Politicians are often accused of only ever thinking in the short term, that they think up policies to win the next election, not to provide for the next generation. But this week, a whole new generation of young people will see the difference Labour can make to their lives even long after it left office.
On Tuesday the first people to benefit from Labour’s flagship Child Trust Funds will turn 18. For the first time, they can now access money that was put aside for them by the Labour government all those years ago.
For every child born from 1 September 2002 until the Conservatives closed the scheme in January 2011, the Labour government invested at least £250 in a fund that only they can access. The money went into an account their parents could open with a financial services provider, using a voucher sent out by the government. For children whose parents didn’t use their voucher, the government set up an account for them.
Parents and others could pay more money into the account too, subject to an annual cap. In Wales, the Welsh Labour government put extra money in when children reached primary school age. Children with disabilities were entitled to extra annual payments into their trust fund from the government, because Labour recognised the extra needs young adults with disabilities face.
The idea behind the policy was simple but also imaginative. Governments could support families in ways that ensured they could access the opportunities that savings can provide – the ability to put down a deposit on a flat, buy a car, start a business or whatever else they chose. Labour wanted to extend to every young person the options that wealthier families took for granted.
The contrast with the government in office today is stark. People turning 18 today and in the years to come will know all too well what a mess the Conservatives are making of their futures. Schools closed without guidance on how to provide distance learning. Schools reopened without any but the most general instructions on how to do so. Futures decided by a government keener to avoid grade inflation than do to right by young people, then decisions reversed, leaving universities to sort out the mess. A generation of school-leavers has been let down by a government which doesn’t do its homework.
But for years to come, 50,000 young people each month will come of age and be able to access their Child Trust Fund. The challenge is that not everyone knows its there. Because the Conservatives stopped paying money into the scheme and then cancelled it altogether, many people may have forgotten that they have that money to call theirs. Consumer group Which? estimated last year that this could apply to as many as 3m children and young people, covering accounts containing as much as £2.5bn.
It is crucial that the government ensures that 18 year olds are able to access the money Labour set aside for them. HMRC has made it easier than it used to be and that is welcome but so far the government’s information campaign has hardly cut through.
In the months and years to come, every parent, every school, and every employer can help ensure people know there is money waiting for them and how to access it. Every trust fund – and every choice it enables – will serve as a reminder of what a Labour government can do to make our lives better and our society fairer.
Bridget Phillipson is shadow chief secretary to the Treasury
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