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Thursday, April 07, 2005
Child Trust Funds

There's a TPA article in the Yorkshire Post today about the Child Trust Fund scheme, which went live yesterday. Unfortunately it's not available on the Internet, but I can email it to anyone who's interested in reading more.

In recent months the Government has been at the mercy of events, buffeted from pillar to post by Iraq, the Conservatives and internal feuding. But in one policy area it has displayed impeccable timing and control. From yesterday, to coincide with the start of the official election campaign, families up and down the country with children under the age of two-and-a-half will gain access to their new Child Trust Fund.

Under the 'Baby Bond' scheme, as it has been dubbed in the press, every child born after 1 September 2002 has received a GBP250 lump sum to invest or deposit in a bank account, with those born to parents on low incomes receiving an additional GBP250. Parents, relatives and friends can then put an extra GBP1,200 a year into the fund tax-free, which becomes available to the child on their eighteenth birthday. The Government plans to add another payment on the child's seventh birthday and is considering a third payment when the child enters secondary school.

Through the scheme, the Government is effectively handing out GBP1billion to almost 2 million families the day after calling the general election. Coming in the same week as the conviction of six Labour councillors in Birmingham for postal ballot fraud, 'electoral bribery' does not seem too strong a phrase to describe the timing, particularly as both the Conservatives and the Liberal Democrats have expressed serious misgivings about the scheme. Such blatant political opportunism should not, however, surprise us because it has characterised the Government's whole approach to welfare and the public sector.

Posted by Matthew Elliott | Permanent Link

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