Social Fund Maternity Grant Amendment Regulations 2011

Lord Liddle Excerpts

Monday 7th March 2011 Lords Chamber

Turning back to the issue of where these savings will go, we have to look at these matters in the round. I have talked about the work programme and the universal benefit Bill. I would also like to look at the other issue relating to children, which is the child tax credit. I understand that there is going to be a recycling of £1.25 billion of savings back into the child credit system in the next financial year and just under £2 billion —£1.85 billion—in the year after. If the child tax credit is designed for anything, it is to enhance support to poorer children and families. Taken in the round, will these measures ensure that the poorest and most vulnerable in our society are protected? I am sure that few noble Lords feel entirely comfortable with these regulations, especially given the as-yet-to-happen benefits of the changes being put in place by the Government, to which some of these savings will contribute. However, we need to be certain in our own minds that the whole package, seen together, will help to lift people out of poverty and will protect those who are most vulnerable in our society.

[Lord Liddle]

My Lords, I respond in part to what the noble Lord, Lord German, has just said. My noble friends have made a strong case for why this measure should not be made by the Government. The noble Lord makes a perfectly fair point: we are in a mess with our public finances and what else would we do? In these circumstances, political choices have to be made. The thing that worries me about the Government’s policies is that, yes, there is a welcome increase in the child tax credit, but if you put that on one side there is an accumulation of things that will hit very poor families particularly hard. We had a debate last year—it was one of the first debates that I spoke in when I arrived—on the child trust fund, which is being abolished. We know that the housing benefit changes will particularly affect poor families in rented accommodation in high-rent parts of the country; some of those might well be young families where there has been a separation and the only alternative is to move into high-rent property. We know that the Sure Start budgets are being preserved, but only in cash terms, and that there is quite a squeeze on them.

In terms of political priorities, the Government have decided to target poor families, I am afraid to say. That is morally very wrong. It belies the claim that in addressing the crisis—I do not underestimate the fact that we have a very serious public finance problem— we are all in this together. Frankly, the people who are being targeted are the people who do not have a strong voice, who perhaps are not very politically motivated and who do not often go to the ballot box, although they may do so a little more frequently from now on than they have in the recent past. None the less, they are people who do not have a record of voting in elections and they are easy game in political terms. That is what I find so disreputable in this targeting of poor families with cuts.

One thing that we have all learnt in the past 10 or 15 years from a lot of new evidence is that there is, first of all, a clear relationship between poverty and stress in the family and between stress in the family and child development. Many eminent experts have validated that relationship, but we are choosing as a result of this measure to increase the pressure on those poor families, which will lead to more stress and have a negative impact on child development.

Some people in the government parties think that if you face a choice of priorities it is better to spend the money on services than on financial transfers. There is a bit of that here and I think that it is one of the reasons why the Government decided to tackle the welfare budget. Of course, there are reforms in the welfare budget that we all want to see. I am not saying that there should not be any reform in the welfare budget, but it is wrong to characterise this kind of thing as a handout; it has a profound effect on opportunity in later life and is vital if we really believe in opportunity. All the parties in this Chamber say that they believe in equal opportunity but, if we believe in equal opportunity, focusing the available money on poor families and helping their children to get a good start in life is one of the most important things that as a society we can do.

[Lord Blackwell]

As I listen to this debate, I find myself completely out of sympathy with those proposing this Motion. It reminds me of attitudes that I thought we had moved past, of assuming that the state has an unlimited pot of money and that any spending is necessarily morally good. Of course, we all like justifying giving money to people, but the truth is that welfare has two sides to it. Every pound that we give to a family who are welfare recipients is a pound that we take in tax from another family who are having to bear the burden of supporting the first family.

A measure of welfare is, of course, an essential part of a modern society, but it is not a one-way street. We have to balance the amount of money that we spend on our welfare budget with the amount that we are prepared to take off other hard-working families who are not receiving these benefits. When people think about families spending additional money on new equipment for new children, they should spare a thought for the hard-working families who are also often poor but not in receipt of welfare benefits and who are not being given money to go out and buy a new buggy, cot or changing mat et cetera. Those people resent paying extra money in tax when they do not think it absolutely necessary that the recipients get it.

I would not and do not criticise the fact that there is the grant for first children, which is appropriate, but I do not accept the argument that the most useful way in which we could spend extra money taken in tax is to make this grant available for subsequent children. If we want to deal with equality of opportunity, I would much rather spend that money on education than give it to people to spend on buying a new buggy. We need to keep this in perspective and accept that there are two sides to every pound spent on welfare. It is not simply about taking money out of some endless pot owned by the state.