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Norman Lamb: Will the hon. Gentleman say what he views as the solution to the means-testing problem that he identifies?

Mr. Cameron: We have to deal with the Bill as it is. If it were my Bill and my idea, I would opt for a flat rate. It is simpler to say that all children will receive the same sort of account and start with the same sum of money. As soon as means-testing is introduced, it creates unfairness and sends out a signal that saving is bad.

The second type of means-testing—on the way out rather than in—is perhaps the more serious. The Government's proposals are not wholly clear. When asked in the Treasury Committee about the problem of losing jobseeker's allowance because of the savings in an 18-year-old's account, Mr. Holgate said:

"We are aware of the implication and we cannot say at the moment what exactly we plan to do about it".

I know that, theoretically, they have 17 years in which to make up their minds, and the Minister said that she would keep the point under review, but it would be better to say now what the intention is. If we want to encourage people to save, we have to send clear signals.

I am not entirely certain about my third point; perhaps the Minister will put me right if I am wrong. I understand that subscriptions to the funds can be only monetary, and that equities or gilts can then be bought or the money kept in cash. Donations cannot be made in shares, for example. The Minister could look at that point. In some cases, godparents, parents or relations might want to transfer some shares to a child, and if we want a share-owning democracy, which the Conservatives definitely do, we should encourage the movement of shares into the new funds.

Fourthly, I agree with my hon. Friend the Member for Tatton and the hon. Member for Hastings and Rye (Mr. Foster) that parents of children born before September 2002 should be able to open these accounts. By all means, do not give them the £250 or the £500, but let them open the accounts and save for their children. It will be difficult, as many hon. Members have said, to explain to one child why they have this nice little baby bond building up and to another why they do not. The Minister should be generous about that.

Those are my small suggestions. I have one big one. I must, again, admit an interest, in that Ivan, my son, who is 20 months old, was born severely disabled. I have learned a lot from looking after him and coping with having a disabled child. I have learned as much again from parents of other disabled children coming to my surgeries to explain all the difficulties that they have in accessing funding, getting services and getting equipment. The Minister probably knows that in this country we do not support families who have disabled children very well. More children are surviving and living longer. The national health service has made huge advances in helping those children to survive birth, often with complex and difficult disabilities. But social services have not kept up. If the Minister has not read

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the Audit Commission report on services for families with disabled children, I recommend it to her. It is a superb piece of work, discussing patchy services and the lottery of provision depending on whom one knows, where one lives and how hard one pushes. It talks about equipment provision, saying how incredibly uneven it is and how often, for example—as I know from my own child—a wheelchair takes so long to arrive that by the time it does, the child has grown out of it.

Having disabled children means massive extra costs. As I said in an Adjournment debate, one problem is that many things are done outside the national health service by social services, and those families who do the most to try to help look after their child at home often receive the least. If a family packs it in all together, the state has to look after the child. If a family struggles to try to cope, there is not a lot of help.

Why do we not do something for those families—I say this selfishly, but I know that it will benefit others—through child trust funds? Disabled children with complex needs are living a lot longer now. Children, like my own child, who have cerebral palsy and epilepsy are living into their teens and twenties, and I hope that my son will. At 18 there is a real question about what to do and who is to look after those adults. Who is going to pay? My big idea is, therefore, to ask why we do not de-limit the amount of money that can be put into the baby bond for families with disabled children. Let the contributions go as high as we like. Anyone who knows someone with a disabled child will know that everyone wants to help—families, charities and friends. If we could allow extra money to go in, many families would have an ability to help their child to live a much more independent life in adulthood after the age of 18.

The other change that the Government could make for those families would be to allow some dipping into the fund before the child reached 18. Families with disabled children have to make major purchases—equipment such as prams, chairs, stair lifts and bath hoists. There are huge costs, and some sort of trust fund that could be dipped into—topped up without the £1,200 limit that the Minister mentioned for the general trust funds—could work very well.

I think that there is something in those ideas, and I hope that the Minister will take them away. They go with the grain of both the Government and the Conservative policy of giving people more independence in their lives. They go with the Government approach of saying that with disabled children there should be more freedom about spending benefits, often in a lump sum—the individual payment concept under which the money is given and the person decides what support or equipment to purchase. They would help some of the most vulnerable people in society, people who are disadvantaged through no fault of their own. I do not think that all that would be complicated to do: we know a lot about who looks after disabled children because of disability living allowance, and it could be done in conjunction with that.

I hope that the Government will look at my ideas; I hope that my Front-Bench colleagues will, too. I offer the idea freely to all. The Government have been accused of promoting child trust funds as a gimmick. I think that that is a bit unfair, but if they want to make them more real, my ideas would be worth pursuing.

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6.55 pm

Mr. Michael Weir (Angus) (SNP): I am probably one of the few speakers in the debate who is not claiming some benefit from it since both my children are far too old and I am, I hope, many years yet from being a grandfather.

The proposal has been a long time coming, since it was first announced back in 2001. The funds themselves will not be available until 2005. In principle, the idea of providing a capital sum for a young person reaching 18 has merit, but I am not convinced by the Prime Minister's argument that it is a way to tackle child poverty. The sad fact is that, despite the Government's claims, very many children in Scotland still grow up in poverty. Since 1999, there has been a 2 per cent. increase in child poverty, and since 1968, the rate of child poverty in Scotland has trebled, with the proportion of children living in poor households rising from one in 10 to one in three. Those figures come from the latest report of the Joseph Rowntree Foundation.

Against that background, I must ask how the measure will help those who grow up in poverty. The plain fact is, as many hon. Members have said, that the proposal will be of great benefit to those who are already well off. The chances are that their parents, rather than those of children who live in poverty, are already making some contributions for their future. The scheme allows families and friends to contribute up to £1,200 a year—£100 a month—to the fund. Few families who exist on low wages or benefits will be able to contribute that or anything like it, particularly if they have more than one child.

The hon. Member for Dumbarton (Mr. McFall) quoted from his Select Committee on the Treasury report the number of parents who are interested in the funds. The report, however, went on to note research on why parents do not currently save for their children's future, which came up with the completely unsurprising observation:

"The survey shows that one of the main reasons for not putting aside money for their children is that some parents just cannot afford to."

The report also noted the views of the Child Poverty Action Group:

"Despite higher initial payments for children from low income families, the reality is that many families are too poor to contribute. The tax relief provisions will be of greater benefit to the better off, since they are most likely to be able to top up the fund."

The hon. Member for Dumbarton and the Minister mentioned that 75 per cent. of parents surveyed were interested in the funds and would seek to contribute to them. I must ask how realistic that figure is. Many families simply do not have the funds. The way in which the funds are being structured will dissuade many families from attempting to contribute, because it seems that they are to be equity-based investments. I do not pretend to be an expert in equity funds—in any funds for that matter—but my experience is that such funds seek fairly substantial regular payments, not small weekly or monthly payments. Excluding many smaller building societies from being able to offer the funds—the Building Societies Association called that a "perverse" decision—will mean that many poorer families are excluded from the chance of taking out a traditional building society account into which small sums can be

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regularly paid in. It might not provide the returns that an equity-based investment would—in theory, at least, although many have not in the recent past—but it would give poorer families the opportunity to contribute to the trust funds. Almost every hon. Member who has spoken has noted that, if the funds are to be a success, families will need to contribute to them. Even a small contribution would make a big difference, but that would require allowing the use of traditional investment vehicles through building societies.

It all comes down to child psychology. I have two children, who are not so small any more, but I remember that seeing the money in their piggy banks or building society accounts grow meant something to them. The hon. Member for Hastings and Rye (Mr. Foster) mentioned reading the pink pages, but I cannot see many youngsters running out to buy the Financial Times. If they can see the amount in a building society book, it makes a difference.

The proposed structure of the funds will mean that many poorer families will not be able to contribute. I ask the Government to look again at that aspect of the trust funds, because broadening the base of the investment would be a good way to bring more poorer families into the scheme. As the trust funds are structured in the Bill, it would be the middle classes who will benefit most. That is not necessarily a bad thing—especially for the middle classes—but it is wrong to claim that the proposals will tackle poverty.

When I spoke to representatives of the National Union of Students last week, I was given a postcard that is part of its latest campaign against tuition fees. It is addressed to the Minister's ultimate boss, the Prime Minister, and it states:

"Students already facing decades of loan repayments in this post-grant era will, according to you, graduate with a total of up to £21,000 of debt."

I did a quick, back-of-the-envelope calculation; to end up with a trust fund containing that sum at age 18, a family would have to put the best part of £100 into the fund every month for each child. The trust fund would be swallowed up by tuition fees and student debt for those who go on to university. I can see how the fund would be very attractive for parents and grandparents who wish to ensure that youngsters from relatively prosperous backgrounds have the money to go into higher education, but again it will not do much for those from less well-off backgrounds.

I fully accept that it is impossible to guess what a person will need at 18 when they are born. It would therefore be difficult, if not impossible, to design a fund that set out exactly how it was to be used. However, I was interested to note that the Select Committee Report said:

"People feel strongly that proceeds of the fund should be spent on a worthwhile purpose. Education is by far the most mentioned use for the fund, whether this be higher education or of a more vocational nature."

When asked by the Committee whether the Government had considered an incentive for using the funds for educational purposes, the Minister said that they had not ruled out some sort of benign encouragement. That is an interesting phrase and perhaps the Minister could tell us when she winds up what is meant by it and what is being considered.

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I was very interested in the point made by the hon. Member for Witney (Mr. Cameron) about disabled children. I, too, have a disabled child and fully understand the points that he was making. Unfortunately, a trust fund set up on the basis he suggests would face exactly the same problems as those proposed by the Government—it would disproportionately benefit those who can put more money in, not those in the greatest need, who find it difficult to obtain the extra help that they need.

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