Clause 12 - Subscription limits
Child Trust Funds Bill
9:30 am
Ms Ruth Kelly (Financial Secretary, HM Treasury; Bolton West, Labour)
Although I understand the motive behind the hon. Gentleman's proposal, I have to point out that the scheme is not nearly as straightforward as he suggests. In designing the accounts, we have attempted to keep administration costs as low as possible, partly because of the charge cap requirements. The hon. Gentleman argues, reasonably, one might at first think, that those who are outside a charge cap, if that is determined in the regulations, should be allowed to accept shares and gilts on a voluntary basis.
There are problems, however. A provider who accepted shares and gilts would have to arrange for a valuation of the shares at the time of receipt, which could take two to three weeks, and it would have to keep track of that batch of shares to ensure that their value did not exceed the annual limit that a parent, relative or child was able to contribute to the fund. If the value of the shares exceeded the limit in any year, the contributions would have to be returned to the family.