Clause 7 - Transfers
Child Trust Funds Bill
11:15 am
Mr George Osborne (Tatton, Conservative)
I beg to move amendment No. 121, in
clause 7, page 4, line 27, at end add
'provided that no transfer may take place without the agreement of a responsible person'.
The amendment provides that a CTF account can be transferred from one provider to another only with the agreement of a responsible person. Like the previous amendment tabled by my Liberal Democrat colleague, it is a probing amendment. When I was reading the Bill and trying to frame amendments to keep us all busy, it struck me that this idea may provide some important consumer protection. The explanatory notes say:
''This clause gives the Treasury power to make regulations allowing a responsible person to change the type of CTF account, e.g. from a cash to a stakeholder account, and to move a CTF account from one provider to a different provider.''
Our previous debate was about the responsible person making the decision to transfer an account, either changing the type of account or changing from one provider to another.
As I read it, however, the Bill would allow a financial provider to transfer an account without the consent of the responsible person, and surely that is unacceptable. If, for example, a financial provider decided to sell its book of CTF accounts to another provider, or if it wanted to wind down that part of its business and transfer or sell it to another provider, it should seek the consent of the account holders. In such circumstances, account holders should at least be given the option of going somewhere else if they do not want to move with the bulk of the CTF accounts. The Minister may say that they can exercise a choice in any case, but I presume that they would be able to exercise it only once the move had happened.
It is possible to envisage companies going bust, being taken over or changing the nature of their business. They may decide that, because of the charge cap set by the Minister, CTF accounts are not giving the sort of return that they had hoped for and that they will close down that part of their business. The amendment merely tries to ensure that when they do so, they seek the agreement of the responsible person. It would be an important consumer protection.