Savings Accounts and Health in Pregnancy Grant Bill

Stephen Williams Excerpts

Monday 22nd November 2010 Commons Chamber

The important part of assisting is not just to give people advice. There is a great deal of advice out there, and there needs to be more of it—I certainly would not disagree with that—but this scheme, because of the matching in it, is about giving people practical help and incentives. It is qualitatively different from giving people advice at school or through an annual health check on their finances, when they can tell the financial adviser that there is no money. That would not be particularly fruitful for a lot of families. This is a practical scheme. It is about matching saving; it is about incentivising saving.

[Stephen Williams (Bristol West) (LD)]

The hon. Lady is dismissive of the importance of advice, good numeracy education in schools and an understanding of money. Proper budgeting and gaining an understanding of how to spread what I accept are limited means—I agree that this Government desperately need to deal with poverty in this country—are important; she should not be so dismissive of the importance of advice and good numeracy education in schools.

[Sheila Gilmore]

I was not being dismissive of advice; I said that it is not enough in itself. To suggest that it can be a substitute for something like the saving gateway is to miss the point—the real nudge, or the real incentive, that comes from the matching.

It has been suggested that there were not enough outlets for people to use the saving gateway, but the housing association movement was very interested in it and had a great deal of discussion about how it could become, in effect, a front end for people who wanted to save through the saving gateway scheme.

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[Stephen Williams]

I shall try to be brief so that the hon. Member for Stretford and Urmston (Kate Green) can get in. The right hon. Member for Delyn (Mr Hanson), who leads for the Labour party, said that there had been more than 20 Divisions during deliberations on the Bill, but I think that only two principles have been at stake. The first is deficit reduction, and that has been dealt with comprehensively by my hon. Friend the Member for Birmingham, Yardley (John Hemming) and the Minister. The second is a matter of dogma, to use the right hon. Gentleman’s word, and that is what I want to talk about.

What is the role of the state in ensuring that people can make a journey out of the poverty into which they were born into more successful adult lives? The Opposition say that it is to give out dollops of free money, which will somehow transform people’s life circumstances even if that free money will not be available until they are 18, which might be a decade away for some. It has been the contention of my party since the run-up to the election, and it is now the contention of the coalition Government, that the role of the state is to enable people, for themselves, to achieve while they are at school and then have successful careers in their adult lives, thereby generating surplus funds. That will contribute to the culture of saving far more effectively than any Government incentive. The biggest barrier to someone saving is having an income that enables them to save. The biggest barrier to someone having an income that enables them to save is lack of educational achievement and inability to find a job that transforms their long-term work prospects.

The comprehensive spending review is a package of measures, the main concentration of which is the reduction of expenditure over four years, but that is a net reduction and there are increases within it as well. One of those increases is one of the four main pledges that my party made during the election: the funding of the pupil premium. It is to be funded, as we laid out in the run-up to the election, specifically by the abolition of the child trust fund, which we opposed when the previous Government introduced it and opposed during the general election. That pledge has been carried forward into the coalition agreement.

[Anas Sarwar (Glasgow Central) (Lab)]

It is amazing to listen to the hon. Gentleman: the people of Bristol West voted for a Liberal and ended up with a Tory. Does he not recognise that there is no extra money in the pupil premium, that the Budget was about choices and that the choice that the Liberal Democrats and the Conservatives made is to hammer families, children and parents right across the country?

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[Stephen Williams]

I thank the hon. Gentleman for his intervention, but let me tell him that the people of Bristol West voted for my No. 1 pledge, which I talked about continuously during the general election and which is something I have stood for all my political life: rescuing people from poverty, particularly children from poorer backgrounds. The introduction of the pupil premium will make a significant long-term difference to the life chances of young people in our country. It will be far more effective and make a far greater difference than telling everyone, whatever their circumstances, that when they are 18 they will get some money to spend on their birthday party or some other initiative.

The dogmatic difference between the two sides is that we believe that enabling people to make choices about their lives is far more important than the state saying, “Here is some money to spend at some point in the future.”