Baby bond scheme launched

Gordon Brown made a bid for the parent vote yesterday as he officially launched the government's flagship child trust funds, which are aimed at giving every youngster a good financial start in life.

With the first information packs and vouchers due to be sent out in the next few days, and an advertising campaign starting on Monday, the chancellor said the aim was to ensure that "every child in our country has assets and wealth, and that no child is left out".

However, it was the issue of Mr Brown's trust in the prime minister - following claims that the chancellor told Tony Blair he no longer believed a word he said - that dominated the launch press conference. Mr Brown batted away several questions relating to the alleged breakdown in trust between them as he tried to keep the focus on the "baby bond" scheme.

The scheme goes live in April and is likely to cost more than £4bn in government handouts over the next 18 years.

The new funds will benefit every child born after August 31, 2002 by awarding them a government cash "endowment" at birth.

For most children the initial payment, in the form of a voucher, will be £250, with youngsters from the poorest third of families receiving £500.

A further government payment will be made on the child's seventh birthday, and Mr Brown is proposing this should also be £250, or £500 for children from lower-income families.

Parents, grandparents and others can between them put in up to £1,200 a year to boost the value of the funds, with the aim being to build up a pot of money available at 18.

The first vouchers should start arriving next week.

Mr Brown and Margaret Hodge, the children minister, yesterday announced the names of the 75 companies that will be providing or dis tributing the funds. They range from tiny friendly societies to big banks such as Barclays, HSBC and NatWest, from retailers such as Boots and Mothercare to solicitors and charities.

The chancellor's one-year-old son, John, is among the beneficiaries of the government's largesse. Mr Brown joked: "I must emphasise that the starting date was not the birth of my son."

A survey released yesterday indicated that the government has some way to go in spreading the message. Sainsbury's Bank said 18% of parents with children who qualify had never heard of child trust funds.