Clause 40 - Individual investment plans for children

Part of Finance (No. 3) Bill – in a Public Bill Committee at 11:00 am on 24 May 2011.

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Photo of David Hanson David Hanson Shadow Minister (Treasury) 11:00, 24 May 2011

I am grateful to my hon. Friend for those points. I will put my hands up when I know that we have had a discussion. We lost the battle in Committee and in the House of Commons over the child trust fund, but eventually, through persistence both outside and inside this House, we have won the principle that there should be a support mechanism for looked-after children to help contribute to the child ISA. In particular, I pay tribute to my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) who assiduously raised this issue with the charities. As my hon. Friend the Member for Sheffield Central said, we need to know when the scheme will be up and running, when it will be UK-wide and whether there will be a minimum deposit in those accounts, which is something to which the Government have not yet committed themselves. Carers, supporters and people in local authorities need that information. We want a mechanism to ensure that we generate help and support for looked-after children who, at the age of 18, will leave residential care or foster care without the parental support that most others in society have.

Action for Children and Barnardo’s have a meeting today with the Department for Education. This is their first meeting with officials since the Chancellor’s announcement on 22 March. They say:

“We have obviously felt quite frustrated about this slow progress.”

That is not me saying that; it is them saying it to me. They go on to say:

“Like you, we are of course keen to get the scheme up and running as soon as possible, and will be pushing for accounts for looked after children to be established in autumn 2011 when Junior ISAs are expected to be made available for other children…We are pushing for a guarantee that this scheme will be UK-wide…We are pushing for a guarantee of a minimum deposit for each savings account (something not yet committed to).”

We still do not have clarity from the Government over the potential scheme for looked after children. Will the Minister give us a commitment today as to how the £5 million that the hon. Member for Erewash mentioned is to be invested in looked after children? What is the provider mechanism? What is the commitment? Who will organise this? How do people access it? What is the role of local authorities? What is the contribution and who will run the scheme? We need to have answers to those questions. If this amendment is passed, I have helpfully given the Minister three months’ grace to provide that information.

Amendment 98 gives an indication of what we want to see in the broadest sense of the word. It proposes that by 30 September, the Government publish a report on children’s savings accounts and saving across society, which would include the impact of Government policy. We tabled the amendment because we are conscious that since the abolition of the child trust fund, no information has been provided to show whether savings are being generated for children under the age of 18 to the same extent that they were before the abolition. At the time, we suggested that the Government carry out a review of the abolition’s impact by the end of this year, but they rejected that proposal; the amendment provides another opportunity for them to consider it.

I am taking a chance here, but perhaps the Government will accept the amendment and produce a report that shows that all my fears were unjustified—that people on low incomes are still contributing and saving for their children. Perhaps their report will blow me out of the water in October this year. If they wish, they could even time the report for the Labour party conference to make a real hole in our proceedings. They can accept the amendment, look at the impact of the abolition of the child trust fund and show that the Opposition need not have worried because their fears were not real and everything is hunky-dory in the garden.