Savings Accounts and Health in Pregnancy Grant Bill

Earl of Listowel Excerpts

Tuesday 7th December 2010 Lords Chamber

[The Earl of Listowel]

My Lords, I begin by declaring my interest as vice chair of the Associate Parliamentary Group for Looked After Children and Care Leavers, and as a patron of the Who Cares? Trust, an advocacy group working for the interests of young people in care, championing in particular their education over the years. I begin by expressing my gratitude to noble Lords for their concern about young people in care, which has been expressed on all sides of the House in the debate.

I want also to make an apology. I am sorry for giving a Second Reading speech in the procedural debate relating to this Bill last week. I recognise that I was trespassing on the conventions of the House. I ask the forgiveness of noble Lords, but as is often the case, there is little time to prepare for our debates and I was responding as best I could to the strong concerns of agencies working in this area.

I thank the Minister for his opening speech, but I was reminded that he is something of a purveyor of bad news and that it might be tempting for him to shut his ears to the criticisms being levelled at him. Recently I spoke to a man from Ireland who was over here to make money for a few weeks before returning to spend time with his family. He was doing this because there is simply no employment for him over there. So we cannot be complacent about the current extraordinary fiscal deficit. It was also good to be reminded of the positive indicators for employment growth produced by the Office for Budget Responsibility. A saving of £500 million will be made as a result of the abolition measures set out in this Bill, and I will come back to that in a moment. First, I ask the Minister whether he considers it likely, in the current circumstances, that local authorities will be able to fund the proposed ISA funds. Has he taken soundings to this effect?

I welcome the comment of the noble Lord, Lord Newby, on the need to focus particularly on this group of children. My noble friend Lady Howe spoke eloquently on their behalf, and highlighted the difficult period of transition for these children as they leave care. A quarter leave care at the age of 16, but despite the pilot schemes that have been set up to enable children to remain with their foster carers until the age of 18, many of them feel that they are being pushed out into the adult world prematurely. These children often have chaotic childhood histories, not only in their own families but all too often within the care system itself. They can be passed from foster carer to foster carer, to children’s home and then back again. So it is important to bear in mind that they may be beginning to put their lives together at some point between the ages of 18 and 21, and that this nest egg may be an important means by which they can change the direction of their lives during this time. The Minister may say that the £500 million has already been accounted for in the budgetary plans. I hope that he will consider whether there may be some scope for rebudgeting in this area.

I want to set out in some detail the proposal made by the honourable Paul Goggins. I know that this is a Second Reading debate, but since we will not have the opportunity to discuss any details in Committee or on Report, I hope it may be helpful to outline the key features of his proposal.

Any child who enters local authority care under Sections 20 or 31 of the Children Act 1989, or the equivalent legislation in Scotland and Northern Ireland, and remains in care for a minimum of 13 weeks, would be eligible for a junior ISA. After 13 weeks the responsible local authority must send the child’s details to Her Majesty’s Revenue and Customs, which will then open an account. HMRC will make an initial payment of £250. The responsible local authority must notify HMRC if the child spends more than 26 weeks in the next year in care. HMRC will then make a further contribution of £100. The same applies in any subsequent year that the child spends in care until he reaches his 18th birthday. Local authorities, which are the benefactors, can contribute additional amounts to the account subject to the general conditions laid down in relation to a junior ISA. No child who has a child trust fund would qualify for a junior ISA under this scheme, which applies equally to children in England, Wales, Scotland and Northern Ireland. I shall not go into too much detail but the overall annual cost of the scheme is estimated to be £6.6 million—however, this has to be an approximate figure.

The noble Baroness, Lady Noakes, raised an important point generally about how the child trust funds might be misused at the age of 18 or whenever the child benefits from them. This may apply particularly to looked-after children when they come of age and we will need to look carefully at how the money is administered to ensure that it is used in their best interests and not to their detriment.

I hope to short circuit much of what I had planned to say. Will the Minister meet with interested Members of your Lordships’ House early in the new year so that we can discuss what provisions might be put in place to secure the interests of children in care? Given that there will be no opportunity for further deliberation and the many concerns which have arisen, it is important that this issue is not lost. I hope the Minister will consider that.

I pay tribute to the work of the right honourable Iain Duncan Smith and the Centre for Social Justice and to their recognition of the needs of these children and the way in which we have let them down in the past. I also pay tribute to the previous Government for the many measures they took to improve outcomes for children. I know it sometimes seemed that they were investing huge sums of money and were making little progress, but it is encouraging to learn from the latest research that 10 years ago only 1 per cent of children in our care system went on to university; now it is 8 or 9 per cent—a 800 per cent increase or more. It is still poor, but it is a vast improvement on the past. We need to sustain that momentum; we must not fall back when it comes to keeping our eye on these children. It is not that we do not care about them but, if we do not prioritise them, they will simply fall back again because their needs are so complex and so difficult to meet.

I pay tribute also to the Frank Buttle Trust and its chief executive, Gerri McAndrew. The trust has played an important role in this improvement with its kitemark universities, ensuring that care leavers are given the support they need at university. I look forward to the Minister’s response.

--- Later in debate ---

[Lord Sassoon]

My Lords, I am grateful to the noble Lord. He is right to say that some of these points were raised by him, which is why I thought it was right to address them. This is an important point. I can confirm what he asked me to confirm, but I think that I should move on to address some of the many other points that were made on this money Bill.

The point that attracted the most interventions—and it is an important point—was on junior ISAs for looked-after children. That point was raised at the opening of the debate by the noble Baroness, Lady Thornton, who reminded us that proposals were raised in another place in that area, and a number of my noble friends and the noble Earl have touched on the point. I start by reiterating what my honourable friend the Financial Secretary said in another place—that we would need to think about this carefully and that we will think about it carefully. He has had conversations and we need to recognise the limitation of resources that are available. There is certainly no unallocated funding in the Department for Education budget that could be used for it, but we are considering the issue. My honourable friend is going to work with the Minister for Children. He made it clear that if we wanted to do something in this area, it would be possible to do it outside the scope of this Bill—a point which I think was touched on by the noble Baroness, Lady Howe of Idlicote. It does not require the Bill to be in place. I think that the noble Lord, Lord Griffiths, also touched on that point.

I assure my noble friend Lady Browning that I do indeed talk to my colleagues. I was talking to the Financial Secretary only this morning and I shall relay these messages back in. Yes, the Treasury is a siloed place. My proposal that Ministers in the Treasury should all sit in an open-plan office has not yet found favour but my noble friend encourages me onward in that objective. The noble Earl also made a practical suggestion on whether an additional meeting involving noble Lords would be helpful. As I have said, my honourable friend the Financial Secretary is having meetings. I am not sure which additional meetings would be helpful but I certainly accept his offer.

[The Earl of Listowel]

If it might help the Minister, it might be particularly useful to meet the Minister to discuss this with his honourable friend and with Mr Tim Loughton early in the new year. That might be welcomed by your Lordships—as I look around the House, perhaps not—but that was certainly the sort of thing that I had in mind.

[Lord Sassoon]

I will relay the message back and discuss it with the Financial Secretary. There were also questions on the capacity of local authorities. My noble friend Lady Ritchie of Brompton gave the most considered view from a local authority perspective, as she should. She talked about local authorities being under pressure. Certainly, I did not hear her say that it would be impossible for local authorities to find funding in these areas, but of course they have to make difficult choices—ones which, going forward, will not be constrained by so much ring-fencing in their budgets, as has been recognised.