Savings Accounts and Health in Pregnancy Grant Bill

Baroness Howe of Idlicote Excerpts

Tuesday 7th December 2010 Lords Chamber

[Baroness Howe of Idlicote]

My Lords, I voted last week with Her Majesty’s Government on the Motion on the Bill, because, on balance, I believed that the Speaker’s ruling that it was a money Bill should be respected. However, in doing so I was certainly not in favour of the Bill’s aim to remove the child trust fund payments for all looked-after children born after January 2011. That would serve further to disadvantage some of our most disadvantaged children. That is why I am speaking today, and I will address only that aspect of the Bill.

As the noble Baroness, Lady Thornton, said, it appears that during the Bill’s passage in the other place, Paul Goggins, working with Barnardo’s and Action for Children, and after a sympathetic discussion with the Treasury Minister Mark Hoban, proposed an amendment based on the new junior ISA that the Government themselves proposed to introduce in 2011. The scheme, which I am certainly not against in principle, will apparently allow parents to contribute limited tax-free sums each year for their children’s use when they became adults. Thus the amendment that Paul Goggins proposed would, as your Lordships have heard, ensure a yearly government grant, guaranteed for each looked-after child after she or he had been in care for more than three months. The cost would certainly be a reduction of, I think, £6.6 million from the saving of £500 million a year achieved by the abolition of the child trust fund, but it would at least ensure that these highly vulnerable children, too, have some help at that difficult time when they leave care and begin adult life.

That is the point at which the situation becomes obscure. There was, apparently, no prior indication that the Bill would be deemed a money Bill during Report in the other place. I understand that Paul Goggins therefore withdrew his amendment on the basis that, if the Government did not come up with their own satisfactory scheme for looked-after children, it could be tabled in your Lordships’ House—I would certainly have been very happy to table it. However, as we now know, due to the Speaker’s decision at that late stage of the Bill, the opportunity to amend the Bill in your Lordships’ House is no longer available.

My concern, and that of other noble Lords, is that by making the Bill a money Bill late in the process, we are not given the opportunity to amend and thereby ensure that there is an equivalent scheme for looked-after children. The result is that the Government risk being seen—I am sorry to say this, but it is true—as neglecting their responsibility to our country’s most vulnerable and disadvantaged children.

At Second Reading in the other place, the Government promised:

“To make sure parents have a clear, simple and accessible option to save for their children”.—[Official Report, Commons, 26/10/10; col. 212.]

However, without government contributions, how will the Government ensure that looked-after children have the same opportunity to begin life with a similarly adequate nest egg?

I dare say it will be argued that the junior ISA gives local authorities discretion to pay into savings accounts for looked-after children. However, considering that their budgets have been cut by 26 per cent over the next four years—I am not complaining about that, because I know savings have got to be made and we have to face that situation—how realistic an expectation is this, unless a sum from Government is ring-fenced for this specific purpose?

The evidence to support the value of financial assets for children in care is plentiful. As it stands, 90 per cent of 19 year-old care leavers were NEET—not in employment, education or training—in 2009, compared with 17 per cent of 18 year-olds in the general population. Financial assets through savings accounts can be vital for children as they make the transition from care to independence, not least if they are going to continue in education or training of some kind, as we hope they will.

As the Prime Minister explained at Question Time on 30 June, only 0.6 per cent of children are in care, but 23 per cent of adult prisoners in our prison system were in care. With limited resources, when these children in care grew up, they often had nowhere else to turn. More financial resources, not less, as well, of course, as other forms of community help, are certainly needed to support vulnerable children.

Frank Field's recent report, The Foundation Years: Preventing poor children becoming poor adults, which the Prime Minister apparently welcomed enthusiastically, further strengthened the case for providing the utmost support to children in their early years. The report found overwhelming evidence that life chances are most heavily predicated on their development in those vital first five years of life. All of us, especially the Government, have a responsibility to protect and support our country's most vulnerable children. I hope that the Minister will give noble Lords some indication that an appropriate government scheme for looked-after children will be produced, and tell us when.

I will end with a concern that I believe other noble Lords share. What is the Government's definition of a money Bill? We need to know when a Bill is a money Bill and when it is not. The procedure in the case of this Bill is particularly worrying. What was the justification for making the announcement so late in the Bill's passage through the other place? Any new Government face challenges. A coalition partnership may have more problems than most Governments in getting its legislation accepted. However, noble Lords need to be reassured that this kind of procedure is not going to be used as a way of easing a difficult issue through the parliamentary process.