Introduction: the issue of responsible use

Critics argue that universal capital grants (CGs) are unlikely to make much long-term difference to economic equality or to personal freedom simply because many account holders will use them irresponsibly. Recent public opinion research on CGs reveals real concern over responsible use in the public at large. Chapters Two and Seven both provide evidence of this, as do some early media responses to the Child Trust Fund (CTF) (see, for example, the report in the Daily Mail, 11 January 2005). Unless we tackle the responsible use issue, the political (and moral) case for using scarce public monies to develop such policies further will be significantly weakened. This chapter explores how this issue might be addressed.

We proceed as follows. First, in Section 1 we distinguish three strategies for promoting responsible use: complementary education; eligibility restriction; and use restriction. The most frequently proposed strategy is that of use restriction. But it faces some tough questions. Is it wrong in principle to limit the freedom of citizens to how they may use their CGs? Which uses should be on the menu for people to spend their CGs on? Is it practical to limit the range of uses to which CGs can be put? Sections 2 to 4 consider these questions in turn. We argue that, while use restrictions are probably not wrong in principle, the practical problems are considerable. Section 5 therefore explores an alternative, more educationally based approach.

We conclude that it is best to encourage responsible use of CTFs through a version of this educational approach. However, in developing the citizen's stake policy in the future, one option is to complement the CTF with individual accounts that are tied to specific uses or contingencies, such as care responsibilities or training. If the administrative challenge posed by such schemes is manageable, then this approach, which clearly involves an element of use restriction, is also worth considering.

Three strategies

When we speak of responsible use of CGs we might mean one of two things. The first is socially constructive use, by which we mean making use of CGs in ways that contribute to the good of the community. Or we might mean prudent use, by which we mean using the CG in a way that improves or secures the asset position of the individual.