Azara Blog: Child Trust Fund (Baby Bond)

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Date published: 2005/01/11

The BBC says:

The newly-launched Child Trust Fund is a "hollow gesture" when compared to the cost of going to university, says the Liberal Democrat education spokesman.
Phil Willis says the plan to invest up to £500 on behalf of children will be dwarfed by the rising cost in university tuition fees.

Well that argument is true but it is missing the larger point. The Child Trust Fund will give £400 to all children and £800 to "poor" children (about a third of the total), some of the money at birth and some later. This is one of those crackpot New Labour ideas that nobody will speak out against because there are no losers, only winners. Well, there are losers (mid-income people with children and any-income people without children) but they are not supposed to notice the few pounds more draining away in tax, in common with other similar scams perpetuated by government in the past (e.g. the privitisation of council houses by Thatcher). The big winners are not the poor children being mentioned in the New Labour propaganda but instead rich children (there are savings tax perks being allowed) and most of all the financial services industry, which will sell financial products for parents being given this money. (Yet another subsidy of parents by non-parents and yet another subsidy of the City of London by the rest of the UK.)

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