Clause 27 - Commencement
Child Trust Funds Bill
11:00 am
Ms Ruth Kelly (Financial Secretary, HM Treasury; Bolton West, Labour)
The hon. Gentleman persists in defining the success of the child trust fund largely in terms of developing the savings habits of parents and encouraging the shift between consumption and
savings. Occasionally, he admits that it may impact on the assets available to a child at the age of 18, but he persistently ignores the objectives of helping people understand the benefits of saving and investing, and building on financial education to make people better aware of the financial choices that they face through their lives. If the policy is successful, 18-year-olds will have a different range of opportunities open to them. That aspiration lies behind the policy, but it is not easy to set targets for or to measure.
I shall tackle the specific point about targets for saving, and whether we should measure the success of the policy by how much money parents add to the account. I contend that the policy would be a far more significant success if children occasionally put a sum from their pocket money into the child trust fund account. That would result in a lower savings rate than the hon. Gentleman's implication that parents will pay a regular contribution, but it might have a more profound effect on the behaviour of an 18-year-old, and the choices that they subsequently make. Those reasons reflect the philosophy behind the child trust fund, which the hon. Gentleman clearly does not share, and his suggestions are therefore inappropriate.
The Bill represents an opportunity for families, parents and children. That does not mean that we will not monitor and regularly evaluate the plan as it progresses. We will of course set success criteria. They might include the extent to which parents understand the child trust fund, the extent that the fund increases savings by children as well as for children, and the assets built up in the long term. We would also examine the degree of financial awareness among children as well as parents.
Many objectives behind the Bill do not lend themselves to easy measurements and targets. The hon. Gentleman misunderstands the fundamental purpose of the Bill, and that is clearly expressed in his opposition to it. For that reason, I ask the Committee to reject the new clause and the amendments.