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Lord Bassam of Brighton: My Lords, the principal reason is that the purpose of a photo driving licence is to permit a person to drive a vehicle, having passed a test. No doubt it is a useful means of identification and is often used in that way.

Child Trust Fund

2.56 p.m.

The Viscount of Oxfuird asked Her Majesty's Government:

Lord McIntosh of Haringey: My Lords, the Government announced on 26th April that they would consult on two new proposals to increase saving and asset ownership: the child trust fund and the saving gateway. The exact timing and cost of these policy proposals will depend on the results of the consultation process.

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The Viscount of Oxfuird: My Lords, can the Minister tell the House whether income that accrues under either proposal will be subject to taxation? If not, how can it be fair to tax the savings of non-taxpayers, including pensioners and children who may have been bought privatisation shares by their parents, through the non-refundable stealth tax on dividend income introduced by the Chancellor?

Lord McIntosh of Haringey: My Lords, I thought that it would not be long before the Benches opposite moved from a debate on something which involved the transfer of money from government to people to their obsession with the transfer of money from people to government. The question of the tax status of the child trust fund and the saving gateway is one of the matters for consultation. Clearly, if there were to be tax relief for income under either or both of these measures the question would arise whether it became a regressive or progressive proposal in taxation terms. That is one of the matters which is being seriously considered.

Lord Naseby: My Lords, is the Minister aware that the expression "baby bond" is the registered trade mark of the Tunbridge Wells Equitable Friendly Society, of which I have the honour to be chairman? That is declared in the register. Is the noble Lord also aware that the primary work on this matter was done by the think tank IPPR, of which we were proud to be a co-sponsor? Is the Minister further aware that the friendly society movement, which has some 6 million members, looks forward to working with the Government to introduce the child trust fund and hopes that that movement will have a major role to play?

Lord McIntosh of Haringey: My Lords, I am particularly grateful for the last part of the noble Lord's question. I learnt only 10 minutes ago that he and his society had the prescience to register the expression "baby bond". My immediate conclusion was that they would begin to charge the Government for the use of that name. I am delighted to learn--I hope--that that is not the intention. But the main conclusion that I draw from the noble Lord's question is that we have some very valuable allies.

Lord Goodhart: My Lords, does the Minister agree that it would be better to divert this money into the cutting of tuition fees?

Lord McIntosh of Haringey: My Lords, the assumption of the noble Lord is very flattering to the Government. It is our intention that 50 per cent of young people in this country should benefit from higher education, but even when we achieve that target tuition fees would apply to no more than half of that 50 per cent. The proposals announced in April of this year apply to the whole population.

Lord Campbell of Alloway: My Lords, all this business about transfer of moneys this way and that does not make much sense. Is this not just a plain electoral gimmick?

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Lord McIntosh of Haringey: My Lords, if governments could not make proposals for improvements in the welfare and happiness of the people of this country, that might be a serious question. There are still plenty of opportunities for us to continue making improvements of the kind that we have suggested.

Lord Saatchi: My Lords, is it not true to say that this baby bond is a fitting epitaph for a government who have always liked the idea of treating voters as babies? Perhaps the Minister will follow me in some baby arithmetic. There are 717,000 births roughly a year in this country. At 500 per head, this baby bond will cost the Government the sum of 350 million per year. Does the Minister accept that the Government have increased tax on voters by 28 billion per year? Therefore, the sum that the Government are so generously giving back amounts to just 1¼ per cent of the extra amount they have already taken in taxes. Does not the Minister think that even babies could see that coming?

Lord McIntosh of Haringey: My Lords, I am grateful for the preview of what will undoubtedly appear either on posters or on party election broadcasts for the Conservative Party. I am sure that the Chancellor of the Exchequer will be glad to have forewarning of the cutting edge of Conservative Party philosophy. In particular, the remarks about babies will go down very well.

The Conservative Front Bench and its Back-Benchers are showing the same predilection as was shown by the noble Viscount, Lord Oxfuird: that the only way to respond to a proposal to transfer money from government to the people is to change the subject. I notice that neither the Front Bench nor the Back Benches have recorded the fact that Mr Portillo said that he would not proceed with this project.

Earl Ferrers: My Lords, can the noble Lord explain why the Government feel that people cannot have babies without the Government paying them to do so?

Lord McIntosh of Haringey: My Lords, the Government do not feel that. They are not King Canutes. The urges which cause people to have babies will continue under any government.

Lord Blackwell: My Lords, can the Minister explain why the Government's support for the baby bond has not been matched by their support for the Opposition's proposal to fund pensions for young people? If the Government are to transfer money to individuals to try to encourage savings and self-sufficiency, would it not be more sensible to crystallise an existing liability on the state (for paying pensions) and to fund those rather than to create an additional liability on the state 18 years earlier?

Lord McIntosh of Haringey: My Lords, I find that a remarkable question. The Government have successfully introduced stakeholder pensions and are

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introducing second state pensions which are valuable for young people as well as those of other ages. The Government's record in supporting pensions for people not at present receiving them is outstanding.

The Viscount of Oxfuird: My Lords, will the Government agree that it would be more sensible if, instead of taking money away from non-taxpayers and then giving some of it back, they abolished tax on small savings altogether, as recommended by the party on this side of the House?

Lord McIntosh of Haringey: My Lords, that is about the third or fourth attempt to divert attention from the original Question to something quite different. We are aware that if the only benefit of what one noble Lord called "baby bonds" was tax relief, that would be regressive in personal taxation terms. That is why other things would have to be done, particularly in terms of the relationship with tax credits and with other forms of benefits, to ensure that the finalised proposals are not regressive but benefit the less well-off. The analysis of these matters is clear in the paper issued in April. I commend it to the noble Viscount.

Asylum Policy

3.5 p.m.

Earl Russell asked Her Majesty's Government:

    Whether the Prime Minister's article in The Times of 4th May represents government policy; and, if so, what changes they wish to make in the United Nations Convention on Refugees of 1951; and by what authority they believe these changes can be brought about.

Lord Bassam of Brighton: My Lords, the Prime Minister's article made it clear that the United Kingdom is taking a lead in arguing for reform, not of the terms of values or principles of the 1951 convention, but of how it operates.

Earl Russell: My Lords, may I draw the Minister's attention to a reply given by his noble friend Lady Scotland of Asthal? She said that:

    "Article 63(1) of the treaty establishing the European Community requires the Council to adopt within five years of the entry into force of the Treaty of Amsterdam measures on asylum which are in accordance with the Geneva Convention".--[Official Report, 18/04/00; col. 560.]

So it is enshrined in the European Treaty that asylum policy should be in accord with the 1951 convention. Does the Minister agree that revisions of the European treaties require unanimity and that, therefore, the likelihood that the Prime Minister will, even if it were desirable, achieve any significant alterations in the 1951 convention is negligible?

Lord Bassam of Brighton: My Lords, I cannot agree with that. The noble Lord is drawing attention to an important article which relates in part to the

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celebration of the 50th anniversary of the signing of the 1951 convention. As part of that article, the United Nations High Commissioner for Refugees has instigated a programme of global consultations which draws together refugee producing countries, countries of first asylum, refugee receiving countries, academics and legal experts to discuss topics of interest to those concerned with the protection of refugees. It is in that context that my right honourable friend the Prime Minister wrote his article and also that my right honourable friend the Home Secretary has made a number of important contributions to the debate about how in the future we can deal with some of the many challenges that confront the world with regard to refugees or those seeking refugee status.

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