The Conservative Party have been setting out their policies for the 2010 general election at their party conference in Manchester. Top of the British political agenda currently is finding ways of reducing the amount of public debt. Amongst the Party’s plans for doing this is to cut the Child Trust Fund by two thirds. This means that all three main political parties now have different opinions as to the future of the scheme.
The Child Trust Fund has been in existence since 2002 when it was brought in to encourage parents to save for their children. Parents of each new born child since 2002 has been given a �250 child trust fund voucher to invest on behalf of their child. They can put this voucher in a variety of saving schemes which their child will receive upon their eighteenth birthday. Family and friends can add to the fund up to the value of �1200 per year, with the government giving parents another �250 voucher on behalf of their child when (s)he turns seven.
The Child Trust Fund is a Labour Party scheme. They believe that it helps encourage parents to save on behalf of their children, and have no intention of stopping the scheme.
Until now the Conservative Party had said they intended to leave the scheme as it is. This has changed though – quite possibly due to the current state of public finances, with the economic downturn and other factors to blame. They say the Child Trust Fund should no longer be available to well-off families and are planning on limiting it to just the poorest third of families.
Shadow Chancellor George Osborne described the scheme as a luxury saying, “Quite frankly, child trust funds have not been as successful as many like myself hoped. We should continue paying them to the poorest families who often have no savings and encourage them to use them more – but handing out new baby bonds to the rest of the country is a luxury we can no longer afford.”
He claims this move will save �300 million per year, and �1.5 billion over the course of the next parliament. As of yet the Tories have not been specific as to how exactly the Child Trust Fund will be dealt with under their leadership. It is likely that it will be based on income, possibly with families earning over �50,000 a year in total no longer being entitled to it. It is also unclear how those who already have a Child Trust Fund account will be affected. Whether or not they will be able to keep their account, and whether those under seven will still receive their second payment has not been specified.
The Liberal Democrats policy on the Child Trust Fund goes further than the Conservatives; with them saying that they would scrap the scheme completely should they win the next election. They say that the money put towards the child trust fund – currently over �400 million a year – could be better spent in other ways. They have long said that the money could be used to help children in more productive ways. Reducing class sizes and improved teacher training is at the top of their agenda when it comes to children.
Overall opinion with regards to the Child Trust Fund varies, with some thinking it is a waste of money and could be better spent in other areas, while others believe it is a good way of giving eighteen year olds a good start to their adult lives. Now the opinions of the three main political parties also differ.
Andrew Marshall �
Child Trust Fund
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