Last week’s budget gave birth to “baby bonds”, conceived nine moths
ago as part of the chancellor’s plans for building a “Britainof
economic strength and social justice”.
Gordon Brown announced that the bonds – known as child trust funds
(CTFs) – will be backdated to every child born since September 2002
and will comprise an initial endowment of at least £250,
rising to £500 for the poorest one-third.
The government will top up the funds with two more instalments
during primary and secondary school, and parents and grandparents
can contribute up to £1,000 a year.
“At age 18, on the basis of historic rates of return, the child
trust fund will accumulate assets that will enable all young people
to have more of the choices that were once available only to some,”
Brown told the House of Commons.
Although children’s charities welcomed the CTFs, the Child Poverty
Action Group warned that many poorer families would feel it was
“jam tomorrow rather than help today” and that without more urgent
financial support for children the government would miss its first
milestone target – to reduce child poverty by a quarter by 2004-5.
Barnardo’s called for a minimum income standard to take all
families out of poverty, and for extra support for parents of
At the other end of the age spectrum, Brown upped the annual winter
fuel payments to households with a pensioner aged 80 or over from
£200 to £300. He also extended the period over which all
pensioners in hospital receive their full pension from six to 52
For those of working age the Budget set out its goal of “full
employment in every region and every nation in the UK”. To help
achieve this, Brown announced more help for unemployed people
looking for work, including additional interventions in the first
six months and discretionary powers for Jobcentres to award grants.
Housing benefit will also be reformed so that people starting work
will continue to be paid the out-of-work rate until their benefits
Brown announced an enhanced New Deal from April 2004 for partners
of benefit claimants and a package of reforms to help lone parents,
including £20 per week in eight pilot areas to cover lone
parents’ job search costs, such as child care. There was also news
of a £8m fund to help people from ethnic minorities into work,
and an expansion of the highly skilled migrant programme.
To improve the employment chances of young offenders, Brown said he
was looking at ways to nationally roll out Reading’s successful
training for work scheme, which aims to provide young offenders
with skills while they are serving their sentences with the offer
of a job on release. Young people will also benefit from a
£16m two-year fund to pay for enterprise advisers, who will
work alongside head teachers in 1,000 secondary schools in
Plans to introduce a new personal tax exemption for foster carers
receiving less than £10,000 a year per residence plus an
additional amount per child were also confirmed.
Turning to the workforce, Brown said measures would be implemented
to ensure that public sector pay systems included a stronger
regional and local dimension, so pay could respond to local market
Finally, Brown said he had asked the coming spending review to
examine the future of child care and family friendly policies. The
next review will also look at the reforms needed to end child
poverty, and the changes needed to empower charitable and voluntary
groups to play a larger role in society.