Savings Accounts and Health in Pregnancy Grant Bill

I am sure that it suits Labour Members to talk about the past, but we want to talk about sorting out the future. The hon. Lady has mentioned interest rates, but surely she accepts that the biggest risk to interest rates is not tackling our fiscal deficit, and this Bill is part of our plan to do that. The former Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), said, ““There's no money left.”” For once, he was right. The changes that we are making to child trust funds, the decision not to introduce the saving gateway and the abolition of the health in pregnancy grant will save us £370 million in this financial year, around £700 million next year and around £800 million each year from then on. That money can be used to reduce the deficit or to fund our country's priorities today. We could not afford to spend £500 million of that money on the child trust fund, where it would have been locked up for 18 years. We want to help disadvantaged children now, which is when they need our help, and it was simply wrong to defer that help for 18 years. We could not afford to introduce the saving gateway in July this year, at the point when we needed to start reducing the deficit, and we could not afford to continue spending £150 million on the health in pregnancy grant to every pregnant woman, whatever their income, whatever their need and however they wanted to spend it. Those policies were simply unaffordable given the fiscal challenge that we face, so we needed to take action. I want to address some of the issues that hon. Members have raised, but let me first touch on child trust funds. A number of Opposition Members seem to be under the impression that people will no longer be able to pay into their children's trust funds, but that is not correct: people will be able to continue saving on behalf of their children. As my hon. Friend the Financial Secretary said earlier, we will introduce a new account allowing parents a clear and simple option to save for their children, while saving more than half a billion pounds from child trust funds. In the same way, we will not continue to pay the untargeted, unfocused health in pregnancy grant, but we will continue the Healthy Start scheme, which is targeted at those who need it most and which ensures that people spend their vouchers on milk, fresh fruit, vegetables and vitamins. Let me briefly cover some of the points that have been made. The hon. Member for Walthamstow (Stella Creasy) talked about the need to maintain policies to ensure that parents can still save on behalf of their children and pass an asset to them when they reach the age of 18. First, child trust funds that are already open will still be a vehicle that parents can use to save. Only today, my hon. Friend the Financial Secretary launched details of a new tax-free savings account for children. The hon. Lady mentioned the Children's Mutual society, which very much welcomes the announcement that we have made today. It says:"““we absolutely welcome any product that promotes””" the idea of saving efficiently on behalf of children. I hope that she will welcome what it says about our plans. So we will continue to help parents and children to save and I simply do not accept the accusation that the new accounts will be of no use to people on lower incomes. The aim of the accounts is to provide people with a clear, simple way of saving for their children and we want to ensure that they will be accessible to people on lower incomes. The accounts will also allow savings to be locked up until children reach adulthood, so this is not about giving wealthy families a tax break. The important issue of looked-after children has been raised. The details of any new tax-free account that is launched have yet to be agreed, and, as I said in the Westminster Hall debate last week, I am open to suggestions from hon. Members and others about how we can ensure that local authorities with parental responsibilities for looked-after children play their role in contributing in this area. I congratulate the hon. Member for Erith and Thamesmead (Teresa Pearce) on her imminent grandchild and I assure her that a child born today will still be eligible for the child trust fund. Her daughter will have got the health in pregnancy grant and if this is her first child she will be eligible for something that has not been mentioned today—the Sure Start maternity grant. I hope that I have dealt with the specific points that have been raised and I conclude by returning to the wider point of the Bill. If we had carried on with these policies, our plans for reducing the deficit would have meant finding £3 billion of extra spending cuts elsewhere. Instead, these actions, alongside other difficult decisions, enable us to protect critical areas such as health, spending on schools, tackling the welfare state that currently traps people in poverty, laying the foundations for growth in our economy and creating more of the jobs that will ultimately help us to get the economy back on track. I commend the Bill to the House. Question put, That the Bill be now read a Second time. The House divided: Ayes 318, Noes 224.