My Lords, I thank the noble Lord for that speech and I am glad that he has so much enjoyed reading the details of Clause 48. I confirm that his understanding of these clauses is by and large correct.
The Government are most concerned, of course, about looked-after children. As I understand it, the change in the 2011 Act was introduced partly as a result of pressure from within the House of Lords, so we were doing our job properly at that time—I do not know who was involved in it; certainly, I was not myself. I am also told that a number of charitable bodies and philanthropists have in some instances added to these new junior ISAs for looked-after children, which seems to us to be a good public benefit and a step forward. That is very much part of where we are. The move to junior ISAs allows for a more flexible system, and it is expected that better-to-do parents and, speaking personally, better-to-do grandparents should contribute to junior ISAs when they can afford to do so. One is therefore most concerned about disadvantaged children.
The remainder of the clause concerns the transitional impact as one moves from child trust funds to junior ISAs; I wrote a note to the noble Lord, Lord Kennedy of Southwark, yesterday. Part of the transition is what happens to existing trust fund organisations, which may include credit unions, as much of the money is taken out. At a certain level, there is a point at which the scheme might become unviable. The Government are very concerned about those transition issues.
Financial education is a particular issue for looked-after children, but it is a broader issue for all children. This is why financial education now forms a part of the compulsory national curriculum in England in citizenship classes, which should teach 11 to 16 year-olds the functions and uses of money. Budgeting, managing risk and financial mathematics are also included in the maths curriculum for this age group. The noble Lord might say—I would probably agree with him—that we all know, and have often debated in this House, the inadequacies of citizenship education so far. There is clearly a long way to go. That is something on which I suspect that, again, the House of Lords in its revising role should keep exerting pressure on schools to make sure that citizenship education continues to improve. Of course, the child trust fund and the junior ISA provide an excellent way of increasing a child’s financial capacity and to learn about the role of savings, mortgages, trusts and the like.
The second amendment was about junior ISAs and protected child accounts. My understanding is that the reason for using “protected child accounts” rather
than “junior ISAs” is that, as we have often discovered, the exact names of financial instruments may change over the years, but they will continue to be protected child accounts even if they are later renamed from junior ISAs to something else. That is the simple reason for that. At the moment, we are of course talking about junior ISAs. The question about the transition from one to the other is well taken. We are of course concerned to provide the maximum amount of competition. If the noble Lord is not satisfied with anything I have had to say on this point, I am happy to write to him further on that. One wants a range of providers. We want, however, to make sure that the providers are viable and have sufficient financial reserves.
The noble Lord asked about the Financial Conduct Authority. I can answer with reference to both of these amendments: the FCA has a crucial role in ensuring that account holders are treated fairly, but its remit does not extend to making detailed changes to the child trust fund account rules. Such changes will be required if the safeguards envisaged in Clause 48 are applied. Changes to the CTF rules are most appropriately brought before Parliament by Her Majesty’s Treasury. I am sorry that the noble Lord is so suspicious of Her Majesty’s Treasury—I picked up on that—which has been responsible for the development of child trust funds and the detailed account rules since the account was created.
I think that the noble Lord was most concerned about Clause 48, which is again about making sure that, as we go through the transition, which he rightly points out will be from 2020 to 2029, we guard against any untoward developments. That is why Clause 48 is there: it is very much precautionary. It is intended to ensure that if things that we have not yet anticipated come along, the Government are able to respond. We consider it prudent to seek these powers, given the background of uncertainty about the impact of transferability on the child trust fund market. We do not know—and I cannot speculate on at the moment—what action the Government may need to take in this area or the timescale for such an intervention. However, if it became necessary to use these powers, the Government would have to act promptly and appropriately. Therefore, we felt that we should include this measure, with the proviso that it would be subject to the usual public law safeguards. The overriding interest would be to safeguard the interests of the trust fund holder.
The Government’s usual approach is to consult on changes to the child trust fund rules where possible. However, while the Government will always look to consult and engage interested groups wherever possible, they must also be free to intervene at short notice in response to market conditions. I hope that provides the reassurance the noble Lord seeks.