There is no good reason to scrap the Child Trust Fund

The government’s decision to abolish the Child Trust Fund is staggeringly short-sighted.

The decision not only to cut the Child Trust Fund but to abolish it completely from next year may look like an easy win for a coalition of two parties never deeply committed to this policy. It is nonetheless staggeringly short-sighted.

The government wants to see families save more and borrow less, so why axe the one part of the welfare system that encourages them to build up a nest egg for their children? And why abolish this important step in ensuring that all children get a fair start as they enter adult life?

The answer, the new Chief Secretary to the Treasury, David Laws, tell us, is that it is unacceptable that "government payments into the scheme are essentially being funded by public borrowing". But this, of course, is nonsense. Public spending in the UK is not hypothecated to particular taxes or borrowing. It would make just as little sense to say that the police force was being abolished because it was being funded by borrowing.

The real reason is that this is a policy still in its infancy whose sceptics were too impatient to test its effectiveness. Introduced in 2002, the Child Trust Fund could never prove its worth until its first recipients received payments when they turned 18 -- another ten years from now.

And despite 4.8 million families having taken up the scheme, the government could be pretty confident that most would be too weary by the comings and goings of family life to take to the streets in protest.

So there you have it. Tomorrow's generation of adults gets to pay for the mistakes of today's.

No doubt every cut that the government announces this week and in the future will be greeted by squeals from some vested interest. But before we develop the stiffest of upper lips, could we just clarify some basic principles?

The new coalition government has made great play of its commitment to fairness. Indeed, in reference to the impending tide of cuts, the coalition agreement states:

Difficult decisions will have to be taken in the months and years ahead, but we will ensure that fairness is at the heart of those decisions so that all those most in need are protected.

Hasn't this government failed its own fairness test already?

Lisa Harker and Carey Oppenheim are the co-directors of the Institute for Public Policy Research.

Special offer: get 12 issues of the New Statesman for just £5.99 plus a free copy of "Liberty in the Age of Terror" by A C Grayling.

Getty
Show Hide image

Inside a shaken city: "I just want to be anywhere that’s not Manchester”

The morning after the bombing of the Manchester Arena has left the city's residents jumpy.

On Tuesday morning, the streets in Manchester city centre were eerily silent.

The commuter hub of Victoria Station - which backs onto the arena - was closed as police combed the area for clues, and despite Mayor Andy Burnham’s line of "business as usual", it looked like people were staying away.

Manchester Arena is the second largest indoor concert venue in Europe. With a capacity crowd of 18,000, on Monday night the venue was packed with young people from around the country - at least 22 of whom will never come home. At around 10.33pm, a suicide bomber detonated his device near the exit. Among the dead was an eight-year-old girl. Many more victims remain in hospital. 

Those Mancunians who were not alerted by the sirens woke to the news of their city's worst terrorist attack. Still, as the day went on, the city’s hubbub soon returned and, by lunchtime, there were shoppers and workers milling around Exchange Square and the town hall.

Tourists snapped images of the Albert Square building in the sunshine, and some even asked police for photographs like any other day.

But throughout the morning there were rumours and speculation about further incidents - the Arndale Centre was closed for a period after 11.40am while swathes of police descended, shutting off the main city centre thoroughfare of Market Street.

Corporation Street - closed off at Exchange Square - was at the centre of the city’s IRA blast. A postbox which survived the 1996 bombing stood in the foreground while officers stood guard, police tape fluttering around cordoned-off spaces.

It’s true that the streets of Manchester have known horror before, but not like this.

I spoke to students Beth and Melissa who were in the bustling centre when they saw people running from two different directions.

They vanished and ducked into River Island, when an alert came over the tannoy, and a staff member herded them through the back door onto the street.

“There were so many police stood outside the Arndale, it was so frightening,” Melissa told me.

“We thought it will be fine, it’ll be safe after last night. There were police everywhere walking in, and we felt like it would be fine.”

Beth said that they had planned a day of shopping, and weren’t put off by the attack.

“We heard about the arena this morning but we decided to come into the city, we were watching it all these morning, but you can’t let this stop you.”

They remembered the 1996 Arndale bombing, but added: “we were too young to really understand”.

And even now they’re older, they still did not really understand what had happened to the city.

“Theres nowhere to go, where’s safe? I just want to go home,” Melissa said. “I just want to be anywhere that’s not Manchester.”

Manchester has seen this sort of thing before - but so long ago that the stunned city dwellers are at a loss. In a city which feels under siege, no one is quite sure how anyone can keep us safe from an unknown threat

“We saw armed police on the streets - there were loads just then," Melissa said. "I trust them to keep us safe.”

But other observers were less comforted by the sign of firearms.

Ben, who I encountered standing outside an office block on Corporation Street watching the police, was not too forthcoming, except to say “They don’t know what they’re looking for, do they?” as I passed.

The spirit of the city is often invoked, and ahead of a vigil tonight in Albert Square, there will be solidarity and strength from the capital of the North.

But the community values which Mancunians hold dear are shaken to the core by what has happened here.

0800 7318496