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Dr. Jenny Tonge (Richmond Park) (LD): I thank the hon. Lady for giving way, and I apologise for missing the beginning of her speech. As a mother and grandmother, I am very interested in this issue. Can the Minister tell us the amount of money that will have accumulated by the time a child is 18? At the minimum level, having received £250 at birth and a few additions along the way, it will not amount to very much. Also, is she not worried that an 18-year-old might spend the money incorrectly?

Ruth Kelly: I shall answer the first part of the hon. Lady's question first. Table 3.1 of the proposals document that we published recently illustrates the impact of endowments at the age of 18, given growth in the fund. For example, if there were no additional savings, a child with an initial sum of £250 would, on a very cautious assumption, have accumulated £456 by the age of 18. However, a child from a poorer background who had received the full £500 endowment would, assuming that they had had no further

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Government top-ups or additional contributions, have accumulated £911 at the age of 18. I suggest that such a sum could have a significant impact.

Dr. Tonge: What exactly does the Minister think that £900 is going to fund in 18 years' time?

Ruth Kelly: I suggest that the hon. Lady look at the research based on the national child development survey, which suggests that a sum as low as £300 could have a significant impact on someone's future behaviour. At the moment, the average young person between the age of 18 and 25 has zero financial assets, and that is something that we intend to change.

David Hamilton (Midlothian) (Lab): As a grandparent of five grandchildren, I believe that this will be a very good way for grandparents to contribute to their grandchildren's future.

Ruth Kelly: I congratulate my hon. Friend on his good fortune, and I certainly suggest that he make contributions on behalf of his grandchildren. He is right to say that contributions can be made by a wider group of people, and not just by the child and the child's immediate family. Grandparents are perhaps the key people to the development of this policy.

Mr. Andrew Robathan (Blaby) (Con): I congratulate the Minister on having four children under the age of six. No doubt she will be hoping to help them to save, and we should all encourage our children to do so. Regarding the amounts involved, however, what does she think average university fees will be in 18 years' time?

Ruth Kelly: The hon. Gentleman's question ties in with the point made by the hon. Member for Richmond Park (Dr. Tonge), who asked whether we would restrict a young person's use of the money at the age of 18. It is my judgment and that of the Government that the person best placed to make that decision is the child at the age of 18. It is right that the child should have the full chance to use that money in whichever way they think is in their own best interest. That may be to pay for further education. It may be to put down a deposit on a tenancy or a home. They may want to buy a van, for example, to start up a small business. It is not right for us to try and restrict people's opportunities, and at present they are restricted.

Several hon. Members rose—

Ruth Kelly: I give way to the hon. Member for Buckingham (Mr. Bercow), whom I have come across several times in previous capacities.

Mr. John Bercow (Buckingham) (Con): As a proud father of nine days, 14 hours and 32 minutes, I have a close personal interest in the matter, as the hon. Lady will understand. Given that on the most cursory examination of the Bill, it appears that no fewer than 16 of the 31 clauses allow for secondary legislation and order-making powers, will the hon. Lady, first,

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guarantee that we will have a draft of all those regulations before Report stage? Secondly, can she advise me whether the procedure in respect of those regulations will be the negative procedure of the House, or its affirmative counterpart?

Ruth Kelly: I can advise the hon. Gentleman that the regulations will be laid in draft for full consideration during the passage of the Bill. I cannot advise him on the detail of every regulation, as I have not considered the regulations in draft. I refer him to the comments made by the Association of British Insurers in its memorandum to the Treasury Committee, which stated:

We are determined to get that right, and we have made significant progress.

Several hon. Members rose—

Ruth Kelly: I give way to my hon. Friend the Member for Hastings and Rye (Mr. Foster), but this must be the last time before I make more progress.

Mr. Michael Jabez Foster (Hastings and Rye) (Lab): Every hon. Member will probably claim parenthood or grandparenthood. In my case, my grandchildren, Billy, Thomas, Ashleigh and Ellie, are all aged five or under, but are too old to gain the benefit of the trust fund. There must be a starting point, but can my hon. Friend assure me that they will be able to benefit from the trust fund in terms of tax relief, if not in terms of bounty?

Ruth Kelly: We have considered the matter closely. It could well be that parents of children with siblings older than the child who benefits from the endowment will wish to take out a policy that mirrors that of the child trust fund. I suspect that if the demand exists, the industry will react to that and develop products that are almost identical. Under the current legislation, it is possible for children to benefit substantially from tax relief, and I imagine that any new accounts would use the existing reliefs in the system.

I turn to financial education. There is a real challenge for us as a Government to improve people's financial awareness. For some people, the child trust fund will be their first exposure to saving and investment. We have commissioned research to find out the best way to help such people make these quite complex decisions, and we will work closely with the Department for Education and Skills, the Financial Services Authority and other organisations that can help us design and deliver the financial support and information that people will need to manage their accounts.

I welcome the evidence from the National Consumer Council, which stated:

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Mr. James Plaskitt (Warwick and Leamington) (Lab): My hon. Friend mentions the importance of financial education, and the child trust fund will be the first time that many people encounter risk. Will she take on board the Select Committee's recommendation that there should be an easily understandable risk evaluation attached to all the wrap-around products that may head up the child trust fund once it is up and running?

Ruth Kelly: My hon. Friend will be pleased to hear that I have been studying the conclusions of the Treasury Committee report in great detail this morning. We want to communicate the issues to the best effect. That is why we will commission research, and of course that research will take account of the conclusions of the Select Committee report.

The Bill places a duty on the Government to make child trust fund payments to eligible children. It sets out the framework for operating the child trust fund and includes powers to make regulations covering some of the more detailed issues. In developing the child trust fund, our aim has been to keep the processes as simple as possible for all concerned; families, providers and the children themselves.

All children born since 1 September 2002 who live in the UK and for whom child benefit is claimed will be eligible for the child trust fund. Entitlement to a child trust fund will be linked to an award of child benefit, which nearly every parent in the country claims. That removes the need for a separate claim form and process for the child trust fund.

Child benefit cannot be claimed for children in local authority care, but the Bill ensures that these children will not miss out. Children in care include some of the most disadvantaged children in our society and the Inland Revenue is working with representatives of local authorities and central Government to ensure that appropriate arrangements are put in place for those children.

Bob Spink (Castle Point) (Con): I am grateful for what the Financial Secretary has said about children in care, on which the Government are making progress. However, these children—unlike others—will not benefit from additional contributions and will be disadvantaged. Is there anything we can do to correct that problem?

Ruth Kelly: The hon. Gentleman makes an important point. We are working closely with children's charities and local authorities to think about the way in which the role of local authorities might develop in future. Certain local authorities are enthusiastic about the potential the policy offers them, for example, to make contributions on behalf of the children in their care. That will evolve after the policy has been put in place.

When the award for child benefit is made, the parent or guardian will be sent a child trust fund voucher and an information pack. The pack will include details of all providers, a step-by-step guide to the opening of an account and a clear and objective explanation of the stakeholder child trust fund account, which all providers are required to offer. Parents, or someone else with parental responsibility, can take the voucher to the provider of their choice to open an account.

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