Banking on baby bonds - article published in Southampton Echo - 15 April 2003

Budgets are often about today and tomorrow. Taxes go up or down to deal with today's pressing problem. People will be persuaded to do this or that, it is hoped, by tinkering with fiscal measures.

But there is one measure in last week's budget that stands out. No-one can accuse it of being short-term. Its effect will only be seen in twenty years time. But it is radical and right, and will be remembered long after all the other measures have been forgotten. This is the announcement that there will be, for all children born from 2002, a Child Trust Fund set up which will be primed with £250. If the child is born to parents receiving family tax credit or income support, the sum will be £500. It can be added to, perhaps by Government, perhaps by parents or relatives over the years, but even if it is not, its value after being invested for eighteen years will be significant. And it can only be 'cashed in' at age eighteen.

This means that in future, every child growing up can look forward to a real asset to use when they reach adulthood. That might be used to pursue education, or learn a skill, or to set up a business, or to put a deposit down on a house. Whatever comes of it, it will make a fundamental difference to many young peoples future. Too many people in our society go through their lives owning nothing. They're too busy making ends meet on a daily basis. What have they got to hand on to their children in the way that some parents will not think twice about?

This hands poverty and disadvantage down through generations. The child with no assets often can't get a start, and hasn't got the credit rating to borrow to gain one. That doesn't mean that he or she won't succeed in life; but there is one more hurdle to clear than others. No longer. Now they will have something of their own to call on, to help them on their way, no matter how they start in life. They might, of course, squander it. But at least now they will have the choice, and the opportunity to decide for themselves how to make their way in the world.

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