Social Fund Maternity Grant Amendment Regulations 2011

Baroness Massey of Darwen Excerpts

Monday 7th March 2011 Lords Chamber

[Lord Touhig]

My Lords, my noble friend Lady Sherlock secured this debate and I pay tribute to her for doing so. However, it is with great regret that she has had to withdraw, and she has asked me to speak in her place. I agreed to do so willingly, but alas I fear that I will not execute the task as well as she would have done. I should also declare an interest as president of HomeStart in my former constituency of Islwyn.

The two poorest groups in our society are those at the extreme end of the age range—pensioners and young children—and the change the Government are making to the Social Fund Maternity Grant is an outright attack on young children born into some of the poorest families in Britain. Put simply, at present women receiving certain means-tested benefits can get a grant of £500 to help with the costs of a new baby. The Government intend to abolish this payment for the second and subsequent children. A woman who gives birth to a new baby will lose the grant if she already has another child aged under 16 in the household.

The Government are planning £9 billion of cuts in the tax and benefits system, and some £4 billion of those are going to come from child support. I believe that this shows that the Government are out of touch. They assume that parents need only to spend the grant to acquire a pram, a pushchair, a cot, baby clothes and all that is needed for a newborn child just once in a lifetime. I suppose they imagine that all these things can be stored away as the first child grows out of them in case another child follows, and they assume that this storage can go on for 16 years.

This is an attack on some 150,000 of the poorest families in Britain. The Government are taking this step without proper consultation and against the advice of well-known family support groups such as Gingerbread and the Social Security Advisory Committee. Yes, even the advice of the Social Security Advisory Committee, the independent body which provides impartial advice to the Government on these matters, is being ignored. The advisory committee has described the proposals to restrict the maternity grant as lacking a “coherently argued rationale” and has stated that they appear to run counter to Government policy to abolish child poverty by 2020.

The department responsible, the Department for Work and Pensions, has stated that:

“This change will undoubtedly cause hardship for some cases. However this will not impact on the child poverty figures”,

due to the fact that maternity grants are one-off lump-sum payments which do nothing to increase annual income. The department is known across Whitehall as DWP, which is also a word in Welsh—“dwp” means stupid and daft in the head. Anyone who actually believes that this measure will not impact on child poverty is not taking the issue seriously at all. Indeed, Gingerbread has said:

“The DWP fails to recognise the significant and negative impact that this measure will have on the ability of poor and low-income families to buy essential baby equipment. Single parents are more likely than couple families to be poor: 52% of children in single parent families grow up poor. If a single parent has just separated from a partner, they are likely to have experienced a drop in income. If they are pregnant, or later become pregnant and cannot claim the [grant] because they already have a child under 16, many will struggle to buy items such as a pushchair, cot and car seat. If they have fled domestic violence and have no belongings for themselves or their other child, this situation is [made even worse]. The impact is likely to be particularly great where there is more than a two-year gap between children”.

Gingerbread also points out that the,

“DWP mistakenly assumes that [the grant] will have been claimed for the first child”,

But the organisation’s helpline suggests that large numbers of people do not claim the grant for their child through ignorance or the complexity of the tax and benefits system.

The Merits of Statutory Instruments Committee of your Lordships' House said that the Government’s target of 24 January for the coming into force of the instrument in order for the change to take effect in April of this year,

“has severely curtailed both the time available for consultation and for Parliamentary scrutiny”.

Furthermore, the SSAC was able to consult for only nine days on this proposal—a dismally short period. Alas, this is becoming typical of the Government, who seem to view consultation and scrutiny as optional, rather than viewing them as mechanisms which can improve government proposals and mitigate their worst, ill-thought-out effects.

As the Merits Committee noted, no impact assessment has been provided to Parliament. Little information has been given on the costs of alternative policy options and the department had not explained why the option chosen was preferred. Again, this looks like policy made on the hoof for short-term political, rather than long-term welfare, considerations.

The Social Security Advisory Committee suggested that the way in which Government have alighted on some decisions as part of this policy change lacks reasoned explanation. The committee pointed to the way in which the Government had arrived at the exceptions to the new rules, and why the option to restrict to payments who are the only children under 16 in a family was chosen above the other options presented to them. The proposal is that if there is a child in the family under the age of 16, there is no entitlement to the maternity grant. The SSAC believes that,

“this is an unreasonably high threshold and should be set at a much lower age, possibly as low as five”.

This point is reiterated by the Merits Committee, which noted:

“The rationale for limiting eligibility to households where there is no child under 16 is not explained. While it is reasonable to expect some recycling of baby equipment among siblings, the SSAC points out that it seems unrealistic to think that parents of a fifteen year old would retain baby goods that long”.

My wife and I have four children, and there was a five-year gap between the birth of our third and fourth children. I can tell your Lordships that when the fourth child arrived we had to go out and buy a whole new lot of equipment.

The advisory committee states that,

“the changes to the rules for Sure Start Maternity Grants are based on an assumption that the payments are made on the basis of meeting additional expenses incurred by the purchase of new items regarded as necessary for a baby, and that they fail to recognise ongoing or recurrent costs such as the need for the mother to eat healthily or for the home to be kept sufficiently warm”.

This would suggest that this policy, like so many that the Government have put forward, has not been properly thought through.

One respondent to the advisory committee noted that,

“each pregnancy and preparation for a baby costs an average of £1,600, and that this estimate does not simply include the ‘hardware’ required but also additional heating and travel costs for hospital visits: so there are considerable costs that cannot be met by ‘recycling’ goods from a previous pregnancy”.

The Government have not properly considered what costs incurred for children apply to every child and cannot be mitigated by hand-downs. As a result, their proposal to restrict maternity grants to the first child looks increasingly muddled and will produce significant hardships for families across the country.

There will be an intervening period of eight to 12 months between the introduction of the new rules for maternity grants and the introduction of mitigating measures to extend Social Fund budgeting loans to include maternity items. The Social Security Advisory Committee said that,

“this would mean that many people will be left without any alternative means for meeting the additional expenditure incurred by a second or subsequent baby beyond going without or having to resort to high cost lenders”.

One of the most worrying aspects of the proposals is the lack of a safety net for those who lose their grant. While a loan facility will eventually be available, the changes are not being put in place at the same time. The mitigation measures will not come into effect until at least eight months after the cuts to maternity grants have been implemented.

The committee said that it was particularly concerned about this, stating:

“It would be a difficult enough step for someone who would have been entitled to an SSMG of £500, to go to having to apply for a budgeting loan for the required items. But it is an entirely different matter if there is no provision to be made at all within the benefits system and they were expected to borrow commercially instead. People eligible for an SSMG would be unlikely to have access to low-cost credit – indeed many would need to borrow at APRs in excess of 100 or even 200%”.

The advisory committee urged the Government to look at halving their budget for this grant and to look at the impact of other changes; for example, to housing benefit, health in pregnancy grant and tax credits. It said that no such evaluation of the rationale had been presented to them. Respondents to the advisory committee pointed out that the cuts in the maternity grant will cause hardships for families which may translate into additional costs for other bodies such as local authority social services departments and the NHS. The SSAC therefore concluded that a more tempered level of saving may be achieved than other outcomes would yield.

The committee also observed that the low-income families eligible to apply for the grant are those most likely to have been in temporary accommodation or in homes with cramped conditions, which would make it unlikely that they would have had places for long-term, regular storage of baby equipment. Anyone with a new child knows how much stuff children can generate as they grow up and grow out of their baby clothing and equipment. People living in cramped conditions simply cannot keep such things just in case they have more children. The policy ignores conditions in low-income families and the realities of their situations, quite possibly because too many in the Government have no experience of, or any concern about, people living in such conditions. Most concerning, it risks exposing children born into low-income families to poverty from the moment they are born. That simply cannot be right for the fourth-richest country on the planet. It is not morally right either.

Rather than listening to the SSAC, the body which is supposed to advise the Government on these issues, the Government have instead pushed ahead blindly and said that they have no plans even to review the policy. It is typical of the arrogance that this Government now display that they never seem to listen to reasoned arguments or objections from any outside source, but rather they assume that they are right and that everyone else is wrong.

The Merits Committee concluded:

“This instrument seems to have been inadequately planned and explained”.

It wisely suggested that your Lordships,

“may wish to press the DWP for a better explanation of why the other options suggested were not pursued and what the anticipated impact on new mothers and children in low-income families will be”.

I hope that the Minister has some encouraging answers.

[Baroness Massey of Darwen]

My Lords, I support the Motion of Regret put so ably by my noble friend Lord Touhig. I shall speak very briefly and widen out the debate a little.

There has been a lot of discussion in your Lordships' House recently on early intervention. There have also been many reports recently, including one by Frank Field on child poverty and one by Graham Allen on early intervention. I thought and hoped that the Government would have understood the importance of spending now to save later.

During the recent debate on parenting of the noble Lord, Lord Northbourne, I was greatly impressed by a statement from the noble Lord, Lord Ramsbotham. He cited the Graham Allen report on early intervention, which said that decades of expensive late intervention had failed. In his response, the Minister, the noble Lord, Lord Hill, said:

“I hope that it is also fair to say that this Government, like the previous Government, recognise the importance of the early years in children's lives and development”.—[Official Report, 3/2/11; col. 1500.]

How true, but do the Government still recognise that?

This measure, cutting a grant to low-income families, may well contribute to both poverty and to poorer outcomes for children. It may not seem like much money, but it is to some people and some families generally. The loss of the money could affect the lives of not only the child or children—and some people have twins—but also affect the relationship between the parents. Stress can be created by poverty, and poverty affects relationships. It also affects maternal health, which is a key to good health and achievement in children.