hen Gordon Brown announced the child trust fund during his Budget speech, David Blunkett, sitting beside the Chancellor, waved his arms and jiggled his body so animatedly that I feared he would have some kind of fit.
Perhaps the Home Secretary was simply afflicted by a call of nature; but if he was indeed celebrating the fund (popularly known as "baby bonds"), I could understand his delight. It was Mr Blunkett, as education secretary, who most strongly pushed the idea when it first surfaced in 1999.
The idea is that the fund matures when the child is 18; he or she then has a nest-egg which can be used to finance further or higher education, to start a business, to buy property or (the Chancellor appears surprisingly liberal on this matter) to go on a cocaine-snorting binge. Inequalities of wealth are as important as inequalities of income. Half the population has less than pound;500 in savings, and 10 per cent have no assets whatever.
The child trust fund would give poor children something of the same security and confidence that their richer peers enjoy and therefore, it is argued, encourage them to raise their ambitions.
Unfortunately, Mr Brown also needs to raise his ambitions. The figures discussed in 1999 were much larger than those in his Budget. In that year, I ran an article in the New Statesman from Robert Reich, a former member of President Clinton's administration, headlined:"Give pound;50,000 to every boy and girl."
Americans always think big. Our own Labour ministers were considering, according to reports, sums of between pound;7,500 and pound;10,000 for 18-year-olds.
Compare this with the Chancellor's proposal that every new-born baby gets pound;250 - or pound;500 if it is from a poor home. There is talk of modest top-ups at 5, 11 and 16, but it seems unlikely that even the wonders of compound interest or a stock market revival would leave any 18-year-old with more than pound;2,000, and probably much less. Something is usually better than nothing but, in this case, I am not so sure. pound;2,000 is ample for a couple of wild weeks in Ibiza, but hardly enough for anything more ambitious.
I suspect Mr Brown and other ministers were frightened by the reaction of people like Andrew Neil to the idea of giving 18-year-olds as much as pound;10,000."What? Even Prince Andrew?" spluttered an apoplectic Mr Neil when we discussed the proposal on the radio in 1999. Well, actually, yes.
Look at it like this. If university students (including Prince William) still attended courses free of charge, they would receive, in effect, a gift of around pound;12,000 from the state. My sole objection to this arrangement was that the state offered no similar gift to young people who never made it to university and who happened to come disproportionately from poor homes. It was an extraordinarily regressive form of public expenditure, subsidising the middle-classes at the expense of the working-classes. Even with top-up fees, there will be a subsidy of at least pound;3,000.
So if I were Mr Brown, I would invite middle-class parents who whinge about tuition fees to back a baby bond big enough to yield pound;12,000 for 18-year-olds. Students would then have the money to pay for their courses while others could use it for something else.
How would I raise the money? I would introduce a proper inheritance tax; the present system raises peanuts for the Exchequer and allows so many dodges that it is practically voluntary. Thus, as wealth cascades down to the children of the rich, I would divert some of it to the children of the poor. That would surely cause Mr Blunkett - who remains an old socialist at heart - to dance a jig round the Commons chamber.
Peter Wilby is editor of the New Statesman