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Baroness Noakes: My Lords, I cannot express to the Minister how disappointed I am that he has chosen to turn his face against the amendments. He described them as barnacles on shellfish, which I find particularly wounding.

The amendments were put forward as a serious attempt to improve the model, not simply as "harmful accretions", which was another of the terms used by the Minister to describe my amendments. We are concerned to ensure that the scheme, if it goes ahead, accommodates the different savings patterns that will

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exist. Whatever the savings industry wants, it will not be the case that every family can contribute a regular amount every month or year. Life simply is not like that. We were also trying to encourage the Government to commit to something that would represent stability in a savings product and avert possible cynicism. Many people have seen what the Government have done with ISAs; namely, the progressive reduction of the maximum annual contribution and the prospect of that amount falling to 1,000 next year. They have seen what the Government have done to savings products. Why should they believe that the Government would do anything different in future? The Bill gives them no reason to do so. However, the Government have unkindly rejected my amendments. I must accept their judgment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 17 not moved.]

Clause 13 [Relief from income tax and capital gains tax]:

[Amendments Nos. 18 and 19 not moved.]

Clause 14 [Insurance companies and friendly societies]:

[Amendment No. 20 not moved.]

Clause 20 [Penalties]:

Lord McIntosh of Haringey moved Amendment No. 21:


    Page 12, line 25, leave out from beginning to "5(5)" in line 29 and insert—


"(a) the provision by the account provider, as a child trust fund, of an account which does not meet the condition in subsection (7A),
(b) a failure by the account provider to comply with section 8(2) or 9(3) or with a requirement imposed on the account provider by regulations under section"

The noble Lord said: My Lords, in moving Amendment No. 21, I shall speak also to Amendments Nos. 22 and 23. These amendments to Clause 20, which imposes penalties, are essentially tidying-up amendments to ensure that the references to other clauses of the Bill are to clauses under which offences can be committed and so penalised. None of the changes affects the penalty regime in any way. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendments Nos. 22 and 23:


    Page 12, line 31, at end insert—


"(7A) An account meets the condition referred to in subsection (7)(a) if—
(a) it is of one of the descriptions prescribed by regulations under section 3(2),
(b) section 3(4) is complied with in relation to it, and
(c) the requirements imposed by regulations under section 3(5) are satisfied in relation to it." Page 12, line 35, leave out from "each" to end of line 37 and insert "account affected by the matter, or any of the matters, in respect of which the penalty is imposed,"

On Question, amendments agreed to.

26 Apr 2004 : Column 654

Clause 27 [Commencement]:

Baroness Noakes moved Amendment No. 24:


    Page 16, line 8, at end insert—


"( ) No order may be made under subsection (1) before the dissolution of the present Parliament."

The noble Baroness said: My Lords, I rise to move the last of the amendments on Report. I can hear the sighs of relief starting to echo around the Chamber. While the last, but certainly not the least, of our amendments, the amendment would delay the commencement of the Bill until after the next general election.

My proposition is a simple one. The child trust fund policy owes as much to the electoral cycle as it does to high-minded notions of "asset-based welfare"—which was trotted out in another place. I am glad that the Minister has spared your Lordships that. The policy was announced before the previous general election, and it has been implemented with the next general election fully in mind. In Grand Committee I went through the logic, which would have been clear back in 2001 after the previous general election, that the most likely time for the next general election—I said "most likely"; it is not an absolute necessity—would be in spring or early summer 2005. To reach that conclusion one has only to put together the Prime Minister's general desire to get beyond four years, not wanting to be boxed in at the end, and the EU presidency.

So when is the child trust fund being implemented? In spring 2005. That is when parents of about 1.8 million children will receive a voucher worth about 250 from the Inland Revenue, which is the department that the Chancellor runs. Unlike most letters from the Inland Revenue, which no one wants to read and usually ask for money, these letters will be very nice because they will contain a voucher that looks a bit like a cheque. So imagine the warm feelings of the 3 million or so parents—otherwise known as voters—when that happens. Taxpayers' money amounting to about 450 million will finance that. As we discussed in Grand Committee, the notion that the Chancellor will use his Budgets to secure voter approval is not very surprising. We all expect that next year's Budget will be very long on those matters. What is surprising is the calculated use of the child trust funds.

Back in 1769, the legal scholar William Blackstone opposed universal suffrage because he thought that the poor would sell their votes to the rich, who would then use their new power to exploit the middle classes. If we let the Bill be used to encourage anyone who thinks that 250 is a lot of money to vote for the Chancellor's party, we will indeed be handing him power to exploit the middle classes. It is the middle classes who have already borne the brunt of the Chancellor's additional taxes—more than 5,000 per household since 1997—and they will be the ones who have to bear the tax rises of the Chancellor's third term if he gets the opportunity. That is why we think it would be right for the Government to wait until after

26 Apr 2004 : Column 655

the general election. That would not be much of a delay for a policy that has an 18-year span. I beg to move.

Lord McIntosh of Haringey: My Lords, I think that this is unwise. There is a certain inevitability in the way in which policy, particularly new policy proposals, achieve fruition. You have an idea. You put it in a manifesto. You win a general election. You work out what the idea means in practice, you consult on it. If people are not happy you consult again. You produce legislation and you bring it before Parliament. You subject it to the severe scrutiny of your Lordships' House. When that has happened you allow enough time for it to go through. That may take three, four or five years—I do not know. I do not know when the next general election is going to be.

I would be astonished if we won the previous general election to any significant effect because we put child trust funds in our manifesto. I would be astonished if we were to win or lose the next election to any significant effect because we had pursued that policy through to fruition. On the other hand, if we were given the argument that the Opposition had denied parents this 250 or 500 because of these electoral reasons and we were able to go into the election saying, "You could have had this money but the Conservatives would not let you have it", I would think that that would have very considerably more electoral effect than what we are proposing to do now. I would strongly advise the noble Baroness, Lady Noakes, in her own interests not to pursue this amendment.

Baroness Noakes: My Lords, I thank the Minister for his advice. I completely accept that, in the electoral cycle, ideas work their way through and are then enacted. However, relatively few of them involve the transfer of significant amounts of money to individuals, admittedly in a form which could be put into an account but could not be accessed for some time.

If the general election were held next June, the delay would be relatively small. It is merely a matter of there being no suggestion that the Government could influence the outcome by using a particular type of policy. It is not a question of whether or not the Minister would be astonished. Let it be beyond doubt that if this is the Government's policy, that is fine; it will be implemented if they win the election. However, if they do not win the election and perhaps the Liberal Democrats win it, it will be for the Liberal Democrats to decide whether or not they implement the policy. I think we know from the tenor of the comments of the noble Lord, Lord Newby, what his answer would be. That is why we consider this to be a very important issue.

When we tabled the identical amendment in the Commons, I was encouraged that the Liberal Democrats all voted for it, including their leader, Mr Kennedy, and I think it is appropriate to test the opinion of the House.

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9.1 p.m.

On Question, Whether the said amendment (No. 24) shall be agreed to?

Their Lordships divided: Contents, 17; Not-Contents, 67.

Division No. 7

CONTENTS

Anelay of St Johns, B.
Coe, L.
Cope of Berkeley, L.
Fookes, B.
Lamont of Lerwick, L.
Lyell, L.
MacGregor of Pulham Market, L.
Newton of Braintree, L.
Noakes, B.
Northbrook, L.
Northesk, E.
Palmer, L.
Peel, E.
Renton, L.
Seccombe, B. [Teller]
Shaw of Northstead, L.
Wilcox, B. [Teller]

NOT-CONTENTS

Acton, L.
Addington, L.
Andrews, B.
Ashton of Upholland, B.
Avebury, L.
Barker, B.
Brennan, L.
Brooke of Alverthorpe, L.
Campbell-Savours, L.
Chandos, V.
Clark of Windermere, L.
Clarke of Hampstead, L.
Cohen of Pimlico, B.
Corbett of Castle Vale, L.
Crawley, B.
David, B.
Dean of Thornton-le-Fylde, B.
Desai, L.
Dixon, L.
Dubs, L.
Elder, L.
Evans of Parkside, L.
Farrington of Ribbleton, B.
Gale, B.
Gilbert, L.
Golding, B.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Grocott, L. [Teller]
Harris of Richmond, B.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Chesterton, L.
Hunt of Kings Heath, L.
Jones, L.
Jordan, L.
Lea of Crondall, L.
Livsey of Talgarth, L.
Lockwood, B.
Lofthouse of Pontefract, L.
Macdonald of Tradeston, L.
McIntosh of Haringey, L.
McIntosh of Hudnall, B.
Mackenzie of Framwellgate, L.
McNally, L.
Maddock, B.
Massey of Darwen, B.
Newby, L.
Oakeshott of Seagrove Bay, L.
Pendry, L.
Phillips of Sudbury, L.
Rooker, L.
Roper, L.
Russell, E.
Sawyer, L.
Scotland of Asthal, B.
Sharp of Guildford, B.
Taylor of Blackburn, L.
Tordoff, L.
Triesman, L. [Teller]
Walmsley, B.
Warner, L.
Warwick of Undercliffe, B.
Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.

26 Apr 2004 : Column 656


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