Phillip Blond welcomes the announcement by the coalition government to introduce Junior ISAs

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Phillip Blond, who has been described as a key policy guru to David Cameron, has welcomed the decision by the Coalition Government to introduce a replacement to the Child Trust Fund (CTF). The proposals announced by Treasury Minister Mark Hoban will see the creation of a ‘Junior ISA’ worth up to £1,200 a year. The new ‘Junior ISA’ would be different to the old CTF scheme with the funds held by the child who will not be able to access them until adulthood. Parents will still play an active role in investing the funds deciding whether to invest in a simple cash account, or in stocks and shares. Earlier this year Mr Blond and Dr Sandra Gruescu Head of Children’s and Families Unit at ResPublica published a hard hitting report, calling on the Government to introduce a set of radical policies designed to boast savings to help free Britain’s poor from “debt serfdom” and create a new child focused savings account. The report, Asset Building for Children – Creating a new civic savings platform for young people, highlighted the chasm in assets that has opened up between rich and poor, pointing out rich households had around 100 times the wealth of those at the bottom - numbers that dwarf differences in income. It said that Britain had become more of a “plutocracy than a democracy” and warned that efforts to create a fair society with opportunity for all will founder unless urgent action is taken to address the asset gap. It put forward a raft of measures aimed at addressing these problems including: • A new type of tax free savings account or Asset Building for Children (ABC) account • The new account to be delivered by retaining the infrastructure of the Child Trust Funds • ABC accounts to be extended to cover all children • Backed the scrapping of the half billion pound government contribution • Tax free savings up to £3,600 per year • A Reward Scheme to encourage saving with money off leisure facilities and new private sector incentives offered by the banks and saving providers • An ABC Fund made up of voluntary donations by businesses, charities and well-off individuals to match ABC contributions from Britain’s poorest households. • Financial capability programme with the voluntary sector to improve financial literacy Mr Blond said: “Too many Britons are trapped in a world of welfare and low wages, where owning little, they can change even less. “And with minimal prospect of advancement for them or their children, it often appears as if we are creating and expanding a new servile class progressively and aggressively cut off from the world of assets and opportunity. “These are the conditions that incubate the debt disease that has captured our culture (both public and private) and allowed our citizens to mortgage their futures and make fictional all their hopes and aspirations. “With assets come opportunity and the possibility to advance up the social ladder. Locking people out of wealth and access to assets condemns them to debt serfdom where they must borrow to make ends meet and where futures are consumed by the demands of the present. “I am delighted that the Government has responded positively to our report and the many voices calling for the creation of a new savings platform for children. Assets matter more than income and asset inequality is the great driver of contemporary inequality and the true source of social immobility and debt dependence. “What is being put forward by Mark Hoban and the Government represents a massive step forward from where we were just two months ago and I am confident that the new ‘Junior ISA’ can be developed into a first rate savings platform that will help create a genuinely free and fair society.” For media inquiries, please contact Alistair Thompson of Media Intelligence Partners Ltd on 07970 162225 or 0203 008 8145. ends NOTES TO EDITORS Phillip Blond is a political thinker, writer and journalist. He was senior lecturer in theology and philosophy at the University of Cumbria until he left to take up a career in politics and public policy. He founded and now directs the think-tank ResPublica. He writes for the Guardian, The Times, Financial Times, the Daily Mail, the Independent and the Sunday Times and appears regularly on the BBC. ResPublica is an independent, non-partisan public policy think-tank established in 2009 by Phillip Blond. ResPublica aims to bring about a revolution in centre-right thinking and produce a policy agenda aimed at addressing the triple crisis of economic, social and cultural collapse. ResPublica believes that through a revived civic communitarianism, the fostering of a culture of innovation in public services, and the creation of a new economic infrastructure, local communities will assume their proper role as the drivers of social transformation, the owners of new assets and the instigators of economic growth. The Child Trust Fund (CTF) was a long-term tax free savings and investment account for children born on or after September 1st 2002. Child Trust Funds were first launched in January 2005 by the Labour Government, having previously been promised in their 2001 election manifesto to encourage saving and promote an understanding of personal finance. Under the regulations – valid in this form until August 2010 – eligible children received a £250 CTF voucher to start their account, which the child can then access when they reach 18. When the child reaches the age of seven the government had planned to pay an extra £250 into the account, which is known as the ‘Age 7 payment’. On 22nd June, Chancellor of the Exchequer George Osborne announced his plans to scrap the Child Trust Fund scheme as the half billion pound programme was unaffordable.

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