I had a drunken conversation with an old friend recently. We were playing that favourite pub game, ‘what the hell good has this damn Labour government done?’ I know – sad. But interesting, as generally it comes to resemble The Life of Brian’s Romans scene. Except in place of Terry Gilliam talking about aqueducts, I talk about the Child Trust Fund.
In this year’s budget, Gordon Brown announced that all children born after September 2002 will be eligible for a baby bond. In 2005, when the Inland Revenue sort their computers out, they can all open an account into which the government will have placed an initial deposit. Poorer children will get more. This nest egg will grow, with additional contributions from family and government, into a lump sum accessible at the age of eighteen. All teenagers will be given a running start to their adult lives.
The baby bond represents one area where Labour has forged a new debate. It is a unique policy and there is nothing similar anywhere else in the world. Because of this, it has stirred up interest from Australia to Canada, and from the US to Singapore.
But it is no gimmick. The CTF is grounded in the desire to reduce a critical inequality: that of access to wealth in early adulthood. It has solid foundations in progressive political thought.
There is a long tradition of political philosophers pondering the importance of some form of ownership. From Tom Paine, darling of the eighteenth-century republican left, to Tony Atkinson, doyen of modern social policy, there has always been a strong progressive case for trying to reduce asset inequality. Asset-building is about citizenship and inclusion; it is about empowering people; and it is about life chances. All of these are touchstone issues for the left. Interestingly, when the chancellor needed convincing about the CTF, one of his ministers invited him to imagine the difference between starting adult life with the cushion that family wealth provides, and starting out with nothing to fall back on.
Of course, a concern for assets doesn’t mean the state should not seek a more equal distribution of income; it should. Instead the CTF is recognition of other inequalities that need to be tackled. And, crucially, it is that rare thing in British politics – a progressive and popular policy. It’s a success that needs to be built on.
As the pointy-heads attempt to produce a better manifesto than in 2001 (not hard), I would invite them to consider three challenges that need to be met. First, the CTF needs to be made politically secure. One way of achieving this would be to create a sure revenue stream by making an explicit link to a reformed inheritance tax. We should not be naive about the difficulty of reforming this utterly dysfunctional tax, but if there is an opportunity, this is it. There is a neat symmetry between a fairer treatment of inherited assets and providing children with wealth more equally to help make a reality of equal opportunity.
Second, the CTF needs to be seen in the context of active citizenship. Government now knows that it needs to work with civil society and communities to achieve its goals; it can’t simply do things to people. But for many, particularly on low incomes, there is little incentive to engage actively in their communities or in volunteering. Consideration should be given to allowing account holders to earn credits, through, for example, voluntary work, which will boost their fund.
And, last, there is a challenge to ensure inclusion. The danger is that those most in need – children in care, or the disabled – find it hardest to contribute to their accounts. Specially tailored policies based on but in addition to the CTF could be developed for such groups.
Put these three pledges in the manifesto and the questions ‘what have the New Labourites ever done for us?’ will become even easier to answer.