HC Deb 03 February 2004 vol 417 cc695-701

  1. 'The Government shall not advertise or publicise by the distribution of leaflets or other literature the introduction of child trust funds during the pre-election period.
  2. In this section. the "pre-election period" means the period that—
    1. starts with—
      1. the calling of a General Election by the Prime Minister, or
      2. the day that falls twenty-five days before any Parliament shall cease to have continuance in accordance with the provisions of the Septennial Act 1715 (1 Geo 1 Stat 2 c 38), whichever is the earlier, and
    2. ends with the day of the ensuing General Election.'.—[Mr. Laws.]

Brought up, and read the First time.

Mr. Laws

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker

With this it will be convenient to discuss the following: Government amendments Nos. 44, 45 and 51.

Amendment No. 26, in page 15, line 14 [Clause 27], leave out subsection (2).

Amendment No. 27, in page 15, line 17 [Clause 27], at end insert— '(4) No order may be made under subsection (3) before the dissolution of the present Parliament.'.

Amendment No. 81, in page 15, line 17 [Clause 27], at end insert— '(4) No order may be made under subsection (1) before the dissolution of the present Parliament.'.

Government amendment No. 52.

Mr. Laws

The Liberal Democrat new clause 7 deals with the prohibition of publicity and advertising in the pre-election period. It is a particularly sensitive and important issue, because of the timing of the payment by the Government of the initial amounts that will go into the child trust fund accounts. That will happen for those entitled to it by the likely date of the general election, and the Government are also paying out in 2005 all of the amounts to which individuals are entitled backdated to 1 December 2002. That might give rise to a particular temptation on the part of the Government in what might be the run-up to the general election in spring 2005 to devote much publicity and advertising to that particular disbursement of funds in the expectation that the effect may not be wholly unfavourable for the general election.

We debated some aspects of the issue in Committee. I drew the Committee's attention to the Cabinet Office report entitled "Information Activities during a General Election", which specifies some of the existing limitations on Government advertising in the run-up to election periods. Paragraph 10(g) of the paper, under a section entitled "Paid Media", states: New advertising campaigns will in general be postponed and running campaigns closed. However, some advertising (for example recruitment, health and safety) might be specifically approved to continue by the Head of the GICS in consultation with the Central Secretariat, Cabinet Office. An additional later section appears to go further than advertising campaigns alone, stating: In addition, it has always been recognised that special care must be taken during the course of an Election since information material produced with complete impartiality which would be accepted as objective in ordinary times, may excite criticism during an Election period when feelings are running high. We debated some of the issues in Committee and some of the Financial Secretary's responses were to some extent contradictory. Towards the end of her comments, she said: I was a little surprised that the hon. Member for Yeovil felt that new clause 11 was necessary. During any general election campaign the Government retain their responsibility to govern, and essential business must go on. It has long been the practice that, where possible, activities such as advertising are stopped for the duration of the pre-election period. The period starts when the Prime Minister calls a general election and asks the Queen for the dissolution of Parliament, and it ends once the result of the election is known. Under those rules, the operation of the child trust fund would continue during an election campaign, but any advertising surrounding its launch would cease. In other words, she seemed to believe that I merely wanted clarification and assurance that my new clause 11 was already the Government's practice. She meant that there was no need for concern about the Government hyping up the measure at a sensitive time because the Government would shut down advertising, as the new clause sought.

However, when the hon. Lady concluded her speech, instead of accepting my new clause, which merely asked the Government to confirm that advertising should not take place during that period, she urged the Committee to reject the amendment. She said: Parents need a basic level of information to allow them to make sensible choices on behalf of their children". A little earlier, she had said: It is essential to the operation of the policy that parents are well informed when they receive the voucher and have the opportunity to open a CTF account. That is at the heart of the financial education programme embedded in the Bill. Clearly, during such a period"2014; the run-up to the election— the child trust fund information pack would be distributed to all parents, and I would be very surprised were the hon. Gentleman to suggest that we should not distribute such an information pack."—[Official Report, Standing Committee A, 20 January 2004; c. 232.]

That raises a problem for the child trust fund account. Although the Government may seek to abide by the letter of the rules and regulations by ending what could be considered to be advertising campaigns, they will retain a strong incentive to inform people as much as possible about the child trust fund account. We need some clarification from the Minister about where the boundary between advertising and publicity will be drawn. That is why new clause 7 says: The Government shall not advertise or publicise by the distribution of leaflets or other literature the introduction of child trust funds during the pre-election period.

Of course, the election period may not cover the spring of 2005. The date about which everyone is speculating may not be the date of the general election, as the Government may decide to delay it further. The major launch of the child trust fund accounts may have happened already, and the problem may not arise. However, it is possible that a May 2005 election might take place just as the Government launch a major campaign to publicise the payments to be made for cohorts of children going back to 1 September 2002.

If that happened, it would conflict with the advice given in the Cabinet Office paper to which I have already referred. Direct mail literature sent by the Government to inform people about the child trust fund account may cause concern in an election period. The Government need to be sensitive to this problem, as the number of people entitled to the payments is so large.

I hope that the Minister will confirm that if the child trust fund scheme is launched in the run-up to a general election, there will be no advertising campaign. Also, I hope that she will set out the safeguards that will be put in place to ensure that none of the publicity or information material associated with the payments can be perceived to be political, or an attempt to underpin the Government's prospects in the campaign.

Mr. George Osborne

We now come to the politics of the debate—a shame, given the constructive afternoon that we have had so far, in which hon. Members have worked together to improve the Bill. At the outset, let me say that I think that the Minister's motives in introducing the child trust funds are entirely pure. I have no doubt that she genuinely wants to encourage saving, to improve financial education and to build up the financial assets of those who are least well off in our society. However, she is surrounded by others who have impure thoughts and regard child trust funds as a clever election ploy.

Mr. Richard Bacon (South Norfolk) (Con)

Where are they?

4.45 pm
Mr. Osborne

My hon. Friend asks where they are, but I can tell him that they are not here: they lurk in the shadows, surrounding the Minister in the Treasury and in Downing street. The timings involved in the child trust fund proposals are strikingly suspicious. The proposals were announced in the April 2001 Budget, just a month before what was then the expected date of that year's general election. The scheme is due to be launched in April 2005—just one month before the most likely date of the next general election. Government amendment No. 44 reveals for the first time the date of the scheme's implementation as 6 April 2005. That date is not totally unexpected, and will appear on the face of the Bill. Any flexibility that remained in the legislation to delay implementation if the processes for delivering child trusts are not ready will disappear.

I am not a cynical person, and thought that curious timing—with the scheme's announcement one month before the last general election and its implementation one month before the likely date of the next general election—was just coincidence. Then I came across the minutes of the Institute for Public Policy Research summit held at 10 Downing street in 2002. I felt a bit like an anthropologist stumbling across a forgotten tribe in the forests of Papua New Guinea cut off from the modern world and unaware of what had been happening around them.

The tribe at the IPPR summit were still talking in mystical terms about the third way—in fact, they were talking about the third way within the third way. They were still inviting Will Hutton to attend their events and listened to everything that he had to say. A huge wave of nostalgia washed across me and brought back memories of cool Britannia, the stakeholder speech in Singapore and the days when Alastair Campbell and the right hon. Member for Hartlepool (Mr. Mandelson) ran things—mind you, Alastair Campbell and the right hon. Gentleman probably still do run things.

There was a presentation at that IPPR summit by Mr. Kevin Rudd, who I assume is still the Australian shadow Minister for Foreign Affairs. Maybe he has been promoted, or perhaps he has been sacked; I do not know what has happened to Mr. Rudd. I have not really kept up with the comings and goings on the Front Bench of the Australian Labour party. It is difficult enough keeping track of what goes on among shadow Ministers on my own party's Front Bench.

I am not sure what Mr. Rudd was doing at the IPPR summit, but he gave the opening presentation to the assembled luminaries, including the Financial Secretary to the Treasury and the Home Secretary—I am not sure what he was doing there either.

Ruth Kelly

What is wrong with that?

Mr. Osborne

It was not his Bill. It is surprising that the Chancellor of the Exchequer was not present, but the Home Secretary was present. Mr. Rudd talked about child trust funds and asset-based welfare. The minutes of that meeting concluded: Kevin finished his presentation with a potential problem. The long-term nature of the Child Trust Fund could mean that it does not fit well with the electoral cycle. It will need to be sold to the public as there are not necessarily any short-term gains to point to. The Government, with their inevitable genius for spotting political tricks, solved Kevin's problem for him because they are about to send out 1.8 million child trust fund vouchers to parents just before the next general election.

I am sure that such calculated political considerations did not enter the head of the Financial Secretary. Having worked with the hon. Lady in Committee, I genuinely do not think that she is one of those people always looking for a political advantage. The way in which she has engaged with Opposition Members during the passage of the Bill suggests that she does not always look for the party political advantage. Others probably do. I suspect that some of the timings relating to the Bill are motivated by the electoral cycle.

If that is the case, the Financial Secretary would surely agree that it would undermine many of her more wholesome objectives in successfully launching and promoting child trust funds. The timetable imposed for child trust funds would force financial providers and the Inland Revenue into a tight corner. Only yesterday, the Financial Secretary published the regulations. In less than one year, the hon. Lady will be sending out the first vouchers. During that period, providers will have to design their products, prepare systems, organise marketing and otherwise prepare for distributing the vouchers. I think the indication from the Government is that it will happen in January.

Even more worrying than the situation for the providers, in whom I have quite a lot of confidence, is the situation for the Inland Revenue. It, too, will have to get its systems up and running, and we already know what a mess it made of the introduction of tax credits. It is especially worrying that just after the introduction of the child trust funds, the Inland Revenue is to change its IT provider, and it is not yet clear who the new provider will be.

Furthermore, there is the question of what will happen when the election is called. The hon. Member for Yeovil (Mr. Laws) dealt with that by repeating what the Minister said in Committee, but it is not reassuring to realise that the launch of child trust funds and their promotional material could be interfered with by the election timetable. A simple solution would be for the Minister to accept my amendment No. 27, or my amendment No. 81 if the acceptance of a Government amendment renders amendment No. 27 inoperable. If the Minister accepted my amendment, she would give the Inland Revenue and providers more time, she would avoid any risk that an election campaign would interfere with the launch, and she would prevent the party political row that would inevitably have taken place.

That would not affect the success of child trust funds, because they do not mature for 18 years, so I commend my amendments to the House, and shall probably press amendment No. 81 to a vote if the Minister does not accept them.

Ruth Kelly

The new clauses and amendments are cynicism writ large. The hon. Members for Yeovil (Mr. Laws) and for Tatton (Mr. Osborne) both seem to think that somehow the Prime Minister will choose the general election date based on the date of the launch of the child trust funds. I can reassure them, because I am sure that my right hon. Friend is not even aware of the implementation date for the child trust funds.

We are committed to implementation in spring 2005. As the hon. Member for Tatton pointed out, the manifesto pledge was made before the last election, so it is only right that we should try to introduce the policy during this term of government. The 2005 introduction date for the child trust funds was announced in the Budget in 2003. Parents of eligible children born since 1 September 2002 are waiting to open their child trust fund accounts, and we want that to happen at the earliest opportunity.

The effect of new clause 7 would be to prevent any advertising of the child trust fund in a pre-election period. The hon. Member for Yeovil referred to the Government's responsibilities, and the point that I made in Committee about the fact that during any general election campaign the Government retain their responsibility to govern, and essential business must go on. It has long been the practice that once a general election is called, activities such as the advertising of policies are stopped, where possible, for the duration of the pre-election period. The proposal would thus have an impact not only on the child trust fund but also on the introduction of any Government policy during a general election campaign.

I remind the hon. Member for Tatton that a general election can be called at any time up to—I believe—summer 2006. Were an election to be called, advertising would undoubtedly be stopped. He has urged me to set out, today, in this place, the precise contents of the information pack that would be sent to parents.

Mr. Laws

If the Financial Secretary is willing to give us a guarantee that the child trust fund will not be advertised during a pre-election period, why did she oppose the new clause on that issue that we debated in Committee?

Ruth Kelly

I think that the hon. Gentleman misinterprets the remarks that I made in Committee. I have always said that the basic information pack would be sent out to parents. It is integral to the policy that parents be fully informed, so that they can make a reasonable and informed judgment about the sort of account that they should open on behalf of their child. It is essential to the operation of the policy that financial education be built into that decision. However, the surrounding publicity and advertising would stop, exactly in line with the Cabinet Office guidelines. Of course, I can give the hon. Gentleman that assurance.

Mr. Laws

I want the Financial Secretary to confirm what assurances she is giving to me. Is the first assurance that the child trust fund will not be advertised during the pre-election period? Can she give me a second reassurance that any material at all that is issued to promote the child trust fund account during that period will be considered very carefully indeed, to ensure that it is not outside the spirit of the existing Cabinet Office guidelines?

Ruth Kelly

The hon. Gentleman makes his point, but he is deliberately misinterpreting the nature of my comments. Of course all advertising would cease. Of course there would be no generic marketing of the new policy during any general election campaign. Cabinet Office guidelines, from which he quotes, set out precisely the rules that we would follow during a general election campaign, and we would follow them. I can give him that assurance. He asks for that commitment; I give him that commitment.

The proposal to remove the provision that allows the child trust fund to be phased in would not be helpful for parents, providers or the Revenue, as allowing parents of children born before April 2005 to set up child trust fund accounts before the launch date will allow people to manage what would otherwise be a pronounced peak of work at launch. Providers have welcomed the proposal to phase in the launch.

The Government amendments are technical, so I do not intend to speak to them unless hon. Members wish me to do so. I hope that the arguments that I have set out and the assurances that I have given will allow the hon. Gentleman to withdraw the motion.

Mr. Laws

I am not sure whether I am fully reassured by the Financial Secretary, not least because she appears to continue to contradict herself. At times she indicates that there will be no advertising in the pre-election period, but the fact remains that in Committee, she resisted an amendment that asked for precisely that and no more than that. She criticises the Opposition amendments as "cynicism writ large". As the hon. Member for Tatton (Mr. Osborne) said, we are trying to protect her from the cynicism of others in the Government. She ought to welcome the measures that we are taking to try to protect her integrity.

The Financial Secretary went on to say that we were somehow suggesting that the general election date had been fixed to match the launch of the child trust fund. That is not what we are suggesting at all; we are saying that it is fortuitous that the launch of the child trust fund and the payments under it seem to be matching the most likely date of a general election. That is our concern.

We have made a little bit of progress today in getting the Financial Secretary to confirm that the child trust fund account will not be advertised during the general election campaign. I wish she was a little clearer in recognising that, as is indicated in the Cabinet Office paper on advertising information during an election period, there will still be tension between the Government's understandable desire to give information about the child trust fund to people during its launch and the possibility that that information could be given during a pre-election period, when people are bound to be looking carefully at what any information on the child trust fund says and the way in which that might seek to promote the Government. Obviously, the comments from various IPPR seminars cited by the hon. Gentleman are relevant. I note that he may wish to press one of his amendments to a Division.

Mr. Osborne

I am told that apparently, I should indicate—now is a good time to do so—that we shall seek a Division, probably on amendment No. 81 if an earlier Government amendment is accepted.

Mr. Laws

After that indication, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

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