Savings Accounts and Health in Pregnancy Grant Bill

Kate Green Excerpts

Tuesday 26th October 2010 Commons Chamber

[Mr Hoban]

There was clearly a choice. We could have continued with these schemes and cut spending elsewhere, but we decided that it was better to take action now to tackle the deficit than to put that decision off, as the hon. Gentleman’s party would do, and therefore have to make deeper cuts in the future. I think the steps we are taking are the right course of action to tackle the deficit.

Although the previous Government had agreed with RBS and Lloyds Banking Group that they would introduce saving gateway schemes, none of the other big high street banks were planning to do so, and although the Post Office was going to offer the accounts, that was only because the previous Government had agreed to pay it to enable it to do so. Also, while a number of credit unions were signed up, not a single building society signed up to provide the saving gateway account. Therefore, although I appreciate the engagement of those who had planned to offer saving gateway accounts, I was concerned that not everyone in the eligible population would have had an accessible provider. For these reasons, we announced at the Budget that the saving gateway would not be introduced. We therefore stopped the Saving Gateway Accounts Act from coming into force, and this Bill repeals it altogether. Although we may want to come back to this idea at some point in the future, we have no plans to do so at present so it would be wrong to leave this legislation on the statute book.

[Kate Green (Stretford and Urmston) (Lab)]

The Minister alluded to the fact that credit unions were particularly interested in supporting this initiative, and he will be aware that credit unions are particularly likely to be located in communities with high concentrations of disadvantage and poverty. Therefore, although he says the scheme’s reach was not complete, does he accept that in fact it was potentially rather well targeted?

[Mr Hoban]

That assumes that there is a credit union in every deprived community, but in some such communities a credit union may not be accessible, and the Post Office would have stepped in only if a Government subsidy were provided, so I do not believe there was going to be a complete network of saving gateway account providers to ensure that every eligible person in this country would have been able to access an account.

Clause 3 addresses the health in pregnancy grant. It is a one-off cash payment of £190 to pregnant women. The previous Government said it was being introduced in recognition of the importance of a healthy diet during pregnancy. However, the National Childbirth Trust said that

“the evidence indicates that, if dietary intervention is to have an impact on birth weight and outcomes for the baby in later life, it should be started as early as possible.”

Given that the grant is not paid until the third trimester, it is not clear how effective it is, and although—

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[Mr Hanson]

It will indeed take away a key tool in helping to deal with inequality and poverty at the age of 18. The child trust fund encourages saving, particularly among people from the poorest parts of our communities.

[Kate Green]

Is not the Minister proposing tax breaks for savers’ children, benefiting families who pay tax—the better-off—and widening inequalities, because non-taxpayers will get no benefit at all?

[Mr Hanson]

My hon. Friend is exactly right, and from her background outside the House as well as inside it, she will know how important that contribution is, but let me move on to the Saving Gateway Accounts Bill, which was introduced in 2009 by the Labour Government, again to encourage people on low incomes to save for their future.

Cash savings accounts were created for those on lower incomes, providing a financial incentive to save, with the Government matching, pound for pound, the money that people saved in the scheme. The scheme was proposed in 2001: 22,000 people have so far taken part in the pilots, and £15 million has been invested in savings through those pilots. The accounts have run for two years, and they have been a positive way for people to start to save, with help and support for those in our poorest communities.

The first pilot ran between 2002 and 2004, and 1,500 saving gateway accounts have been opened in Cambridge, Cumbria, east London, Manchester and Hull, in the part of the world of my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson). Additional pilots have been run recently in South Yorkshire. Those schemes have shown that we can generate new savers, new saving and, indeed, help people on poorer incomes to put aside money to meet some of the challenges that they face in their daily lives.

Hon. Members need not listen to me about the importance of those schemes; let me give them an authoritative voice on the Saving Gateway Accounts Bill:

“The Bill serves a valuable purpose in encouraging people, particularly those on low incomes, to save. People on higher incomes have an opportunity to smooth out fluctuations in income and expenses to which those on low incomes do not have access. If the Bill is successful in encouraging people to save, it will enable them to create a modest buffer against variations in income, such as the unexpected expense of being laid-off for a short period. It will give people a degree of financial security they have not had hitherto.”—[Official Report, 25 February 2009; Vol. 488, c. 323.]

Those are not my words, nor those of my right hon. and hon. Friends; they are the words of the Minister, who is now introducing proposals to end such schemes, although he supported the 2009 Bill—doing one thing in opposition and, yet again, another thing in government. At a time when potentially 500,000 people are being laid off because of the public sector cuts as part of the comprehensive spending review, the Government will take that support away from those who need it most.

In the absence of the saving gateway scheme, how does the Minister propose to promote the culture of saving among people on lower incomes? As my hon. Friend the Member for Stretford and Urmston (Kate Green) said, how do we ensure that saving is not the preserve of the rich and that it is done throughout society, so that people can help themselves and ensure that they save for the future in partnership with the state?

If we turn to the last part of the Bill, we see the full force of the coalition’s new politics turning itself on those who are pregnant. Any hon. Member who is a parent knows that raising a child is a uniquely rewarding experience, but we all need to recognise that it can be financially challenging in the run-up to a birth and that it can be difficult for young mothers and young families. Not only was the health in pregnancy grant introduced in recognition of the health benefits of covering some of the additional costs involved during pregnancy, but it was paid universally to all mothers to ensure that they could buy help and support during the last weeks of their pregnancies. Such support covered healthy eating, vitamins, medicines, books on healthy pregnancy or the cost of maternity clothes or folic acid, as mentioned by my hon. Friend the Member for Bolton South East (Yasmin Qureshi). Folic acid can help to reduce the risk of spina bifida, but 400 mg costs £9.99 at Boots. The health in pregnancy grant can be used for those costs and put towards getting help and support for health, and it is linked specifically to ensure that advice is given to mothers in pregnancy as part of the deal.

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[Mr Hanson]

My hon. Friend quotes the chief executive of the National Childbirth Trust, but she could have also quoted the Royal College of Midwives, which said that there is an opportunity for midwives to communicate health advice to women and their families, as the grant is dependent on engagement with health practitioners. Never mind the cost of maternity dresses and other clothes, minerals, healthy eating, advice or taking time off work, these are important grants.

The Bill shows that the Government are out of touch with the needs of the vast majority of the British people. A £190 maternity grant may not seem much to some Government Members, but for the shop worker getting by on the minimum wage, it is a significant amount of money. For a woman with an unemployed partner, it might make a difference to the future health of their child. For those people, the grant makes a difference. Like the child trust fund, the grant is about investing in our future and in our children’s health and in giving them a good start and ensuring that they have a break at the age of 18, to make their way in life with positive support.

[Kate Green]

Does my right hon. Friend agree that one of the things that is likely to happen if women are given a sum of money in the seventh month of pregnancy is that they will go out and spend it, thereby also helping to regenerate their local economies?

[Mr Hanson]

Indeed. That is a good point, but I would say in passing to my hon. Friend that, unless I missed something, the Minister seemed to indicate that he did not feel that women would spend the money on things that matter for their pregnancy. He seemed to take a “shoes and nail varnish” approach in relation to what the grant has done. Most women take a great interest in the development of their children—that is the most important thing in their pregnancies—and they will do things to ensure that their children have a great start in life, and the grant was an opportunity to help in that respect.

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[Paul Maynard (Blackpool North and Cleveleys) (Con)]

It is a pleasure to follow the shadow Minister, the right hon. Member for Delyn (Mr Hanson), who was my first political foe when I was just 14 and he was leader of Vale Royal borough council. In the intervening 20 years, he has only got worse. That is a sad thing to have to say.

It is important that we remember why we are here today and what we are here to discuss. We are not here to discuss whether it is a good idea for families to save, or to encourage children to save. We are not here to discuss whether it is a good idea that pregnant women should enjoy good health during pregnancy. We are here to discuss whether the specific items of legislation introduced by the previous Government achieved their goals and warrant continuation.

The Labour Government had a fondness for introducing legislation willy-nilly, volume after volume of it. At no point did they ever feel a need to investigate whether their legislation achieved its goal. I have nothing against innovation in public policy. The work of think-tanks is important, and it is a disappointment to me that the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), is not in his place today to defend his creation, as I know he felt such a passion for it at the time.

What we are here to do today is to decide whether specific items of legislation were effective—not whether they were popular, whether they made Labour Members feel good about themselves, or whether they excited think-tanks, interest groups, pressure groups or campaigners. The question is whether they achieved what they set out to achieve. We cannot have such a discussion without considering the wider economic issues. Every day we are spending £120 million just paying off the debt that we inherited from Labour. I could spend that money in my constituency alone 40 times over. I am sure every Member in the House could do so. We must place the debate in the wider economic context.

There are two important tests that we should apply to any legislation. I call them the Ronseal test and the rhododendron test. The Ronseal test, for those who watch commercial television, might be a bit obvious: does it do what it says on the tin? Any piece of legislation and its effectiveness must be assessed on whether it achieves its goal.

The rhododendron test might be a little more obscure. I often find when listening to those who represent the left in British politics that they identify totemic pieces of legislation that they consider vital and which become representative of a much wider public policy area. They go on to defend that legislation to the hilt, thereby ignoring every other aspect of public policy in that area that could make a difference, just as in a parkland, where rhododendron may look beautiful but it covers so much ground that it chokes off wider growth that might be beneficial.

If we apply those two tests to the child trust fund, for example, how do they stack up? Originally, the former Prime Minister called it the baby bond. It was meant to be a nest egg, a form of what was then in vogue—asset-based welfare. Unfortunately, the fund was not much of an asset by the time the child got to 18. The scheme certainly was not what the philosophers behind the idea of asset-based welfare had in mind. Others sought to define it as progressive universalism. We have a habit in this country of trying to adopt fancy-pants names for new ideas, philosophies and ways of looking at politics, and I am not entirely clear what progressive universalism actually means.

[Kate Green]

I shall be happy to explain to the hon. Gentleman what progressive universalism means in the context of the child trust fund. It means that all children receive something but the poorest receive more. In that way, we obtain the benefit of popular support for a policy that directs more money to those who need it most.

[Paul Maynard]

I thank the hon. Lady for what I presume she thought would be a helpful contribution for idiots like me. I shall read a useful quotation from the Child Poverty Action Group in 2005, which I believe the hon. Lady chaired at the time. It is a lengthy quotation on the group’s approach to the fund, but it bears repeating:

“Although the Child Trust Fund will benefit some lower income families, we are concerned that families who are at greatest risk of living in severe and persistent poverty are the least likely to be able to contribute to the CTF, so their children will derive little or no financial benefits when they turn 18.”

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[Kate Green]

rose—

[Paul Maynard]

Forgive me, I shall not give way because I have not yet finished the quotation.

[Paul Maynard]

If the hon. Gentleman will calm down and let me finish the quotation, I shall happily give way. Learn some manners, sir, please.

The CPAG continued:

“The very children who would benefit most from having savings and assets are likely to derive least financial advantage from the scheme.”

I shall now give way to the hon. Lady.

[Kate Green]

I am very grateful to the hon. Gentleman. It is true that the CPAG, of which I was chief executive at the time to which he refers, had some misgivings about the initial design of the child trust fund. Thanks to our lobbying, I like to think, the product was improved over time and the extra payments for low-income children were then introduced. Does the hon. Gentleman not agree that that was rather a good development in a policy that is certainly still ripe for improvement, as he rightly says, but not for abolition?

[Paul Maynard]

Let us rejoin the theme of progressive universalism, which the hon. Lady so kindly and patronisingly explained to me. If the fund is so universal, why in the first four years did 25% of people not apply for it? To me, that is not universal; that is rather partial.

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[Richard Graham]

I have a specific suggestion on that, which I will come to in a moment. Meanwhile, I am sure that the hon. Lady will have noted earlier the intervention from my distinguished colleague on the Work and Pensions Committee, the hon. Member for Stretford and Urmston (Kate Green), who in an earlier career pointed out that CTFs do not necessarily reach the most vulnerable families. Arguably that was a flaw in the concept at the beginning.

[Kate Green]

It is important to clarify this point. I did not say that they did not reach the poorest. I said that it was difficult for the poorest to participate in the savings element. However, as my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) just pointed out, with an ISA product there would not be any element of asset building for the very poorest, because they would be unable to save for themselves.

[Richard Graham]

The only difference is that CTFs are funded by the Government, so we come to the argument about whether that funding can be used more effectively in the context of the goals. I was going to come on to that. I suggested that there are alternative forms of savings that are more effective than CTFs, have lower management fees and better performance, and come at no cost to the taxpayer.

I come to the next point made by the SCS alliance. It argues that CTFs have been

“one of the most successful government savings schemes ever”.

Members will agree that everything is relative. Clearly, CTFs did better than the previous Government’s attempt to create a savings scheme—the stakeholder scheme—which is a scheme that not even the right hon. Member for Delyn (Mr Hanson), in one of his more elaborate flights of fancy, could conceivably describe as having been an outstanding success. However, by comparison with the success of other savings schemes not run by the Government, CTFs have done only a relatively modest job.

The important thing is that, although Governments can, do and should create the structure for savings schemes, their track record in running them is not good. For example, do Members believe that we should be paying people to work for Her Majesty’s Revenue and Customs and spend their time advertising and promoting CTFs, or do we believe that they should be ensuring that benefits go to the right people and that we all pay the tax that we should pay? HMRC should not be in the advertising business.

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[Kate Green (Stretford and Urmston) (Lab)]

This is an incredibly serious debate and I would like to address what I believe are important points raised on both sides of the House. I shall deal with all three elements of the Bill—the health in pregnancy grant, the child trust fund and the saving gateway proposals—in the context of what I understand to be important drivers for this Government, such as reducing inequalities, improving social mobility and improving child outcomes. I shall also consider the extent to which the proposals meet the Government’s own fairness test.

I start with the proposal to abolish the health in pregnancy grant. There is considerable evidence to show the impact of poor maternal nutrition—during pregnancy and, importantly, prior to conception—on low birth weight, and the impact of that on a series of outcomes for child development down the line, including educational attainment and health outcomes. I certainly agree with the Conservative Members who said that a grant in the seventh month of pregnancy was not sufficiently early to achieve everything we would want to improve the well-being of pregnant women and their unborn children.

For women on low incomes, affording a healthy diet is a challenge. Indeed, women reliant on safety net benefits will, if they are under 25, have an income of £51.85 a week; and if they are over 25, £65.45 a week. Those amounts are sufficient to meet the minimum income standard determined by the Joseph Rowntree Foundation—£44 a week in order to afford a healthy diet. However, once we take into account other expenditure that has to be met out of those benefit payments—fuel, clothes, travel, personal items, insurance, utilities and so forth—it means in practice that women conceiving and bearing children on benefits could find themselves with as little as £10 a week to spend on food. Clearly, none of us could eat a healthy diet on that.

It is right, as Opposition Members have repeatedly pointed out, that despite its perhaps unfortunate name, the health in pregnancy grant has the potential to achieve much more than simply help with a healthy diet. It helps to meet a number of the costs associated with preparing for and coping with the arrival of a new baby. Obviously, parents across the income spectrum will be grateful for any help. Although I was rather pooh-poohed by the Minister when I suggested that such a grant is likely to be spent pretty readily so it will also help the economy, there is lots of evidence to show that if we give money to parents at a time when their costs rise, they will go out and spend it quickly—they need to; there are items that they must buy. This will make a modest contribution to our economic regeneration, although that was hardly the overriding reason for introducing the grant in the first place.

[Alison McGovern]

Does my hon. Friend agree that this is similar to other kinds of grant such as the winter fuel payment, which we award in cash terms to get people through what is an expensive time? It is most efficient not to cross-question what it is actually spent on, but these grants are important in recognising that people go through difficult and expensive times.

[Kate Green]

That is absolutely right on a number of fronts. First, as my hon. Friend says, this sort of grant is designed to help with specific expensive times in the course of people’s lives. It is important to recognise that specifying what it gets spent on is not necessary to ensure that it does good. In fact, there is a lot of evidence to show that if we give more money to parents, particularly to mothers, they will spend it on things that will help their kids.

I understand the concerns of Government Members about universal benefits, but this is a universal benefit. It goes to people who are financially better off as well as to those in greater need. As Opposition Members have repeatedly sought to explain, universal benefits are the most effective for reaching the poorest. They are the easiest to administer and the easiest to claim; there are no complicated cliff edges or recalculations. As such, I believe it is important to retain a range of universal benefits within the totality of support for families with children. I therefore think that the health in pregnancy grant has a useful role to play.

Even if we accept for a moment Government Members’ concerns that the benefit has been poorly targeted, that is hardly a case for scrapping it outright, especially when basic benefits are too low for the poorest women to be able to afford to eat healthily before their child is born. Surely, far from seeking to abolish the benefit, an ambitious Government who were keen to improve the outcomes of the poorest families and children would want to extend its scope or consider other ways of improving the adequacy of out-of-work benefits.

[George Freeman]

I am enjoying the hon. Lady’s speech and I acknowledge her expertise. In recommending the extension of the benefit, however, will she explain where she would get the money from?

[Kate Green]

There is work to be done to consider the balance of taxation versus spending cuts, as Labour Members have repeatedly pointed out. As for where the money is taken from, it is notable that the coalition Government, whether by accident or design—I suspect that it is more by accident, but I give them the benefit of the doubt—have taken more from women and children. An evening up of the way in which the spending axe fell might provide more scope.

Far from seeking to improve the financial position of some of the poorest in society—those who are reliant on safety-net benefits—some of the coalition’s measures will make matters worse: the changes to housing benefit; the VAT rise, which will reduce the spending power of the poorest; and the plans to link safety-net benefits to the consumer prices index, which will, over time, significantly reduce the value of those benefits to low-income families, and will therefore have an impact on the disposable incomes of the poorest women before conception, during pregnancy and after birth. I urge Government Members to think about how they would address that.

[Chris Williamson (Derby North) (Lab)]

Does my hon. Friend agree that the policies pursued by the Con-Dem coalition will lead at best to the economy growing slowly, and at worst to a double-dip recession, which will result in a much lower income tax take for the Exchequer? Our proposals to improve and support growth in the economy would generate the tax revenues that would enable us to fund schemes such as the health in pregnancy grant.

[Kate Green]

Absolutely. Although you will not want this evening’s debate to extend into the whole range of economic policy, Mr Deputy Speaker, clearly, a strategy for growth and increasing tax receipts will be vital to protect the poorest families.

[Sarah Newton]

I, too, appreciate the hon. Lady’s expertise, but I must point her to the growth in the UK economy, which I hope she is reading about in the newspapers. We should celebrate the fact that we have the second-fastest growth rate in the G20.

[Kate Green]

I very much welcome the growth in the UK economy in the third quarter of this year, but, with respect, it is early days for Government Members to take all the credit for that. I suspect that it was the fiscal stimulus put into the economy by the previous Chancellor of the Exchequer that underpinned the ability of businesses to continue to hire and of people to stay in work. All Labour Members genuinely hope that that long tail effect will continue, but we feel that it is at risk.

On the savings aspects of the Bill, I cannot understand the Government’s logic, given their stated ambitions to reduce inequality and to encourage a savings habit and, in the case of the Secretary of State for Work and Pensions, the strong focus on helping people to reduce and stay out of debt. The child trust fund and saving gateway have helped low-income savers to acquire a savings habit and have assisted their money management. As child poverty has fallen since 2005, the child poverty impact of the measures is beside the point, because they have not diverted money from successful strategies to tackle child poverty, but are in addition to those strategies. They were intended to take on board the evidence of the protective effect of having an asset, which is especially important in social mobility.

[Cathy Jamieson]

Does my hon. Friend agree it is vital that looked-after children have that asset built? Given that their parents are not in a position to do that, we have a responsibility, as corporate parents, to find another way, if the Government will not reinstate child trust funds.

[Kate Green]

I hope that Conservative Members and the Minister will hear that contribution in the spirit in which we all feel it. This country has a poor record on outcomes for looked-after children, who enter adult life singularly poorly provided for financially. The child trust fund was a small step towards beginning to rectify that. As my hon. Friend says—and I hope the Government heed this—if the child trust fund is no longer to be the mechanism through which looked-after children are given some sort of nest egg with which to embark on adult life, I hope that Ministers will look for another way to secure the financial futures of such children. It is not sufficient to say that we will improve education, health and Sure Start support, important though those are. Plenty of evidence shows the importance for young people, especially those from disadvantaged backgrounds—and looked-after young people most of all—of having a financial asset behind them.

The hon. Member for Gloucester (Richard Graham), who I am sorry is no longer in the Chamber, cited the briefing that some Members had received from the Save Child Savings alliance. I was struck by the numbers he shared with us: 4.5 million child trust fund accounts are open; £2 billion is under management; and £22 million a month is saved in those funds. That is a lot of money being saved and set aside for our children’s futures. I strongly urge the Government to take note of that success. The vast majority of families saving are on modest, medium or lower incomes, certainly of less than £50,000, and many of them on much less. The hon. Gentleman mentioned that, I think, 24% of families were not saving at all. He is right to draw attention to the position of those families, but I question what they will save with instead, if we remove the child trust fund. If the Government do not save on behalf of the poorest children, I very much doubt that a tax break, for families who probably do not pay tax anyway, will suddenly magic up savings for the poorest children. I ask the Government to address that point.

The child trust fund is well targeted for its purpose, which is to deliver an asset to young people as they start out on adult life. Better-off families can afford to support their children with university fees, renting their first flat, buying their first car, perhaps starting a business, having a gap year—all markers of social stability, and therefore at the heart of what the Government rightly want young people from low-income backgrounds to be able to participate in. I am genuinely at a loss to understand why a Government who repeatedly, and unjustly, lambast Labour’s record in relation to social mobility and inequality, should totally dismantle a savings vehicle that has the potential to reduce inequalities, and instead propose a savings vehicle that will widen those inequalities by benefiting only those who are better off.

I am just as puzzled by the Government’s attitude to the saving gateway. Pilots in different parts of the country have shown that, coupled with outreach and money advice, it helped to support a savings habit, provided low-income families with a cushion enabling them to cope with crises, allowed them to build up modest assets over time, and made possible additional savings that would not have been possible otherwise.

I am surprised—more than surprised; indeed, I am shocked—that a Government who are happy to extend tax breaks to savers and to maintain them on ISA savings, pension contributions and inheritance tax will not provide support to boost the savings of the poorest. I ask Ministers how that can possibly be fair.

[Alison McGovern]

I thank my hon. Friend for giving way again. She is making a comprehensive and excellent speech. Does she agree that what the financial services sector needs now are additional deposits, and that offering tax breaks to those who are already saving will not be half as effective as continuing programmes which, according to all the evidence, produced those additional deposits and improved the savings culture?

[Kate Green]

I think that the Government should be very wary about dismantling a scheme that has generated additional savings, for exactly the reason that my hon. Friend has given.

What concerns me most is the impact of the Bill on the Government’s commitment to reducing inequality. We already have a significantly unequal distribution of assets. Up to 20% of households have no assets at all. The highest-earning 10% hold half the assets, and two thirds of households have savings of less than £3,000. I accept that we are not handing on a proud record to the incoming Government, but I would have expected them to conduct a rigorous equality impact assessment of their own proposals as a result of their determination to do a little better than that.

The equality impact assessment that accompanies the Bill is thin in the extreme. It fails in any way to recognise the lower earning power in the labour market of women, disabled people and members of ethnic minorities: a lower earning power that translates into a lesser ability to set money aside in savings, and ultimately, therefore, into lower asset holding. Its analysis of the saving habits of members of ethnic minorities is scanty, although research from the Runnymede Trust would have informed the Government quite quickly that at least 60% of Asian and black British families have no savings at all. The fact that that is twice the number of white households in the same position should concern us greatly.

[Sarah Newton]

I am just as passionate about the inequalities in our country as Labour Members, and I am sure that I speak for all Conservative Members. Our drive to enter politics was prompted by a wish to end the vast inequalities that have arisen over the past decade. Does the hon. Lady agree that the best way to help people to help themselves in that regard is through education and employment?

[Kate Green]

It is not a case of either/or. We should be doing everything possible. We should be maximising families’ financial stability and security through education, employment and a redistribution of income and wealth.

One misconception should be properly analysed. It is absolutely not the case that inequality rose exponentially under Labour. In fact, it more or less flatlined. It rose a bit during the last couple of years of Labour government, but according to the Institute for Fiscal Studies—admittedly not the Government’s favourite think tank—without the measures taken by Labour between 1997 and 2010, given the trends experienced under the previous Conservative Government, it would have been very much worse.

The hon. Lady and other Members on the Government Benches are right to say that we are all anxious to reduce inequalities; what I do not understand is how on earth the Government think that proposals of this kind will do that. How on earth do they think that removing the saving gateway will address the gender inequality involved in the fact that women have 40% less in savings than men? How on earth do they think that removing the child trust fund and the saving gateway—benefits that provided extra money or extra access for people with disabilities—will deal with the inequality of disabled people?

[John Hemming (Birmingham, Yardley) (LD)]

The hon. Lady asks how on earth the Bill will reduce inequality. It will do so by removing universal benefits and replacing them with targeted benefits.

[Kate Green]

First, let me remind the hon. Gentleman of what I said earlier about the effectiveness of universal benefits in reaching the poorest. Secondly, even if we accept the hon. Gentleman’s contention on its own terms, it does not provide a case for abolishing those benefits. It may provide a case for retaining the existing structures and targeting them for a time. Obviously I do not want that to happen—I want us to maintain as much universal support as we can—but at the very least I ask Government Members why they want to rip the whole thing up and throw it out, rather than trying to target it more effectively.

[John Hemming]

rose—

[Kate Green]

I will not give way, because I am about to end my speech.

I urge the Government to reconsider their proposal to abolish these benefits. I ask them to examine ways in which they might be able to maintain structures that have been effective, and have the potential to continue to be effective, in supporting the poorest families in the immediate future and—this is also important—in the longer term. Unless they come up with credible alternatives to reduce and remove income and wealth inequalities, I will not support their proposals, and I will not support the Second Reading of the Bill.

[Several hon. Members]

rose—

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[Jacob Rees-Mogg]

The hon. Gentleman’s point is fundamentally flawed. In 1997, the socialist Government decided to stick to Conservative spending targets. That is the one sensible decision that they made. It is not surprising that they managed to reduce the public debt by doing what the Conservatives had said that they would do. As for the deficit that built up before the crisis hit, there was a structural deficit—probably equivalent to 7% or 8% of GDP—which had resulted from excessive and extravagant expenditure. That is the nub of what we are debating today. We need to examine these benefits, and establish whether they are right in principle.

I will declare an interest. My three children have been the fortunate beneficiaries of £250 each—£250 spent extraordinarily well, Members may think, beneficially and wisely, so that in 18 years’ time my children will have something to spend when they are a little older. Is this really a sensible use of taxpayers’ money? It is too small a sum to make a difference even with the benefits of compound interest, yet too large a sum for our public finances to stand when aggregated across the whole of the economy and the total number of children who will be born. It is a wrong benefit, which is rightly being abolished. To contradict the hon. Member for Stretford and Urmston (Kate Green), who spoke before me, it is also a benefit that cannot be spent for 18 years; it will be of no economic benefit until the child is 18.

[Kate Green]

I apologise if I have misled the hon. Gentleman, but what I said was that the health in pregnancy grant would be spent immediately. I absolutely accept that the child trust fund moneys are locked up until the child reaches the age of 18.

[Jacob Rees-Mogg]

I thank the hon. Lady for that useful clarification.

The health in pregnancy benefit is paid to ladies towards the end of their pregnancy so that they can eat properly. Again, my wife was entitled to it. I have in the past been mobbed up somewhat on nannies and issues relating to that subject, but the one type of nanny of which I most firmly disapprove is the nanny state. This patronising approach, saying to these ladies, “You ought to eat your greens and here’s some money so you can do so,” is not what government is about. The Government are here to allow people to lead their lives as freely as they possibly may, without interference from the state while also providing a safety net for those who fall on hard times, not to tell people how to lead their lives, at the expense of the taxpayer and the economy.