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Lord McIntosh of Haringey: The noble Baroness said that she might be cynical; I have never known her be cynical. If I were to be cynical, I might suggest that when she was on the board of the Inland Revenue and there were difficulties with introducing self-assessment in 1990, the then Chancellor of the Exchequer probably assured Parliament that everything was all right. I bet he did; I bet he was required to do so.

Of course it is important that the Revenue be ready and that everyone can assure themselves that that is the case. The Revenue has undertaken a full review of the risks to the CTF delivery schedule between now and April 2005 and has taken steps to reduce the likelihood

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of difficulties occurring. The progress made in preparing for the launch of the child trust fund is tracked at a series of fortnightly and monthly meetings, and I am happy to say that the Revenue is fully on schedule with all activities to date. The Government are confident that the child trust fund can be delivered on time.

The amendments refer in particular to the proposed phasing in of vouchers to children born before 2005, and certainly there is here a peak which will have to be dealt with. The Opposition is concerned that this could be a burden on providers. In fact, the contrary is the case. As with other aspects of the child trust fund, this has been discussed in informal consultation with the providers as a way of managing a potentially high peak of work in April 2005. Providers have supported the measure, seeing it as an opportunity to spread their workload over months rather than days.

The noble Lord, Lord Naseby, raised the issue of the FSA publication on the sales regime. As I think I said at Second Reading, the FSA is planning to publish its consultation paper on the sales regime towards the end of April; that is, in just over a month. Thus the outline of what is being proposed, subject to consultation, will be known at that time. Following that will be a three-month consultation period to give people an opportunity to make their comments. Time must also be allowed for an analysis of those responses. That is the reason why the final document will not be published until October 2004.

At that point, firms in the industry will be able to begin applying to the Revenue to be approved and registered as child trust fund providers. It is not a final deadline for them. A number of months will still be available to them after October 2004. I hope that that is reassuring.

Lord Naseby: I understand entirely what the Minister has said. The draft regulations from the FSA will be available at the end of April and a three-month consultation will take place during May, June and July. Given that the FSA, the Treasury and the Inland Revenue have been working extensively on this, it is difficult to understand why it will take them another three months to come to firm conclusions, particularly when the application date is set at the beginning of October. I fail to understand why the Government cannot ensure that the two are synchronised, which would certainly make it easier for the providers.

Lord McIntosh of Haringey: The idea is that they will be very closely synchronised. I agree that the opening date will be 1 October 2004 and that the final rules will be published in that month.

Lord Naseby: The end of October?

Lord McIntosh of Haringey: In the month of October—I did not understand it to be at the end of that month. I shall convey the views of the noble Lord, Lord Naseby, to the appropriate quarters.

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Lord Naseby: I am most grateful to the Minister for doing that, but the letter states specifically that the final rules will be published by the end of October. I do not know whether that might mean the middle of the month. But, either way, I hope that the Minister will be able to put pressure on all parties to ensure that all this happens by 1 October.

Lord McIntosh of Haringey: This sounds like someone is being cautious. I shall convey the noble Lord's views and write to him.

Baroness Wilcox: The Minister is aware that we support this Bill and these amendments were designed to do just that; that is, to try to bring this proposal to fruition safely, in good time and without embarrassment. In rejecting our suggestions, I hope that the Government do not find themselves embarrassed at a later date. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 44 not moved.]

Lord Newby moved Amendment No. 45:

    After Clause 7, insert the following new clause—

(1) Where the eligible child has been on the child protection register within the two year period up to the date of attaining the age of majority, the Inland Revenue shall request payment advice from the relevant local authority.
(2) The relevant local authority shall undertake a comprehensive assessment of the risk of significant harm the payment presents to the eligible child.
(3) Based on the assessment in subsection (2) the relevant local authority shall provide payment advice to the Inland Revenue.
(4) If the payment advice is that the payment presents a risk of significant harm, the local authority shall—
(a) undertake to provide a package of social care to the eligible child, in order for payment to be made without it presenting a risk, or
(b) hold the fund on trust for the eligible child until age 24 or, if sooner, until the payment presents no further risk.
(5) Proof of identity shall be sufficient proof for receipt of payment.
(6) Regulations may stipulate what would constitute sufficient proof of identity and what form notification of entitlement by the Inland Revenue shall take.
(7) Where the eligible child lacks the appropriate capacity to deal with their financial affairs at the age of majority, the provisions of the mental incapacity legislation in force at that time will apply."

The noble Lord said: During our first sitting in Committee we spent a certain amount of time discussing the extent to which it might be possible to prevent young people spending their child trust fund in a wasteful manner. This amendment seeks to deal with rather more difficult circumstances; namely, where, for one reason or another, vulnerable young people find that the child trust fund money is used in ways that are positively harmful.

I have tabled the amendment following discussions with representatives of the NSPCC, which is very concerned about this matter. Perhaps I may detail two sets of circumstances that exemplify the situations which are of concern to the NSPCC and myself.

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The first circumstance concerns a vulnerable young adult aged 18 in local authority care with drug problems. On turning 18, he is about to leave the safety net of the care home, at which point the young person is also suddenly given the windfall of a child trust fund. One can easily imagine, in those circumstances, that it would be accepted with gratitude since it would provide a means of feeding the drug habit. Another possible scenario is that of children involved in prostitution. They would be forced to hand over their child trust fund money to a pimp.

I realise that while it is relatively easy to cite such difficult examples, it is much more difficult to provide the solutions. I do not claim that this amendment is perfect, but perhaps I may explain briefly what it seeks to do.

Basically, for all children who have been registered on the child protection register for a period of two years up to their reaching the age of 18, the relevant local authority would be required to,

    "undertake a comprehensive assessment of the risk of significant harm which the payment of the child trust fund presents to the eligible child".

On the basis of that assessment, the local authority would provide advice to the Inland Revenue. If the advice suggests that payment would present a risk, the local authority should undertake to provide a package of social care while the fund itself is held in trust until either the child is deemed by the local authority no longer to be at risk or when the child reaches the age of 24.

I accept that this amendment may not be perfect, but I think that there is a serious issue to be addressed. The NSPCC has made the point that if child trust funds were seen to be spent in ways that are positively harmful to young people, that would severely damage the concept of the trust fund itself. I certainly agree with that view.

While I would be delighted if it were possible for the whole amendment to be adopted by the Government, the broader question of local authorities providing risk assessments and support for a child specifically in relation to that child receiving child trust fund money is an extremely important and serious one. I should be most grateful for any assurance that the Minister is able to give me on this. I beg to move.

Lord McIntosh of Haringey: I make nothing of the drafting because it is important that we discuss the issues raised by the amendment. Since we are in Grand Committee, we can deal with issues of drafting at a later stage if that is necessary.

However, I have both principled and practical problems with the thrust of the amendment. The problem of principle is well known. When a child reaches the age of 18, he or she becomes an adult. To take away the property of the 18 year-old would raise serious issues with the Human Rights Act. All the money in a child trust fund belongs to the child from the day that it is put into the account. What is being suggested here is that we should take away the property of a person who is, by the age of 18 years, an adult in the eyes of the law.

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We have been through the arguments about the age of majority for different purposes, such as serving in the Army, getting married, voting and so forth, but the age of 18 for these purposes—and for most other purposes—is the age at which a child becomes an adult. There is no basis for intervention by the Inland Revenue or any other body. Indeed, the role of the Inland Revenue and local authorities in the Bill is limited very much to ensuring that all eligible children get a child trust fund account. It does not envisage administering the account in any way.

The amendment talks about the circumstances where a child has been on the child protection register within the two-year period up to the date of attaining the age of majority. It is a well thought-out way of getting a local authority to investigate whether there is a risk of significant harm to the child. I have two points to make. First, many vulnerable 18 year-olds will never have been on the child protection register. Secondly, many people who have been on the child protection register, even in the previous two years, will be no longer at risk. In many cases, there will be a very poor match between being on the child protection register and being vulnerable in the way that the amendment anticipates.

Local authorities should not automatically withdraw help from young adults who have reached 18, although that is the age at which all children are de-registered from the child protection register. We must rely on local authorities and oblige them to take continuing responsibility. That, I suggest, is the best way of dealing with young adults at risk, within the law as it stands and the provisions of the Human Rights Act.

4.45 p.m.

Lord Newby: I am grateful to the Minister for that reply. As I said, the key issue is local authorities taking ongoing responsibility for particularly vulnerable and at-risk young people.

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