Mr George Osborne (Tatton, Conservative)

I beg to move amendment No. 180, in

page 6, line 18, leave out paragraph (b) and insert—

'(b) the children performing voluntary work for charities of a kind specified by regulations.'.

We come to the clause that covers further contributions by the Inland Revenue. The matter is a little confusing, because we held the main debate on the subject earlier at which time we discussed the contributions at the ages of seven, 11 or 16 of either £50 or £100. My amendment is an attempt to broaden the scope of the Bill by saying that children should be given a further contribution if they performed voluntary work for charities of the sort specified by Government regulations. It is a good idea. At present, the clause is general. It says that the circumstances in which a further contribution can be made are either when a child reaches a certain age or

''such other circumstances as may be so prescribed.''

What are those circumstances? My amendment is an attempt to tease them out by saying that the circumstances could be those in which a child is performing voluntary work for a charity. We could use child trust funds as an incentive, by providing a small contribution to someone's child trust fund to involve the child in volunteering, working for a charity and so on. I think modestly that that is an excellent idea.

I notice that the Minister hinted that she was thinking along such lines, when she appeared before the Select Committee. When asked a patsy question by the hon. Member for Wallasey (Angela Eagle), she said:

''as the Child Trust Fund develops we may think about how to broaden its appeal and increase its potential and spread assets more widely. Indeed, we have left the regulations quite flexible so we can introduce a top-up at the age of 7: we could introduce further tops-ups along the way if we thought that was desirable. Other people—academics and think tanks and so forth—have suggested that we may be able to combine the Child Trust Fund with our credits for voluntary work, for example.''

I fall into the category not of academics or think tanks, but of ''so forth'' by tabling the amendment because I want to know what the Minister was thinking, how far developed were the ideas and why she has left herself the option in clause 10 of

''other circumstances as may be so prescribed.''

Is it because she was thinking of giving some kind of credit in return for voluntary work for charities? I want to know what the hon. Lady is thinking.

Mr David Laws (Yeovil, Liberal Democrat)

I want to speak briefly about the amendment. It is not an excellent idea. It is well-meaning tinkering, but it is unnecessary.

Mr George Osborne (Tatton, Conservative)

I should have thought that the hon. Gentleman would have loved it then.

Mr David Laws (Yeovil, Liberal Democrat)

I should have thought that the hon. Member for Tatton would not table such an amendment. It seems out of spirit with the traditions followed by the Conservative party such as simplicity and focusing public expenditure where it is most

needed. The amendment would be administratively complicated. There is no clarity that the public expenditure involved would have a significant gain, both in terms of its incentive effect and in comparison with other uses. Its worst aspect is that it is attempting to link a payment for something that is supposed to be voluntary work. I question what signal the hon. Gentleman is trying to send out about voluntary work. Presumably he believes it to be a good thing because people do not need to be paid for it and there is an element of voluntary choice. However, under the amendment, he is linking it to a payment that will be made to an account that would have the benefit of neither making the work truly voluntary nor even of giving a payment that would be a genuine incentive because, in many cases, people will not receive it for five or 10 years. The amendment is not helpful, and I hope that I have persuaded the Minister, if she were minded to go down such a route, to resist strongly.

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

It is always good to have a real debate in Committee. As the child trust fund develops there will be conflicting arguments about how it could be used in future. As far as I am aware, we are the first country that intends to introduce a nationwide policy of this sort. I welcome the fact that there is active debate about how it could be developed, and I am pleased that the hon. Member for Tatton is quoting my evidence to the Treasury Committee back at me so often.

There have been gatherings of people who are interested in the policy and who have tried to think through how it might apply more widely in future. One idea is to use the policy to promote voluntary activity among young people. However, I put it to the Committee that the young people that we are talking about will not be doing voluntary work for some time yet. It would be premature to commit to such a policy while we assess the merits of arguments, such as that of the hon. Member for Yeovil, about whether it would really encourage the voluntary spirit or whether it would act against it.

If we were to encourage credits to be given for voluntary work, there would be no need for the Revenue to be involved; the proposal made by the hon. Member for Tatton is unnecessarily restrictive. If charitable organisations want to arrange for credits to be given to children who participate in voluntary work, nothing in the regulations prevents them from doing that.

With the child trust funds, we have set out a foundation on which we shall build, and I look forward to further debate on the subject, but, for the reasons that I have set out, I urge the hon. Gentleman to withdraw his amendment.

Mr George Osborne (Tatton, Conservative)

I am fascinated to discover that there have been gatherings of people who are interested in the Bill. I have never been invited; I have been left out. I suppose, looking round the Room, that we could not call this a gathering of people who are interested in the Bill; we have a small proportion of people who are interested in the Bill.

The Minister said that she was keeping open the possibility of some kind of Government scheme, which would be the effect of my amendment. I agree that the Bill gives her the power to do that, because of the general catch-all phrase,

''other circumstances as may be so prescribed.''

She is quite right to say that charities, and anyone else, could give credits under the scheme. We will have to await developments.

I am sorry that the hon. Member for Yeovil was not enamoured of my tinkering. However, I did get a priceless quote out of him. He referred to the Tory traditions of ''simplicity and focusing public expenditure where it is most needed''. I am going to bottle that and send it to the central office Liberal Democrat unit.

Mr David Laws (Yeovil, Liberal Democrat)

Will the hon. Gentleman confirm that I was complaining that, judging by his role in these proceedings and the Conservative party's support for this dreadful Bill, those great traditions have been lost?

Mr George Osborne (Tatton, Conservative)

If I am guilty of that, the hon. Gentleman should note that I am about to withdraw the amendment, but I will stick with the quote. I will let the Committee into a little secret. The hon. Gentleman is the Member whom we think most likely to defect to us, but we might have to wait until we have red boxes and ministerial cars to tempt him over.

Mr. Laws rose—

Mr George Osborne (Tatton, Conservative)

I suppose that I have to give way so that the hon. Gentleman can state on the record that he will never defect to us.

Mr David Laws (Yeovil, Liberal Democrat)

The hon. Gentleman is discussing a prospect even more distant than that of people receiving the proceeds of child trust funds in 2020.

Mr George Osborne (Tatton, Conservative)

That is what we in politics call a non-denial denial. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr David Laws (Yeovil, Liberal Democrat)

I beg to move amendment No. 168, in

clause 10, page 6, line 23, at end add—

'(4) The amounts prescribed by, or determined in accordance with, regulations under subsection (1) shall be announced by the Chancellor of the Exchequer at least 2 years before the date of the first payment of the amount concerned.'.

It has been fascinating to hear about the other amendments to this clause. Given the tendencies towards well-meaning tinkering that the hon. Gentleman has displayed, we may well be looking to send membership application forms out to him in time.

Amendment No. 168 requires the Government to provide us with information about intentions that are not in the Bill or in regulations. The Chancellor seems to be holding for himself the power to determine the timing of the further contributions that will be made by the Exchequer. Why should that be left to the Chancellor to determine? Why will the Minister not accept the amendment, which simply suggests that the amounts and the timing of the payments should be

announced by the Chancellor at least two years before the payments are made?

The purpose of the amendment is twofold. First, there is a real concern about what will motivate the timing of the payments. We know so far of only two payments that will be made under these provisions, and they are to be made in 2005 and 2009. Even the Minister has the good grace to smile, because she obviously sees the direction in which my comments are going. All hon. Members know that the link between 2005 and 2009—particularly, I suspect, in the mind of the Chancellor—is that they are the most likely dates for the next two general election campaigns.

We can already envisage the run-up to the 2005 campaign: large numbers of cheques going out to people throughout the country because of the Bill, with a 7 per cent. supplement on the eve of future general elections. The Chancellor is farsighted, and he may already be thinking ahead to the days when he will have passed responsibility for the Exchequer to someone who is currently a more junior Minister—perhaps even the Financial Secretary herself—and anticipating his time to come as Prime Minister. He is looking towards the 2009 election, when he has arranged for the second payment to be made to children at the age of seven, and anticipates a further set of cheques going out on the eve of that election.

Perhaps we can anticipate now the timing of future payments to children under the Bill, because presumably they will occur four years on from 2009, and so on. They will happen to be announced in each Budget statement on the verge of a general election. I can see Labour Members imagining that and sharpening their pencils to get their election addresses ready for future elections, in which they will boast about the success of this policy. Surely it is inappropriate for such a great Government initiative to be managed in that way and for such key decisions to be announced on the eve of general elections. That seems to be the pattern emerging from the Bill. Surely we should insulate those decisions.

Mr Harry Barnes (North East Derbyshire, Labour)

Will the proposal not be inhibitive? If there are positive economic developments in a particular year the Chancellor may feel that the potential exists for an announcement in the Budget that a considerable contribution will be made to child trust funds. If that has to be done two years in advance, it might not fit in with how the economy develops year by year.

Mr David Laws (Yeovil, Liberal Democrat)

The hon. Gentleman is obviously anticipating the Budget problems that the Chancellor is having and his difficulty in funding some measures. If we are trying to engender in people a spirit of the long term, and a commitment to savings and reliability, we surely should be able to budget two years ahead for the payments that will be made. I am not suggesting that the Chancellor should announce today the payments for the next 18 years or that he should specify the levels of funding at ages seven, 11, 15 and so forth. I am suggesting that the payments should not be left to the last minute as part of Budget statements made on the eve of general elections. That seems to be the pattern in the Bill.

I return to my response to the hon. Gentleman's comments. If we want the child trust fund process to educate people about the importance of saving, predictability, planning for the future, security and stability, we want them to have some knowledge of the payments that are to be made into their accounts, and the way in which the Government are to respond. We do not want Governments to make up those amounts as they go along, on the eve of general elections or in response to short-term financial pressures. We want a bit of certainty, and some insulation from the electoral process. I hope that the Financial Secretary will take the opportunity that I am giving her to stop the child trust fund being used—or abused—in this way in the future.

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

For the record, I totally repudiate the hon. Gentleman's comments. The child trust fund is a manifesto commitment, and it is right that it should be instituted before the next general election as we have pledged.

The Committee has debated at length whether seven is a more appropriate age than five to receive the first top-up payment, and it has been accepted that it is the more appropriate age for the next endowment to be received.

As for whether we should announce two years in advance the value of the endowment that is likely to be paid, I agree with my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) that that is overly restrictive. If we were to do that, we would have to set a cautious level and we might, when the time arrives, wish to have more flexibility for future generations. That is why the child trust fund is, in general, formulated to provide flexibility for future decisions.

Those matters will not necessarily be determined by me. I may or may not be in this job at that time, but it is not right for me to make a commitment about something that would more appropriately be decided in the run-up to the payment in 2009, particularly as that will be after the next election. For those reasons, I ask the hon. Member for Yeovil to withdraw the amendment.

Mr David Laws (Yeovil, Liberal Democrat)

I am not entirely convinced by the Minister's explanations. All I am asking her to do is make an announcement two years in advance. The Government are producing many proposals, not least on top-up fees, on which there is a contrast between their position now and that in their manifesto, and on which measures will be introduced after the next general election.

I will not press the amendment to a Division, but we will return to the specific issue of child trust funds and the timing of elections when we debate other amendments. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 10 ordered to stand part of the Bill.