Lords amendment: No. 7.

NOTHING

I beg to move amendment (a) thereto.

Lords amendment No. 7 is rather curious and a little troubling. It gives the Government the power to make payments to children in custody. Those children would, as I understand it, otherwise be excluded because no one is in receipt of child benefit on their behalf.

The amendment is curious for two reasons. First, it amends clause 10, which deals with further payments rather than initial payments. As I understand it, in some rare cases, children of 14, 15 or 16 may have a child trust fund opened for them for the first time. Such children may be in custody and, under the current legislation, I am unsure whether they would receive an initial contribution or whether they could have a CTF. The Government may want to correct that omission later.

Secondly, the amendment is curious because, in all the consultation documents and in Committee debates, the Government said that they were planning to make further payments into CTF accounts only when the child reaches the age of seven.

Even in the Home Secretary's Britain there are not many newborn babies in custody. I do not imagine that there are any seven-year olds there either. On the face of it, therefore, the amendment is pointless, as it is about paying money to children aged seven who are in custody, even though there are no such children. However, I suppose that the Government want to have the option of making further payments to children aged over 12, which is when children can be in custody.

I hope that the Financial Secretary will say whether there are plans to make a further payment into CTFs at the age of 14 or 16. In the initial consultation document, it was envisaged that payments would be made at three different ages. I cannot remember whether those ages were five, 11 and 16 or five, 11 and 14, but the proposal was something along those lines. Perhaps the Government are reverting to their original plan. I suspect that all will depend on the electoral timetable prevailing at the time the children reach the relevant ages.

However, amendment (a) addresses a more serious point. The Home Secretary has stoked up an endless debate about whether more children should be in custody. Children who commit what most of us would regard as fairly serious crimes are not put in prison, but are given community service orders and so on. By definition, children who are in prison have committed very serious crimes, and the House needs to pause and consider whether it is really a good idea to give them an unconditional cash windfall at some future date. What sort of message will that send to such children about punishment and reward in our society, and about what society thinks of their behaviour?

I do not say that such children should be excluded totally from receiving payments. I also recognise that the Financial Secretary might contend that my amendment could lead to some rough justice. For example, a child who is not in prison on his or her 16th birthday might have been in prison for three years before that, whereas a child might happen to be in prison for three or four days just when his or her 16th birthday comes around. That child would therefore lose out. I agree that that would not be fair, and so amendment (a) is conditional in two respects.

First, the amendment would merely give the Government a conditional power to introduce regulations. That means that they could choose to take up the power, or not. Secondly, it simply suggests that, before money is paid to a child in custody, there needs to be a report from the person who is legally responsible for the child—the prison governor, or someone of that ilk—that attests to the child's good conduct over the previous year.

The amendment would mean that bad behaviour was not rewarded, and that the Government would not be sending out mixed messages. The prison authorities could use the provision as an incentive to encourage good conduct, and as a way of steering troubled children on to a more responsible path.

That seems a matter of common sense. The House should consider the alternative. A child who commits a crime that is serious enough to cause him or her to be sent to prison might be so poorly behaved in custody that the person legally responsible is unable to attest to his or her good conduct. That child might also have had various privileges withdrawn in custody, or been subject to disciplinary action. However, he or she will suddenly get a letter from the Inland Revenue saying, "Congratulations on reaching the age of 16, here's a cheque for £100."

That would undermine the work of the prison authorities, and make life much more difficult for them. In some ways, such a letter could cut across what they are trying to achieve, and I can imagine prison governors getting extremely frustrated. Just when a governor wants to insist on a certain form of behaviour from a child in custody, that would be undermined by the Inland Revenue unknowingly sending a cheque. The child would pick up the cheque, wave it in the governor's face and say, "I've just got a cheque for £100. Obviously, some people in the Government do not think that I am behaving badly."

Amendment (a) is a perfectly reasonable and conditional provision. It would give the Government the option to take regulatory powers, but would not insist on that. It merely says that children in custody should receive a Government handout from the taxpayer only if they behave well.

I think that that is a pretty new Labour idea. It fits in with what the Home Secretary is doing—with parenting orders, child curfews and so on—to encourage good behaviour in children. Moreover, I emphasise that the amendment refers to children who have ended up in custody.

I hope that the Financial Secretary will accept the amendment. If not, I shall press it to a Division.

We support amendment No. 7, which deals with an anomaly in the original Bill, but we are not tempted by amendment (a), proposed by Mr. Osborne. He invited us to believe that it would unite new Labour and the Conservative party, and that is good enough reason for Liberal Democrat Members to be suspicious of it.

There are various practical problems with amendment (a). First, how likely is it that a young child who had committed enough crimes to be in prison would be deterred from similar behaviour by the fact that a payment would not be made to his or her CTF account—especially given that children cannot access those accounts until they are 18? I think that it is very unlikely that that would influence behaviour in any way.

Secondly, the amendment would be an enormously administratively complex and bureaucratic measure to enforce. For that reason, I am surprised that the Conservative party have proposed it. It could also create further anomalies between those young people who had committed crimes and been given custodial sentences, and those who had been given non-custodial sentences. Moreover, as Lord McIntosh explained in another place, it could create anomalies in respect of young people who had committed a crime but who were not in prison at the time of the reporting period, which is when the sanction proposed in the amendment would be implemented.

On top of that, the amendment could add a further penalty to the sentence being served by a young person. That does not seem sensible. Also, the Government's policy on CTF accounts is designed to give assets to children to help them, when they reach adulthood, to settle down, find employment and so on. To take that money away from children who—whether or not they have committed offences—are almost by definition the most vulnerable does not seem especially sensible.

For all those reasons, I am afraid that Liberal Democrat Members support the Government's position on this matter, and not the amendment tabled by the hon. Member for Tatton.

I am grateful to Mr. Osborne for explaining the reasoning behind his amendment, and to Mr. Laws for answering his points so eloquently. He has almost saved me the need to respond to the amendment myself.

As originally drafted, the Bill would have prevented payments being made to the CTF accounts of children held in legal custody. Child benefit is not paid for those children and the award of child benefit is the key eligibility requirement for CTF payments. As the hon. Member for Tatton pointed out, we have left ourselves the flexibility to decide whether there should be age-related payments above the age of seven in future. Should a Government decide to make payments to children at any age over 12, those children who are held in custody on the relevant birthday would not receive the payments.

We amended the Bill in the Lords to treat children in custody as entitled to child benefit purely for the purposes of the child trust fund. The amendment supports the view that children in custody should not receive those payments unless a responsible person informs the Inland Revenue that the child has been well behaved for the year prior to the relevant birthday.

Will the Minister deal with my point about the initial contribution to a child who opens a child trust fund when he or she is 14?

I do not envisage any circumstances in which that scenario will apply. Children who move to the United Kingdom after the age of 12 will either get child benefit if eligible, and therefore access to the child trust fund, or, if they go straight into custody, the child benefit will not be awarded and a child trust fund account will not be available to them until they have left custody. That is an extremely unusual case and I cannot envisage a situation in which we would want to open a child trust fund for the first time for a child who is in custody.

The hon. Member for Yeovil explained the practical, bureaucratic and administrative problems with the proposal. The argument touches on the principle of the matter. Only a small number of teenagers are held in custody—

It being one hour after the commencement of proceedings, Mr. Deputy Speaker put the Question, pursuant to Order [this day].

Question put, That the amendment be made—

The House divided: Ayes 92, Noes 263.

Question accordingly negatived.

Mr. Deputy Speaker then proceeded to put forthwith the Questions necessary for the disposal of the business to be concluded at that hour. Lords amendment No. 7 agreed to [Special Entry].

Lords amendments Nos. 8 to 13 agreed to.