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Bob Spink: My hon. Friend makes a good point. Is he aware that only one Labour Back Bencher is in his seat?
Mr. Goodman: I have not cast my eyes that widely. Rather than explore this avenue further, however, I urge all those who read the debateI say this as the Financial Secretary's Parliamentary Private Secretary, the hon. Member for Stalybridge and Hyde (James Purnell), scurries back to his seatto take note of my hon. Friends' contributions.
Many hon. Members followed the lead of my hon. Friend the Member for Tatton in suggesting that child trust funds should be open to all. The hon. Members for Dumbarton (Mr. McFall) and for Hastings and Rye (Mr. Foster) did so, as did my hon. Friend the Member for Witney. He made an extraordinarily creative contribution, in which he gave four small suggestions and one large one. In fact, he made so many small suggestions that I am not sure that I can remember them all. His large suggestion, which he also raised in an Adjournment debate a while ago, is something that we will want to consider in Committee, and I urge the Minister to do the same. Indeed, I hope that she refers to it when she winds up. In that Adjournment debate, my hon. Friend showed an accomplished understanding of the needs of parents who have to buy equipment and make difficult decisions when they are not always sure how to negotiate their way through the maze that confronts them. However, support for an aim and support for a Bill are not one and the same thing, which brings me to my main points.
I am sure that the Chancellor and Financial Secretary want us all to view the Bill as a Christmas present to a suitably grateful nation. The right hon. Gentleman, with the recent assistance of the Financial Secretary, has been preparing, packaging and gift-wrapping child trust funds for more than three years. First, there were the press reports; then there was a consultation document, followed by a second consultation document proclaiming the success of the first; then there was an announcement from the Chancellor proclaiming the success of the second consultation document; and finally, we have the Bill. It has taken three years for the Chancellor to get ready to give us the detail.
How many answers do we find when the gift-wrapping, the glitter and the tinsel are torn aside? The blunt truth is, not enough. Without clear answers, we cannot be sure whether the Bill is a Christmas present for anyone. It has four main flaws as it stands. My hon. Friend the Member for Castle Point (Bob Spink) was right to say that the devil is in the detail. The first flaw is that the Government have offered no convincing evidence that it will help the less well off to develop a savings habit, a concern that was widely raised. After all, the Bill does not tell us whether payments into child trust fund accounts will reduce a child's benefit entitlement when he or she becomes an adult. Imagine the reaction of a single mum on a low income, as mentioned by the hon. Member for Dumbarton, who finds that by topping up the fund she could reduce her child's eventual benefit entitlement or that if her child is
The second flaw is that the Government have no convincing evidence that the Bill will help anyone to develop a savings habit except those who will probably save anyway. Labour Members need to understand that we have no problem with the middle classes saving. Indeed, we have no problem whatsoever with any income group saving. The problem is not ours but Labour's. The express purpose of the Bill is to help poorer people to pick up a savings habit. As we heard, a single mum on a low income who is worried that her child may one day need benefits or that she will not be able to tap into the fund on her child's behalf if in real need may not add a penny to the Chancellor's original £500. A middle-class dad on a higher income, however, who is unlikely to be in similar needI pause in case any of my hon. Friends wish to suggest an examplemay add the maximum amount of £1,200 each year, leaving that child with a nest egg worth £34,000 when the child reaches 18. As the Government have published no research, set no targets and drawn up no estimates, we have no reason to think that the Bill will help people to save unless they are likely to save in the first place.
The third flaw is that if the Bill is to help those on lower incomes, it must offer some certainty to the financial institutions that the Chancellor hopes will market child trust funds. We have no reason to think that it will make that happen because of the ambiguity and uncertainty that surrounds the charge cap, details of which are not in the Bill despite the White Paper saying two months ago:
Norman Lamb: I am slightly confused about the Conservative party's position. Does the hon. Gentleman support or oppose the measure? He presents a good case against it. Will the Conservatives join the Liberal Democrats in opposing it?
Mr. Goodman: If the hon. Gentleman had been in the Chamber for the opening speech of my hon. Friend the Member for Tatton, he would have heard him make it clear, as I have, that we support the Bill in principle, but that we wish to examine the detail. I understand that the Select Committee report that the hon. Gentleman signed, although critical in detail, supports the Bill in principle. How will he vote?
If the charge cap is to be 1 per cent. and the institutions are permitted to make only £2.50 from each £250 fund, they will surely market their products not to those who do not save, but to those who do. Child trust funds will go the same way as stakeholder pensions.
The fourth flaw is that the Government have offered no convincing evidence that the Bill will deliver trust funds on time. The financial institutions have just 12
Mr. Love: I want to press the hon. Gentleman on the charge cap. A brief provided by the Nationwide building society, one of the major providers of such accounts, states:
Mr. Goodman: I do not think so. If the hon. Gentleman had been in the Chamber for the opening speeches, he would have heard my hon. Friend the Member for Tatton refer to the large number of teas that he has recently had in the Pugin Room with people from financial institutions who are dubious about the charge cap. I am not sure that the hon. Gentleman's example is representative.
Mr. Love: Will the hon. Gentleman give way?
Mr. Goodman: No. I have let the hon. Gentleman intervene once and I want to make some progress.
The financial institutions, parents and, ultimately, children will all depend on the Inland Revenue to get the child trust funds off the ground on time. The Revenue is still groaning beneath the burden heaped on it by the Chancellor of running not just the tax system but, increasingly, the social security system through tax credits. The Revenue is expected simultaneously to deliver child trust funds and, according to the Paymaster General,
That brings us to one of the few things about the Bill that we do know. We do not know whether it will help the less well off to save, or offer certainty to financial institutions, or be ready on time. However, we do know that even if the funds are not delivered on time, the timetable must be delivered on time. The timetable dictates that 1.8 million vouchers must go through the letterboxes of the houses of a suitably grateful nation in the autumn of 2005.
What could be happening around about then, I wonder? I do not believe that this is a timetable for parents who are planning to save. Instead, it is a timetable for a Government who are gearing up for an election. There are two years until the autumn of 2005, yet the Chancellor of the Exchequer has had three years to get ready to give us details and answers about child trust funds in the Bill that is before us. The Bill was preceded by lots of third-way glitter and glitz, but