Govt plan to launch ads for baby bonds sparks controversy

A Government plan to promote its scheme to put up to £500 in a fund for every new-born baby has run into controversy because the campaign is likely to break in the run-up to the next general election.

Although Whitehall sources said no decision on an ad push had been taken, they suggested a spend of between £2 million and £3 million was likely after a pitch this autumn.

The Tories and Liberal Democrats have demanded a ban on advertising for so-called "baby bonds" in the build-up to the election, which is widely expected next May or June. The Treasury has rejected the demand but has promised that, under Whitehall rules, most government ads would stop during the three-week election campaign.

Ruth Kelly, the Financial Secretary to the Treasury, said the Government planned to send an information pack to all parents: "It is integral to the policy that parents be fully informed, so they can make a reasonable and informed judgment about the sort of account that they should open on behalf of their child.

"Of course, all advertising would cease, and there would be no generic marketing of the policy during any general election campaign."

The minister accused the opposition parties of being "cynical", saying that the introduction of the child trust funds would not determine the date of the election, which could be held as late as 2006.

But David Laws, the Liberal Democrats' economic spokesman, called for an immediate ban on "baby bond" ads once the election is called.

George Osborne, a frontbench Tory spokesman on the economy, said 1.8 million vouchers for child trust funds would be sent out from next January.

"I suspect that some of the timings relating to the Bill are motivated by the electoral cycle," he said.

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