Child Trust Funds

Lord Ponsonby of Shulbrede Excerpts

Monday 11th October 2021 Lords Chamber

[Lord Wolfson of Tredegar (Con)]

My Lords, we have consulted widely across industry with the major providers. I have to say to my noble friend that it is the case, I am afraid, that there was a lacuna here. I think the noble Lord, Lord Blunkett, who is not in his place now, candidly accepted that when child trust funds were put in place, no thought was given to people who would not be able to give instructions to banks at the time they turned 18. The Mental Capacity Act in 2005 only made that position more difficult. So we are now dealing with a problem that has been exacerbated by subsequent legislation. The way to deal with it is a small payments scheme: that is what we are going to consult on.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, a few weeks ago, I spoke to Teddy Nyahasha, who is chief executive of OneFamily, a financial services firm that has administered 1.6 million child trust funds. The central point Mr Nyahasha made to me was that small donations or payments of up to £5,000 are made through something called the fair access protocol. He was seeking some recognition of that. If there was some recognition, there would be wider access for other charities and providers to expand the fair access protocol. Can the Minister say what he is doing about this?

[Lord Wolfson of Tredegar (Con)]

My Lords, my officials met Mr Nyahasha on 17 August, and we are well aware of this proposal. The problem is that it is not a matter of the Government recognising the scheme; the scheme, I am afraid, is inconsistent with the Mental Capacity Act, and it is fundamental to the rule of law that the Government act in accordance with legislation passed by this Parliament. Therefore, we cannot just bless schemes that are inconsistent with the legislation. If we want to solve this, we have to change the legislation. That is what the consultation is aimed at.