Savings Accounts and Health in Pregnancy Grant Bill

Toby Perkins Excerpts

Tuesday 26th October 2010 Commons Chamber

[Mr Hoban]

I am turning to child trust funds, and I take on board the right hon. Gentleman’s point. As one of the consequences of our decision to scrap the child trust fund, we are using some of the money that we have saved to provide respite care for disabled children. We have thought carefully about the issues, and, frankly, the decisions are not easy to take. Our decision to scrap the child trust fund is important. It will enable us to deliver the pupil premium and the £2.5 billion package, which was recently announced, to support children from disadvantaged backgrounds. The right hon. Gentleman should look at the issue in the round rather than cherry-picking particular policy areas.

[Toby Perkins (Chesterfield) (Lab)]

Will the Minister give way?

[Mr Hoban]

No; I will continue. I have given way quite a lot, and I want to make some progress. This is an important Bill, which is why I want to ensure that I have given Opposition Members the opportunity to intervene, but I want to continue setting out the case for why we need to take these measures to tackle the problem that the previous Government left behind.

We announced in May that Government payments to child trust funds would be cut in two stages—they will be reduced first and then stopped altogether. In July, we made regulations to take the first step. For those born from August this year, payments at birth were reduced from £250 to £50, or from £500 to £100 for children in lower-income families or children in care. Government payments at the age of seven also stopped completely from August. The regulations will end the additional payments made to disabled children from 2011-12 onwards, although, as I have said, we will recycle the money that we have saved on those payments to provide additional respite breaks.

Those regulations could not end eligibility for child trust funds altogether, because that process requires primary legislation. This Bill completes the process by ending eligibility for child trust funds for all children born from January 2011 onwards, which means that the remaining Government payments will stop altogether.

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[Mr Hoban]

As I have set out, the previous Government left us with no choice but to axe those schemes, because we had to save £80 billion in public spending to get spending back on track and keep the deficit under control and interest rates as low as possible for as long as possible. That was the Government’s priority.

[Toby Perkins]

Will the Minister give way?

[Mr Hoban]

I will not, because I want to continue making progress.

We want to provide people with a clear and simple way of saving for their children, while saving the £500 million a year that we currently spend on child trust funds.

The savings from the child trust fund, the saving gateway and the health in pregnancy grant will allow us to prioritise the limited resources that we have. As the Chancellor set out last week, we have chosen our priorities as we tackle the deficit that we inherited. We are delivering on our commitment that health spending will increase in real terms in each year of this Parliament. We are prioritising long-term growth, creating the conditions for a private sector-led recovery. We are also radically reforming public services to build the big society where everyone plays their part.

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[Mr Hanson]

I shall come to that point later. The Government have chosen to take a sledgehammer to the funds and not even to consider other options such as that mentioned by my hon. Friend.

[Toby Perkins]

My right hon. Friend is touching on the choices that the Government have made. The number of attacks that they have made on children, families and women is revealing. They seem willing to give money to married couples who do not have children but they are taking money from families with children. Anyone who has been married and had kids knows that it is not getting married that costs money but having kids. When my son was four months old I thought that he was robbing my wallet because I had no money left. Does not the Government’s approach show how out of touch they are with the real lives of families and children?

[Mr Hanson]

I agree. The Government are not in touch with the difficulties of raising a child or of meeting the costs when children reach the age of 18.

The child trust fund is worth £500 to each child over their lifetime, but it is worth £1,000 to the poorest children. The Minister will know that the previous Labour Government also introduced a disability living allowance payment on top of £100 or £200 for those entitled to DLA. That measure was introduced to take into account the significant extra challenges that disabled people face at that important time in their lives. When that measure passed through Parliament earlier this year, under the previous Labour Government, the Conservative party did not oppose that addition. Indeed, the present Financial Secretary said that

“we recognise that additional support is required for children with disabilities, and we have no objections to this statutory instrument.”—[Official Report, Eighth Delegated Legislation Committee, 10 February 2010; c. 4.]

The Liberal Democrats’ spokesperson at the time said they were happy to support the regulations. Quite simply, the Government say one thing in opposition and another in government.

As young people reach 18, the financial challenges—not least those imposed on them by the current Government—will be more difficult. If individuals do not come from a wealthy background, the prospect of stumping up extra money for tuition fees is an eye-watering one. Not everyone will have a trust fund of their own to manage those resources. The children’s trust fund would have provided young people with an extremely welcome lump sum, would have helped people with education and training from the age of 18, and would have helped people to save who had never saved before to supplement their future income.

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[Mr Hanson]

I hope I can assure my right hon. Friend that as we have eight sittings in Committee, I will table amendments on some of those issues. Indeed, I can even offer him a chance to serve, should he so wish, on the Public Bill Committee in due course.

[Toby Perkins]

Teenage pregnancy levels are high in some of our most deprived communities, and the child trust fund at least offered 18-year-olds who were about to have children the chance to take a different track or to receive some support. Does my right hon. Friend agree that the Bill will take away a key tool in the battle against child poverty?

[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.

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[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Over the past few days, weeks and months, there has been a lot of talk about “fairness”, which is an easy word to use. Who is the judge of what is fair? Whose standards of fairness are being applied? Many believe that the measure of a civilised society is how it treats its weakest members. If so, the Bill clearly fails the fairness test, because it lets down families and leaves our children to take the strain.

When the Prime Minister spoke about “mending our broken society”, he did not say that he would go around breaking it first.

“I want the next Government to be the most family friendly Government we’ve ever had in this country”.

It was a broken promise, one of many, with more to come. Then we have the Chancellor’s hollow promise of fairness:

“A fair Government make sure that those with the broadest shoulders bear the greatest burden.”—[Official Report, 20 October 2010; Vol. 516, c. 955.]

Today we see the Liberal Democrat and Conservative idea of fairness.

Anyone who has young children running around knows how expensive bringing up a family can be. As we are discussing the removal of a grant of £190 to encourage health in pregnancy, I want to talk about how expensive simply being pregnant can be. There seems to have been a lot of debate and misunderstanding about the value of the grant. My hon. Friend the Member for Walsall South (Valerie Vaz) made good points about the physical nourishment required by a pregnant woman, especially in the later stages of pregnancy. On a physical level, however, a pregnant woman needs clothes to go to work, shoes for her swollen feet, vitamin supplements—I craved fresh fruit salad. I know mothers who have suffered from chronic back pain and chronic pelvic pain. They have struggled to sleep because the later stages of pregnancy are so uncomfortable. All those conditions can be helped by customised cushions, back supports and other aids, none of which is available on the national health service, all of which must be purchased, and all of which I was fortunate enough to be able to purchase, although many on lower incomes would not be able to. The health in pregnancy grant was designed to ease the final stages of pregnancy, and to ensure that a child is not born to a broken mother.

All that arises before we consider the huge impact of the link between the health visitor, the midwife and the pregnant woman that is currently required for the grant to be obtained. The financial pressures during pregnancy are difficult for all women, but teenage mothers suffer a particular burden. The Institute of Education has found that they suffer a lifelong financial disadvantage, with a lifetime family income £12,000 lower—or an annual income 2% lower—than the family incomes of those who become pregnant in their mid-20s.

[Toby Perkins]

Will my hon. Friend give way?

[Catherine McKinnell]

Am I the last speaker?

[Catherine McKinnell]

In that case, I will give way.

[Toby Perkins]

My hon. Friend is making a compelling case. Does she agree that, whatever we may have thought about the upper-class buffoons whom we may have considered to constitute the Conservative party, they always seemed to have a sense of gallantry? When they said “Women and children first”, it was supposed to be a good thing. Nowadays, however, when they say “Women and children first”, they mean that women and children should be in the front line, facing a battering from the cuts. It is women and children first who are losing the benefits, it is women and children first who are losing the payments, and, most of all, it is women and children first who are paying the costs for these upper-class buffoons.

[Catherine McKinnell]

My hon. Friend ably makes a point that I was about to make myself. Families are being asked to bear the brunt of the mistakes made by bankers. The Government plan to take £190 away from the pregnant mothers who need it most. I believe that that constitutes a shameful attack on the most vulnerable and needy in our society. The Government tell us that the banking levy would bring in £2.4 billion, but my hon. Friend the Member for Walsall South set out the economic case—the “you do the maths” case—very clearly.

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[The Economic Secretary to the Treasury (Justine Greening)]

As we have heard, this has been a vigorous debate and I am very grateful to all the Members who have contributed. The discussion has been wide-ranging and I want to start by addressing some of the wider arguments that have been made before moving on to some of the more detailed points about measures in the Bill. I shall try to cover all the speeches, although they were numerous.

My hon. Friend the Financial Secretary set out at the start of the debate the rationale behind the Bill and the role that it will play in our plan—a clear and credible plan—to reduce our budget deficit. Some Members have argued today that our plans move too fast, but our deficit is unprecedented and unsustainable so we must take action to tackle it. That action is supported across the world. Only today, Standard and Poor’s, the credit rating agency, stated that the coalition parties

“have shown a high degree of cohesion in putting the U.K.’s public finances onto what we view to be a more sustainable footing”.

It is simply untenable for Labour Members to spend yet another debate, yet another afternoon and yet more hours in refusenik mode arguing about what they do not like, while setting out no plans for what they would do instead.

We are spending £43 billion this year—£120 million a day—on the debt that the Government have inherited. The Labour party wants to airbrush that amount out of our financial worries, but that is simply not possible. Failing to act now would risk higher interest rates, higher mortgage rates, higher rates of business failure and higher unemployment. The Labour party knows all about higher unemployment, having again left unemployment higher when it left office than when it came in.

[Toby Perkins]

The Minister just said that higher employment is something that the Labour party knows all about. I do not know whether she is aware that unemployment was up near the 4 million mark under a Conservative Government. What does she consider to be a successful level of unemployment this time?

[Justine Greening]

The hon. Member for Edinburgh East (Sheila Gilmore) talked about judging Governments based on what they do. The previous Labour Government left unemployment around 400,000 higher when they left office than when they came in. I do not know what the hon. Member for Chesterfield (Toby Perkins) has to say to those people who were unemployed when the previous Government left office, but those people must be very pleased that the Labour Government are no longer in office taking bad decisions.

Today Labour Members have discussed fairness, but there is nothing fair about failing to tackle the deficit. They have discussed it being unfair to end eligibility for the child trust fund, but there is nothing fair about asking future generations to pay our debts, which is simply unacceptable. It was the ultimate irony to spend the afternoon listening to Labour Members discussing the value of saving, when the Labour Government left office with our savings ratio at an all-time low, as we have heard. A savings culture was nowhere to be seen in the Labour Government. If they had demonstrated a little bit more of that culture themselves, the rest of the country might have followed suit.