Clause 4 - Inalienability
Child Trust Funds Bill
9:30 am
Ms Ruth Kelly (Financial Secretary, HM Treasury; Bolton West, Labour)
The hon. Member for Tatton (Mr. Osborne) asks whether a child can be made bankrupt. In law, a
child can be made bankrupt—for example, if he misrepresents himself to be over the age of 18 and enters into contracts, those contracts may be binding on him. In ordinary circumstances, it is not possible to have an enforceable contract, but if the child has misrepresented his age, it can be possible. A child could start a business and buy stock, pretending to be 18. If he could not then pay for the stock, the supplier could sue, resulting in the bankruptcy of the child.
The hon. Gentleman asks why, if there were to be such a case and it was clearly the fault of the child, the child should not lose the assets. This touches on a centrepiece principle of the Bill. The assets should be locked away until the child reaches maturity at the age of 18.