Savings Accounts and Health in Pregnancy Grant Bill

Part of Parliament (Amendment) – in the House of Commons at 6:03 pm on 26th October 2010.

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Photo of David Hanson David Hanson Shadow Minister (Treasury) 6:03 pm, 26th October 2010

If the Minister did not know the strength of feeling on the Labour Benches about this Bill before, he does now. It will hit children, women and families unfairly, it will hit the poorest in our society the hardest and it will undo the positive steps that the previous Labour Government took to tackle inequality. I say to him, on behalf of my right hon. and hon. Friends, that it is a bad Bill and that we will oppose it this evening in the Lobby. As he has said, it removes eligibility for child trust funds, abandons the saving gateway and abolishes the health in pregnancy grant, each of which was a progressive measure of the previous Labour Government and was welcomed by groups that tackle inequality. Each of those measures is being jettisoned by the Conservatives and Liberal Democrats not as a matter of deficit reduction but as a matter of dogma. As my right hon. and hon. Friends have said in interventions, there has been no impact assessment. Not content with taking a gamble in the spending review on our jobs and growth, the Government have made choices that are unfair and that will hit the poorest in society the hardest.

Clause 1 concerns child trust funds, which were introduced by the Labour Government for three main reasons: to promote saving, to encourage financial education and to ensure that in future all young people would have a financial asset at the age of 18. The CTF scheme is having a positive effect. Between April 2008 and April 2009, a massive 823,504 CTF vouchers were issued-70,000 a month. More than 74% of those accounts were opened by parents and more than £2 billion is now held in those funds. At the end of this year, there will be 6 million child trust fund accounts for which the Minister will abolish contributions for the future.