Savings Accounts and Health in Pregnancy Grant Bill

My Lords, I thank the Minister for his introduction to this somewhat pick and mix abolition Bill, containing as it does future plans for three quite separate pieces of primary legislation. The Bill, like so much of the cuts programme of this Government, will hit children, women and the poorest families hardest. It is almost as if Nick Clegg and David Cameron, like a pair of playground bullies, said, ““Let's push around those least able to defend themselves””. This Bill will hit the poorest in society hardest and it will undo positive measures introduced by the Labour Government; wholesale and without any consideration of mitigation. As the Minister said, the Bill removes eligibility for child trust funds, abandons the saving gateway and abolishes the health in pregnancy grant—a measure that I was responsible for steering through your Lordships' House at the time we enacted it. All of those acts were progressive measures and we need to be clear that their abolition is in fact a matter of dogma. That this is dogma is borne out by the fact that the Government could not even be bothered to undertake a proper impact assessment on their proposals, from which I take the lesson that they do not really care what the effects will be. I know that we are becoming more and more familiar with broken promises from both parties in this Government, but it is worth noting that the Conservatives are breaking their manifesto commitment, which said: "““We will … cut government contributions to Child trust funds for all but the poorest third of families and families with disabled children””." Another commitment bites the dust. It is true that the Liberal Democrats had in their manifesto an end to the child trust funds. I am not sure why, because there was no explanation. I looked in vain to see whether the funding might be redirected to some other support for the most impoverished and for anything at all about looked-after children. It may be there, but if so it is very well hidden. I looked in vain for anything that suggested that the Liberal Democrats had thought about how to create and nurture the savings habit. The child trust fund is a savings and investment account for children born on or after 1 September 2002. The Bill ends new child trust funds from January 2011, worth £500 to all children over their lifetimes and £1,000 to the poorest children. Children who were due to receive the £250 top-up—£500 for the poorest—on their seventh birthday will not now do so. I hope that the Government intend to write to them all. Last year, the Labour Government announced that they would contribute an extra £100 each year into the accounts of all disabled children, with severely disabled children getting £200 a year. I am bound to remind the House and perhaps the Minister, who was not about during that time, that David Cameron's Conservative Party did not oppose the measure when it was passed earlier this year before the general election. Perhaps that timing has something to do with this particular decision. I do not think that a respite scheme, welcome though it might be, is a substitute for those disabled children. The child trust fund is a hugely successful scheme. In a recent survey by Mum’s Views, polling more than 1,000 current or expectant mothers, a staggering 91 per cent of expectant mothers interviewed had no idea that the Government were planning to replace the much loved child trust fund, and nearly half said that the Government should work harder to keep parents informed. Perhaps more worryingly, 18 per cent of those surveyed claimed that the changes meant that they were less likely to save for their children's future. That is a considerable proportion of the very people that the scheme was designed to reach. Wherever you may sit on the political spectrum, everyone can agree that fostering a long-term savings culture is something that the UK badly needs. I am aware that the Government want to bring forward a junior ISA. However, it will not be ready until the autumn of next year. In the mean time, did the Government consider leaving the child trust fund in place so that families do not fall through the gap in the first half of 2011? Why did they not do so? For children born between January and the introduction of a new scheme, there will be no government-endorsed, universal tax-free scheme into which their parents will be able to save. Contrary to the Government's assurances that the retrospective nature of a replacement scheme will address the issue of a savings black hole, I remain profoundly concerned that, at this incredibly busy and emotional time, when new parents’ minds are far from focused on savings products, the lack of a government-endorsed product will result in a lost generation of children with no savings provision. I turn to the case for looked-after children. As it currently stands, the new junior ISA would rely on voluntary contributions from parents and family members and there would be no provision at all for contributions to an account for looked-after children. The House is not permitted to discuss amendments to this Bill, but I am certain that this issue in particular is one that many noble Lords would have wished to address. I am now, with respect, addressing the Minister on behalf of looked-after children and their champions, notably Action for Children and Barnardo's. Will the Government consider picking up the amendment in the interests of looked-after children, or something like it, that my honourable friend Paul Goggins put down in another place? If not, why not? The Government have had time to reflect on this issue since 22 November, which was the Third Reading in another place, and I hope that they will have taken on board the powerful and compassionate arguments in favour of either maintaining the child trust fund for looked-after children or coming forward with a suitable replacement. My understanding is that Action for Children, Barnardo's and Paul Goggins MP met the Financial Secretary Mark Hoban MP at the Treasury to discuss the proposal and during the Report stage of the Bill in another place, and the Minister agreed that the proposal was worthy of proper consideration. He said: "““I have a lot of sympathy with what he””—" Paul Goggins— "““is trying to achieve, and I want to consider the matter more closely””.—[Official Report, Commons, 22/11/10; col. 78.]" Have the Minister and his colleagues done so? Have they looked at the impact that the abolition of the child trust fund will have on looked-after children? What is the conclusion of their deliberations? Some 6,000 children go into care each year. Over previous years, the Government have opened 33,158 child trust funds for children in foster care, residential care or children who are being looked after by the state. If the Government refuse to allow the child trust fund to continue, what exactly are they, as the corporate parent, going to say to the children who will not have that nest egg at 18? What about the situation of siblings, one of whom may qualify because they went into care last year, and a brother or sister who will not qualify because they go into care in the coming year? What responsibility does the Minister believe the state has in these circumstances, as the corporate parent of some of the most disadvantaged children in society? At the moment we have no details for the implementation of the child ISA, and we do not know what will happen to the most disadvantaged children. We know that there will be a gap, and I invite the Minister to address these important issues before the Bill passes from your Lordships' House. This Bill repeals the legislation providing for the establishment of a saving gateway scheme. As noble Lords will be aware, in 2009 the Saving Gateway Accounts Bill was introduced to pave the way for a national scheme. The purpose of the scheme was to promote a saving habit among working people on lower incomes by providing an incentive to save through a government contribution for each pound saved. We would all agree that savings are important in providing people with independence throughout their lives and security if things go wrong. While we on these Benches disagree with the decision not to establish the saving gateway next year, I would put in a plea to mitigate this decision, in the knowledge that the Conservative Opposition supported this scheme only last year. Would it not make sense to delay the implementation rather than repealing the Act? Will the Minister explain this change in policy to the House? Do this Government now not want to encourage low-income people to save, or was this yet another casualty of the coalition agreement—and, if so, which part of it exactly? The last part of the Bill removes the entitlement to the health in pregnancy grant when a woman reaches the 25th week of her pregnancy. I regard this as a health issue, not a money matter, and I would have much preferred the kind of well informed debate that the House had when we established that grant. The health in pregnancy grant is a one-off tax repayment of £190 from HMRC for mothers-to-be who are at least 25 weeks pregnant to help them prepare for the birth of their baby. The payment is not means-tested and does not depend on national insurance contributions. It is estimated that there are around 750,000 qualifying pregnancies each year, based on the national statistics projections for birth. I am very sad that the Government have decided to remove this grant. It can make a crucial difference at a time when family finances become tight. It may not be a significant amount to the Minister but £190 is a substantial amount to a low-income family and, whatever the grant’s imperfections, it must be a matter of enormous regret that the Government propose to reduce the investment in women as they conceive, bear and give birth to children. I invite the House to join me and these Benches in regretting anything that has a detrimental impact on maternal health and well-being. We know that women need to approach giving birth in a calm and confident frame of mind. We also know that very low-income families can and do run out of money for food from time to time, so this grant can be, could be and is of enormous importance. The Royal College of Midwives said that it was, "““disappointed at the decision to abolish the Health in Pregnancy Grant, which, apart from providing pregnant women with much needed financial support, provided an opportunity for midwives to communicate health advice to women and their families””." As we are quoting the National Childbirth Trust, its chief executive said: "““At a time when families are trying to make ends meet, the Coalition Government has hit parents particularly hard. Cutting pregnancy and maternity grants, as well as child benefit and tax credits, will make it even more difficult for new parents or those wanting to start a family. We’re worried that parents, and parents-to-be, have been singled out unfairly, and that the Government should stick to its commitment to making the UK more family friendly””." When this legislation was introduced in your Lordships’ House, many noble Lords who come from a medical background and are knowledgeable about pregnancy and childbirth were very much in support of this grant. Indeed, the noble Lord, Lord Patel, and my noble friend Lord Winston have spoken to me about this and I am very grateful for their wise counsel on this matter. My noble friend Lord Winston is unable to be here today, so I shall reflect his views, as they were expressed to me, to the House. He pointed out to me that there is growing evidence that health and the feeling of well-being are not only important for pregnant women but for their offspring. The modern field of epigenetics suggests that environmental influences on the pregnant mother may alter the way that the DNA of her child functions and that this may have long-term consequences on the health of the baby, even as an adult. The epigenetic effects are likely to be heritable: that is to say, not only the baby to be born but his or her offspring may suffer from the inherited deleterious effects from the circumstances of their grandmother’s, or even their great grandmother’s, pregnancy. My noble friend Lord Winston provided me with five examples of research from Australia, New York, Canada, Southampton and Imperial in the UK, which I am more than happy to make available to the Minister. I am not claiming more for this grant than that it is a contributing factor to the well-being of the pregnant mother and that the Government should have a better justification for its abolition than simply money-saving. I thought that one of the most powerful arguments for this grant was the fact that it is not given unless the mother has attended an interview with a medical professional, a health visitor or a midwife, and discussed her pregnancy, care and diet. There are some women—I am thinking particularly of very young, vulnerable or teenage women—for whom this visit may be their first contact with a health professional. The grant has two benefits: first, it provides a lump sum to assist a pregnant woman with either diet or something else that she might need towards the end of her pregnancy; and, secondly, it helps to ensure that she is in the system and stands a better chance of receiving care and support throughout the rest of her pregnancy and the birth of her baby. Would the Minister care to address the issues of the benefit that pregnant women receive from this grant and how the Government intend to replace it—if not, why not?—and of how the Government intend to address the issue of women who receive extra support as a result of this grant? I very much look forward to this Second Reading debate and to the Minister’s response to the questions that I have raised and that other noble Lords will raise during the course of the debate.