Mr David Laws (Yeovil, Liberal Democrat)

The key amendment is amendment No. 155; amendment No. 159 is a cross-reference to it. It deals with the way in which contributions to the child trust fund account will be treated for tax purposes. Here, we come to the contrast between the measures that the Minister is willing to take in order to protect the interests of those people on upper incomes, who may be making large contributions into the child trust fund accounts, and the way in which she seems to be treating the issues affecting those on low incomes, including the minimum subscription amount and the deprivation of capital.

Further interesting exchanges took place in the Treasury Committee. I hope that the hon. Member for Tatton will turn to the appropriate pages so that he can pick me up if I miss any relevant information. This time, I shall quote from another member of the Select Committee, not the hon. Member for Newcastle upon

Tyne, Central, at least to begin with. I have no doubt that the Minister will have enjoyed some robust exchanges with the hon. Member for Bury St. Edmunds over the years, and one usually thinks of him as something of a Daily Mail man. Indeed, most of his contributions to the Select Committee tend to end up in the Daily Mail, and the paper seems to be briefed before meetings have ended.

On this occasion, the hon. Gentleman paints himself as the scourge of the affluent middle classes, who will potentially benefit from the Government's proposals in the Bill. He is clearly worried that the Bill might simply end up favouring those people on middle and upper incomes, which is why he referred to it as a £500 million PR stunt. In his discussions with the Minister and the ill-fated Mr. Holgate, the hon. Gentleman presses the Treasury on who will benefit from the tax breaks, and on how much they will cost. He expresses the concern that for financially literate middle-class parents who are not getting a tax break at the moment it will be a tax break benefit. The hon. Gentleman says:

''It is the case, is it not, that it''—

that is the child tax credit and the associated tax changes—

''will help people who do not really need it?''

In the following proceedings, there is some pressure on Treasury officials to give an estimate of the costs of the decision by the Treasury and the Inland Revenue to lay aside existing tax regulations that relate to the amount of income that can be earned by children in their accounts without ending up with a tax charge being applied to the parents who have contributed to it. The existing provision states that if an individual

child earns more than £100 in interest income return from a particular financial asset in any financial year it is regarded as tax avoidance by the parent so a tax charge is applied.

In clause 13, the Inland Revenue has laid aside that tax legislation to allow people to have unlimited benefit from the tax relief, rather than apply the existing limits that are there to protect the interests of the Exchequer and the taxpayer. Mr. Holgate's initial assessment of the bid in terms of his cost estimate for tax relief—he described it as a ''starting bid to you'' in his evidence to the hon. Gentleman—was that it was ''negligible''. When questioned by the hon. Gentleman, he added:

''Yes, and we will see as time goes by.''

That is not particularly reassuring for the interests of the taxpayer. That issue was returned to by the Select Committee when the Minister came before it following the exchanges that had take place with officials earlier. She was pressed for her estimate of how much it would cost to set aside the income tax settlements legislation. She had obviously done some work, because she came up with a higher figure and said that it would be about £10 million.

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