Clause 4 - Inalienability
Child Trust Funds Bill
9:30 am
Mr George Osborne (Tatton, Conservative)
Sadly, we are not here in full numbers, or we might be able to make some constructive changes to the Bill.
The clause concerns what the Government call inalienability. That is to say, one cannot assign a child trust fund or have an agreement to charge against a child trust fund investment. Subsection (2) states:
''On the bankruptcy of a child by whom a child trust fund is held, the entitlement to investments under it does not pass to any trustee or other person acting on behalf of the child's creditors.''
I tabled the amendment out of curiosity because I want to know under what circumstances a child can be declared bankrupt. Given that we have previously had debates about how they are not able to enter enforceable contracts, it seems a bit harsh to declare a child bankrupt. However, if there are such circumstances, and the Minister tells us what they are, why should creditors, who might be suffering hardship or owed substantial sums, not have access at least to additional savings put into a child trust fund, if not the original Government contribution? I can see why the Government might want to protect their original contribution, but why, in what are presumably extraordinary circumstances, should a creditor not have access?
If one can apportion blame in such cases, and the bankruptcy was the child's fault—perhaps it entered into an ill-conceived and ill-advised financial arrangement that led to the bankruptcy—surely losing the additional savings in the child trust fund would be a good lesson about the dangers of doing such things. However, if the bankruptcy was the fault of the parents, and the additional savings were put in to the child trust fund by the parents, should not the creditors have the right to access them?