we see a lack of clear economic evidence that the Bill will have the effects that the Government intend.
The third stated objective was that the Bill would ensure that in future all children had a financial asset at the start of adult life. That seems to be at odds with the Government's recent decision to encourage students to take on greater debt to fund themselves through university. The question is whether people need financial assets at particular periods of their life, or whether there is a rhythm in the way in which people earn money and save money, which means that the Government should leave those matters to people themselves, rather than interfering. There seems a particular contradiction between the Government's determination to give young people, through the Bill,
assets at the age of 18, and their willingness to encourage people to take on debt at a similar age to fund themselves through university.
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