Child Trust Funds (Amendment) Regulations 2010

My Lords, I thank the Minister for introducing the order. He will be aware that our policy is to cease child trust funds except for those who are eligible for additional payments. On that basis, we will not object to the order. That said, I am not convinced that this extra £100 or £200 a year for disabled children is necessarily the right way to spend taxpayers' money on such children. It is highly likely that there are greater priorities for them than a bit more money in their child trust fund account which matures when they reach 18. We are a party committed to saving, and so we support the least-advantaged in our society being able to start adult life with a small amount of capital behind them if that improves their ability to manage their long-term finances. However, the Minister will be aware that, when introduced, this was an evidence-free policy. A few moments ago, he said that the policy promotes positive attitudes to saving, but that is far from proven. We shall find out whether the existence of a modest capital sum will result in an adult saving habit some way into the future. We will not know for at least another dozen or so years whether the money is used wisely or, as many of us feared when the Bill was considered in your Lordships’ House, to fund a large party or other forms of frivolous consumer expenditure. The lack of evidence taints the policy not only for the better-off but also for those who are in receipt of additional payments—that is, largely those whose parents are on benefits, and disabled children of course. However, lack of evidence has never stopped this Government from legislating or spending taxpayers’ money. One of the alleged benefits of the policy was that it would encourage additional savings for children by parents and others associated with the children. The latest HMRC statistics show that only 24 per cent of all accounts have attracted any additional savings, and only 1 per cent had the maximum of £1,200 added last year. The average was less than £300 for those who did save extra, but that is only £70 per child overall. I do not believe that there is any proper evidence—as opposed to the opinion of certain child trust fund providers who have an interest in the continuance of the product—on whether the extra contributions are additional to other savings or whether they merely substitute for savings which would otherwise have been made in another form. We are clear that an evidence-free policy which has an annual price ticket of some £500 million is not the best use of scarce resources. But, as I said earlier, we are content for this order to proceed.