Mr David Laws (Yeovil, Liberal Democrat)

I beg to move amendment No. 171, in

clause 7, page 4, line 27, at end add—

'(c) additional charges can be imposed by providers for transfers allowable under this section, including the maximum amount of such additional charges.'.

The hon. Member for Tatton has been refreshingly candid about some of his amendments, so I start by acknowledging that I am not sure that I have framed mine in precisely the way that I intended. I shall describe this—as we do when we are not sure that an amendment has been framed as precisely as we would

want—as a probing amendment. The clause allows for transfers of CTF accounts. It gives the Treasury the power to make regulations to allow a responsible person to change an account from, for example, a cash to a stakeholder account, or to move an account from one provider to another.

To some extent, the discussion of amendment No. 150 returned us to a debate that the Committee had on the first day of our proceedings, when the Minister was asked what she had in mind for the charges that will be allowable for the management of CTF accounts. Amendment No. 171 invites her to tell us more about what charges she envisages applying to transfers, either between two CTF accounts with the same provider, or from one CTF provider to another. Does she intend that such potential costs will be covered by the charge cap that will be set for all CTF accounts? Will there be special provision for charges to apply in those circumstances? I put directly to the Minister the question that I wanted to ask earlier: when shall we know the levels of charge and the charge cap? We are waiting for them in advance of the publication of the regulations.

Ms Ruth Kelly (Financial Secretary, HM Treasury; Bolton West, Labour)

I can answer that point briefly. I am certainly attracted to the idea of the transfer being without charge, although we shall, of course, specify any decision when the regulations are laid. I repeat to the Committee that that will be during the passage of the Bill in the Commons. We try to ensure that the information is available at the earliest possible opportunity, so that there is maximum time for debate. I assure the hon. Gentleman that that continues to be the case. However, to clarify one point in which I am sure he is interested, recovery of the necessary costs of effecting a transfer, such as share dealing costs, and stamp duty costs on the sale of purchases of shares, would be allowed, and it would not count towards the stakeholder charge cap. I am minded to try to ensure that every other aspect of any transfer is free.

Mr David Laws (Yeovil, Liberal Democrat)

I am very happy with that answer. I hope that the regulations will emerge before the last quarter-hour or half-hour of the debates on the Bill, either in Committee or at Third Reading. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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.

Ms Ruth Kelly (Financial Secretary, HM Treasury; Bolton West, Labour)

I sympathise with the point made by the hon. Gentleman; we want to ensure that the responsible person is contacted, and that they are able to provide consent in every conceivable circumstance. However, in certain circumstances, and in order to avoid disadvantaging the child, we may want to provide for transfers to occur without the responsible person's authority. For example, in the case mentioned by the hon. Gentleman of providers ceasing to conduct CTF business, we cannot force them to continue that business indefinitely; that cannot happen in a market economy.

If CTF accounts are to be transferred to a new provider and there is no responsible person, it is important that we see to it that the accounts are continued with that new provider. We would not want a child to be detrimentally affected by such changes. Such circumstances would of course be exceptional. Indeed, we discussed earlier the need for a duty of care and management of accounts by the Inland Revenue. I suggest to the hon. Gentleman that this is precisely the sort of case in which we would like the Revenue to operate such a duty to ensure that children without a responsible parent are not disadvantaged by transfers.

Mr George Osborne (Tatton, Conservative)

The Minister is making a drafting point. The amendment may not be as broadly drawn as it should be; perhaps it should state that no transfer may take place without the consent of the responsible person or, where no such responsible person exists, without the consent of the Inland Revenue. The principle is that a CTF provider should not be allowed to sell off its funds, or to merge, without the

consent of those responsible people who manage the funds on behalf of their children.

Ms Ruth Kelly (Financial Secretary, HM Treasury; Bolton West, Labour)

I do not suppose that the hon. Gentleman is trying to argue that a holder of a CTF account should have a veto over a firm's strategic development plans, but it is important that the party responsible for the fund has the option to move elsewhere. As the hon. Gentleman pointed out, it is at all times open to the responsible parent to transfer the account to a different provider, and I see no reason for additional safeguards. For that reason, I suggest that he withdraw the amendment.

Mr George Osborne (Tatton, Conservative)

I shall have to take what the Minister says on trust, and hope that sufficient other safeguards will be in place to protect consumers in such circumstances. I do not suggest that a single child

trust fund could hold up a great financial merger. I merely suggest that before accounts were transferred, their owners' consent would have to be sought. If consent is not given, account holders should be given the option of transferring to another provider. I assume and hope that a responsible financial provider would keep its CTF account holders fully appraised of what it was doing. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7 ordered to stand part of the Bill.

Further consideration adjourned.—[Jim Fitzpatrick.]

Adjourned accordingly at twenty minutes past Eleven o'clock till this day at half-past Two o'clock.