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Mr. Laws: I wonder whether the Financial Secretary is taking this opportunity to trim back on her earlier commitment. Will she acknowledge that anyone born between 6 April 2003 and 5 April 2004 will essentially get the same compensation as though they had been born on the latter date? People born at the beginning of the period, who should get a 14 per cent. uprating, will get only 7 per cent. Why are the Government short-changing people in that way?
Ruth Kelly: I am sure that the hon. Gentleman will accept that we are not short-changing people. For the initial payment, we calculate growth at the middle of each band, so there will be some winners and, undoubtedly, some losers. However, for administrative simplicity, we have averaged over the bands. For the supplement, we took April at the end of each band, which is when the supplement would be given to the family in the usual course of events. Given that the child tax credit has to be claimed, the hon. Gentleman will understand that the second payment is normally made after the first payment. In no sense have we short-changed families. In fact, we have been both generous and fair—while, of course, ensuring value for money for the Government. The figures were calculated using a 7 per cent. nominal rate of return in accordance with FSA guidelines, as the hon. Gentleman suggests. Given that we have fulfilled his requirements, I ask him to reconsider his new clauses.
Mr. Laws: I thank the Financial Secretary for giving way one more time. I remain dissatisfied about the way in which the Government will compensate people, but what does she expect to be the total cost of delivering all the amounts that it is now anticipated will be delivered in one go, in the 2004–05 fiscal year?
Ruth Kelly: I do not have figures to hand on the total cost of the changes. I think that I gave them to the hon. Gentleman in Committee, but if I did not, I apologise. I will certainly write to him with those figures, but I can assure him that the amounts are fair, and no one is being short-changed. Given the hon. Gentleman's consideration of those factors, I hope that he will not press any of the new clauses to a Division.
Mr. Osborne: I pretty much welcome what the Minister said about new clause 3, although the hon. Member for Yeovil (Mr. Laws) made it pretty clear what he thinks of what she said about his new clauses. My brief experience of politics shows me that when there are winners and losers, the winners do not thank people, but the losers complain. We shall see what happens with people born between 1 September 2002 and the date of the implementation of child trust funds.
I turn to new clause 3, which I moved. I am sorry if I misrepresented what the Financial Secretary said on Second Reading, but that was an understandably easy mistake given that my thoughts were shared by the hon. Member for Hastings and Rye (Mr. Foster) and by Children's Mutual. I am sure that what she said was
clear. She was right to point out that there are other savings vehicles—she regularly points that out—but as my hon. Friend the Member for Witney (Mr. Cameron) said at the start of our consideration on Report, that argument could be deployed against the entire Bill. She said that during her informal consultation, the providers said that an identical product would help them—I think that those were her words. She has given a commitment to monitor the situation so that if she finds a gap because of unmet demand that requires regulatory change, she will consider doing taking action.3.30 pm
Although I shall not press new clause 3 to a Division, I send a message from the Dispatch Box to financial providers. If they become aware of unmet demands, believe that it would significantly help their marketing if they were able offer child trust funds to older children, and think that would encourage savings and help the child trust fund scheme to work from its launch, I urge them to make representations not only to me, but to the Financial Secretary, so that she will get on with making any regulatory changes that might be necessary. With that, I beg to ask leave to withdraw the motion.
Motion and clause, by leave, withdrawn.
New Clause 4
Reduction of Age of Majority in Respect of Child Trust Funds
'(1) For the purpose of any contact entered into in respect of a child trust fund, the age of majority shall be 16.
(2) The Family Law Reform Act 1969 (c. 46) is amended as follows.
(3) After section 1 insert—
"1A Reduction of age of majority in respect of child trust funds
(1) For the purposes of any matter specified in subsection (2) which relates to a contract entered into in respect of a child trust fund, a person shall attain full age on attaining the age of sixteen
(2) Those matters are—
(a) any rule of law, and
(b) the construction (in the absence of a definition or of any indication of a contrary intention) of the expressions listed in section 1(2) and similar expressions in—
(i) any statutory provision, whether passed or made before, on or after the date on which this section comes into force; and
(ii) any deed, will or other instrument of whatever nature (not being a statutory provision) made on or after that date.
(3) Subsections (6) and (7) of section 1 shall apply to the provisions of this section as they apply to the provisions of that section.
(4) In this section 'child trust fund' has the meaning given by section 1(2) of the Child Trust Funds Act 2004."
(4) In section 28(4) (extent), after paragraph (a) insert—
(aa) section 1A extends to Northern Ireland;".'.—[Mr. George Osborne.]
Brought up, and read the First time.
Mr. George Osborne: I beg to move, That the clause be read a Second time.
Mr. Deputy Speaker (Sir Alan Haselhurst): With this it will be convenient to discuss the following: New clause 5—Designation of responsible person by young parents—
'(1) This section applies to a person who has parental responsibility in relation to a child who is under the age of 18 or, in Scotland, 16 (person A).
(2) Person A may designate another person (person B) who is over the age of 17 or, in Scotland, 15 as the responsible person in relation to the child for whom person A has parental responsibility.
(3) Person B must inform the Inland Revenue that he has been designated as the responsible person in respect of the child.
(4) Regulations may prescribe—
(a) the required method of designation under subsection (2),
(b) any requirements relating to person B informing the Inland Revenue under subsection (3), and
(c) the circumstances in which person B shall cease to act as responsible person on or after the day on which person A reaches the age of 18 or, in Scotland, 16.'.
New clause 11—Early withdrawal by young person in full-time employment—
'(1) If this section applies to a child, that child may withdraw funds from his account in accordance with the provisions of subsections (4) and (5).
(2) This section applies to a child if—
(a) a child trust fund is held by the child,
(b) the child is over the age of 15, and
(c) the child is in full-time employment.
(3) Regulations may prescribe—
(a) the meaning of "full-time employment" for the purposes of this section, and
(b) the manner in which proof of full-time employment is to be provided for the account provider.
(4) A child to whom this section applies may apply to withdraw amounts from the fund, including the whole amount of the fund.
(5) On receipt of the proof of full-time employment prescribed by regulations under subsection (3)(b) and an application, the account provider must—
(a) release the amounts requested to be withdrawn, and
(b) inform the Inland Revenue in accordance with regulations.'.
Amendment No. 76, in page 2, line 44 [Clause 3], leave out 'as' and insert
'in accordance with the provisions of section [early withdrawal by young person in full-time employment] or as otherwise'.
Government amendments Nos. 33 and 34.
Amendment No. 5, in page 3, line 3 [Clause 3], after second 'person', insert
'so designated in accordance with the provisions of section [designation of responsible person by young parents] or a person'.
Amendment No. 6, in page 3, line 8 [Clause 3], leave out '18, or in Scotland,'.
Amendment No. 7, in page 3, line 9 [Clause 3], leave out ', in Scotland,'.
Amendment No. 9, in page 3, line 33 [Clause 5], leave out from 'or' to 'to' in line 34 and insert 'where subsection (2A) applies'.
Amendment No. 10, in page 3, line 34 [Clause 5], at end insert—
'(2A) This subsection applies in the case of a child—
(a) who is such an eligible child because of section 2(3), or
Government amendments Nos. 40 and 42.
Amendment No. 77, in page 10, line 39 [Clause 20], after '3(4)(d)', insert
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