Clause 3 — Removal of entitlement to health in pregnancy grant

Savings Accounts and Health in Pregnancy Grant Bill – in the House of Commons at 7:45 pm on 22nd November 2010.

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Photo of Lindsay Hoyle Lindsay Hoyle Deputy Speaker and Chairman of Ways and Means, Chair, Panel of Chairs, Chairman of Ways and Means, Chair, Panel of Chairs

With this it will be convenient to discuss the following:

Amendment 42, page 2, leave out lines 26 and 27 and insert-

'(2) The Treasury will conduct a review of the health in pregnancy grant, to be concluded by 1 January 2012, which will consider, inter alia, the case for-

(a) the health in pregnancy grant to be retained in its current form;

(b) the health in pregnancy grant to be means-tested or in other ways targeted towards those most in need; and

(c) the health in pregnancy grant to be replaced by a system of vouchers."'.

Amendment 44, page 2, line 27, leave out '2011' and insert '2014'.

Amendment 43, page 2, leave out lines 31 and 32 and insert-

'(2) The Treasury will conduct a review of the health in pregnancy grant, to be concluded by 1 January 2012, which will consider, inter alia, the case for-

(a) the health in pregnancy grant to be retained in its current form;

(b) the health in pregnancy grant to be means-tested or in other ways targeted towards those most in need; and

(c) the health in pregnancy grant to be replaced by a system of vouchers."'.

Amendment 45, page 2, line 32, leave out '2011' and insert '2014'.

Amendment 34, page 3, line 1, Clause 4, leave out 'Sections' and insert 'Section'.

Amendment 30, page 3, line 1, leave out from '1992)' to 'extend' in line 2.

Amendment 35, page 3, line 4, leave out 'Sections' and insert 'Section'.

Amendment 33, page 3, line 5, leave out from '1992)' to 'extend' in line 6.

Amendment 38, line 2 leave out from '2009;' to 'and' in line 3.

Photo of Kerry McCarthy Kerry McCarthy Shadow Minister (Treasury)

I am sorry for not notifying you in advance, Mr Deputy Speaker, that my right hon. Friend Mr Hanson and I would be job sharing on Report.

We had a reasonably comprehensive debate in Committee on clause 3, which deals with the abolition of the health in pregnancy grant, although not as comprehensive as we would have liked. The Minister did not provide as much explanation as we would have liked on why he and his Government colleagues felt compelled to rush into axing the grant without sufficient evidence that it is not achieving the purposes for which it was intended. Amendment 3 would therefore delete clause 3, the grant would continue and we would have more time to assess whether it improves maternal health and nutrition, and the health of the unborn child and the child once it is born, and whether it achieves the important aim of getting expectant women to access professional advice during pregnancy.

I do not have time to rehearse in full the arguments in favour of such intervention during pregnancy. In Committee, we heard compelling evidence from witnesses of the health benefits for mother and child of tackling poor nutrition. We heard statistics about how many parents worry about not having enough money to feed their families and how many people on low incomes do not have enough money to provide healthy nutritional food. That can be seen in research carried out by organisations such as the Joseph Rowntree Foundation on what sort of household income would be sufficient to provide a healthy diet. Witnesses also told us of the importance of the grant as a nudge towards changing behaviour-the Prime Minister has been a keen advocate of such nudges in the past. By giving the grant and, in particular, by making the payment conditional on accessing advice on nutrition during pregnancy, we have encouraged expectant mothers who perhaps were not completely au fait with nutritional issues to start thinking about them, to access advice on health during pregnancy and to start on the road towards changing their patterns of behaviour. The scheme was in place for only a couple of years, so there was nowhere near enough time to assess its impact, but we heard evidence that it could help break generational cycles of poor nutrition, poor health, birth defects or even mortality during childbirth.

We heard other evidence about whether intervening earlier and paying the grant at 12 weeks rather than at 25 weeks would be a better approach, but we have not tabled amendments to that effect because we debated it extensively in Committee. I know that the Minister will probably say that there is little or no evidence that the scheme has done what it set out to do-the Government have also argued that in respect of the child trust fund and the saving gateway pilots. The simple answer to that is that the Government do not have any evidence that it does not work, because they simply have not given it time to roll out. The Conservative party element of the Government went into the general election seemingly happy that the health in pregnancy grant would continue. I concede that the Liberal Democrats are honouring their election commitment to scrap the grant and so are being consistent-they are wrong, but for once they are being consistent.

I shall now deal with the more detailed amendments tabled by the Labour Front-Bench team. Amendment 42 calls for a year's moratorium on the abolition of the grant while a full review of its benefits is carried out. Such a review would consider the advantages and disadvantages of retaining it in its current form; of means-testing it or otherwise targeting it towards those who are deemed to be most in need and who would benefit the most; or of replacing it with a system of vouchers.

I stress that our preferred option is retaining the grant in its current form, but throughout the Bill's progress through the House and in Committee two main criticisms have been made by the opponents of the grant. The first is that, as a universal benefit, it goes to those who do not need it and the money could be better spent on those who do. The second is that, because it is given as a direct payment with no restrictions on how it should be spent, it could be spent on frivolities. That is said despite the evidence we heard from child poverty groups, not only in this instance, but in general throughout the debate on child poverty. They suggest that the vast majority of women trying to get by on very limited incomes will spend any modest additional resources wisely and well, doing so for the benefit of their child or, as in this case, their unborn child. Some said on Second Reading that women could not be trusted, which is why we included as an option for the review consideration of whether a voucher scheme would be a better use of money.

Amendment 46 also calls for a moratorium, although it does not propose a time scale, while the Treasury-assisted, I would imagine, by the Department of Health or the Department for Education-conducts a review of current provisions for expectant and new mothers. That would include looking at other options on the table; it would consider not just the health in pregnancy grant, but the way in which it overlaps and interlinks with the Healthy Start scheme and the Sure Start maternity scheme, which is also being rolled back. That would give us the opportunity to examine whether those schemes are a more effective way of achieving what the health in pregnancy grant was designed to achieve.

Amendment 44 suggests postponing the abolition of the grant until 2014 and is, thus, self-explanatory. That would give more time for a proper assessment to be carried out on the experience of and health outcomes for people who have received the grant, and, more importantly, had access to the advice on maternal health which has accompanied the money.

That leads me to the last of the amendments tabled by those of us on the Opposition Front Bench. Amendment 49 calls again for a one-year moratorium during which the Government will consider how we can ensure that more women have access-

Photo of Lindsay Hoyle Lindsay Hoyle Deputy Speaker and Chairman of Ways and Means, Chair, Panel of Chairs, Chairman of Ways and Means, Chair, Panel of Chairs 8:15 pm, 22nd November 2010

Order. May I suggest that we stick to the amendments that are selected for discussion now? Amendment 49 is not on the selection list and nor are some of the other amendments. If we could stick to the list, I would be very grateful.

Photo of Kerry McCarthy Kerry McCarthy Shadow Minister (Treasury)

Sorry, Mr Deputy Speaker. I assumed that they had all been grouped together.

Let me make a general point that links back to amendment 3 and the need to retain the grant. This is not just a matter of putting the £190 into people's pockets so that they can spend it either on improving their diets during pregnancy or on items that they might need when the child is born. We need to bring people in so that they access professional health advice at the 25th week of pregnancy or, as we have debated, earlier in pregnancy. That is really important and there is nothing to replace it. The Government seem to have no suggestion on how to bring people in through the door and ensure that we increase the number of women who access such advice if the health in pregnancy grant is not used as a trigger mechanism. If the Government will not accept amendment 3 or any of the other amendments that call for more time and a review of how the grant works, will the Minister at least tell us how we can ensure that more women access professional advice on their health and the health of their unborn child during pregnancy? The grant was designed to tackle a serious issue and it is being abolished in its early stages. It is a shame to abandon the project at this stage.

Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys

Thank you, Mr Deputy Speaker, for giving me the opportunity to speak about the health in pregnancy grant, which of the three items covered by the Bill caused the most consternation in Committee and on the Opposition Benches. It certainly appeared to cause confusion in the Opposition's arguments.

I noted even today that there has been a slow, gradual erosion in the totalitarian position taken early on by the Opposition that the health in pregnancy grant was the most wonderful thing imaginable and could not possibly be trampled on. There has been a gradual slip back and quite a few Opposition Members have claimed that the grant was somehow misnamed and that, had they only called it something different, it would have all been all right. I must take them back to what the previous Prime Minister said when the grant was introduced. He said that he had received "powerful representations" about the

"importance of a healthy diet in the final weeks of pregnancy".

He was very specific. He said the "final weeks of pregnancy"-not early in pregnancy, halfway through, in the 12th week, in the first week, or in the 25th week. The grant was well named, because it did precisely what the previous Prime Minister intended it to do.

The debate is not about the benefits of maternal nutrition, either. Everybody in the House agrees about the importance of proper maternal nutrition, but, clearly, we are divided on how that is best achieved. The Government do not believe that the health in pregnancy grant is the way to do it.

The debate is certainly not about timing. We have a range of alternatives: the Healthy Start vouchers; the maternity grant; and the Sure Start facilities. The shadow Minister, Kerry McCarthy focused in particular on access to health care advice. I entirely agree with her about that, but she cannot avoid the fact that the Healthy Start vouchers are linked to attendance with a midwife.

Furthermore, the idea of the health in pregnancy grant was to provide access to health visitors, but one of the previous Government's innovations of which I wholeheartedly approve and wish to build on is the family nurse partnership schemes that operate in about 50 different councils. They specifically offer the access to advice for the most vulnerable that the hon. Lady was talking about. I simply do not understand her obsession with the health in pregnancy grant as the sole mechanism through which we can access advice. There are already multiple pathways to that advice-pathways that are more successful. I even think that there is a family nurse partnership in Bristol. Such schemes target the most vulnerable in society from the moment of conception until well past birth. It is far more expensive, I accept, but that is because it is a targeted intervention.

I do not accept the hon. Lady's argument that we need to retain the health in pregnancy grant because it gives access to health advice. It is not the sole pathway for that.

Photo of Kerry McCarthy Kerry McCarthy Shadow Minister (Treasury)

The hon. Gentleman mentioned the family intervention project and he is right that it does some valuable work-including some valuable work in Bristol. Does he have any idea how many families receive that advice and how many have been brought within the scheme compared with how many people would have received advice through the health in pregnancy grant?

Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys

It is actually called the family nurse partnership, but I assume that we are talking about the same thing. I know that in Blackpool it has worked with about 200 families in the past year. The numbers are clearly far fewer than those who could access the health in pregnancy grant, but once again the hon. Lady is returning to the debate that we have had over and over again about the universal versus the targeted.

Photo of Daniel Poulter Daniel Poulter Conservative, Central Suffolk and North Ipswich

Does my hon. Friend agree that the difference with schemes such as the one in Bristol that he and Kerry McCarthy mentioned is that they can show tangible results, whereas the health in pregnancy grant can show no tangible results of how it has been beneficial?

Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys

I agree entirely. That is a very fair point. It was never clear whether the Opposition believed in universality or targeting. It seemed to depend on which amendment they happened to be pressing at any moment in time. It was part of the incoherent approach that they seemed to have to the debate.

The previous Government never tackled the issue of how it took up to eight weeks merely to process a health in pregnancy grant claim. The money often came through not in the 25th week but in the 33rd week-well beyond the time at which there was any hope of achieving real dietary change.

I specifically tackled the hon. Member for Bristol East on the issue of usefulness versus effectiveness. When she said in Committee that this was a useful grant, I asked her how she defined useful. She mentioned access, which I have dealt with, but never really dealt with the issue of effectiveness. That was my concern with the Opposition's argument. At no point did they try properly to evaluate how effective the scheme was. I know that many amendments were tabled asking for such an evaluation, but all along the Opposition's rhetoric was to use the word "useful" rather than "effective". At no time did they argue that the scheme was effective, so we were left with not very much more than the shadow Minister trying to argue that it was nice to hand out other people's money to other people. It might well be, but that is not a firm or solid foundation on which to build a health in pregnancy grant.

I support the abolition of the grant for the simple reason that we have a number of alternative mechanisms to support families who need assistance during pregnancy. The grant was not paid out at the right time in pregnancy, in my view, and I do not believe that it has achieved its goal. I do not believe that we would even be able to provide the evidence if that were the case. I wholly support the Government in what they are trying to do.

Photo of Kate Green Kate Green Labour, Stretford and Urmston

I am very sad that the Government have brought forward proposals to cancel the health in pregnancy grant. We have heard this evening and during the Bill's earlier stages a number of criticisms of its structure. We have heard that it is paid at the wrong time-too late to have a significant impact on maternal nutrition and well-being-and that the money could have made more difference, even pre-conception, to low-income women of child-bearing age. We have heard that it misses the point and that women fritter it away on shoes and going to the spa. That might be true of a minority, but for many others the grant makes a crucial difference at a time when family finances become tight.

The Opposition have been asked whether we are not confused about wanting the grant to be universal or targeted at low-income and more vulnerable women. We are not confused. We are clear that we want a universal grant for all the reasons that we believe in universality: it is more effective at reaching the most disadvantaged, more cost-effective, simpler to administer and easier to know when one is entitled to claim. We accept, however, that if we have to settle for a reduction in spending on pregnant women then, for a time at least, a targeted payment would have enabled us to keep the structure of the grant until it became affordable to offer it again on a universal basis.

We have also heard that the grant is not enough money and that £190 could not make much difference to a family budget. I assure hon. Members that £190 is a substantial sum to low-income households, particularly at a time when both parents might be facing the additional costs of a new arrival and when household income might dip as the woman takes time out of work to care for the newborn child. Whatever the grant's imperfections, it is a matter of enormous regret that the Government propose to reduce our investment in women as they conceive, bear and give birth to children. I very much regret anything that could have a detrimental impact on maternal health and well-being.

We are very well aware of the effects of good maternal diet on the birth of healthy babies. Low-birthweight babies suffer particularly poor long-term outcomes in health and education and there is considerable evidence that poor maternal nutrition affects babies' pre-birth development, including brain development. It is therefore very important to take every step we can as early as we can to improve maternal nutrition and therefore the chances of children being born healthy. My hon. Friend Kerry McCarthy has already mentioned that the grant, which is linked to nutritional objectives, has enabled us to begin developing healthier eating habits in new mothers that would continue right through until after their child's birth and on into family eating habits. We received evidence on that from a number of expert witnesses in Committee. We in Opposition are keen to sustain that long-term, albeit somewhat intangible, benefit.

Most importantly, the grant delivers more money to families and helps to relieve pressure on family budgets at a time when extra expenditure will be incurred. If it is not spent directly on food and nutrition, at least it frees up the family budget by meeting the cost of other, perhaps lumpy, items that parents incur as a new baby is expected, so there is less worry about the pressure on household budgets to meet day-to-day outgoings at that time. That is important in reducing the level of stress and mental distress that is felt by pregnant women if they are worried about money as they await the birth of their baby. It is particularly important that women prepare for birth in a calm and confident frame of mind. We know that women run out of money to pay for food if they are trying to manage in the late stages of pregnancy on a low income. We should seek to hold on to anything that can help to compensate for that fear and help them to be confident that they can make ends meet, so I very much regret this retrograde step.

Throwing the baby out with the bathwater is not desirable or necessary and that is what the Opposition's amendments seek to highlight. We want to take time to reflect on what in the grant has been successful and needs to be built on. If the grant is not the right mechanism, I challenge the Minister to tell us what he will offer instead to improve the well-being of pregnant women and the prospect of kids being born healthy. The health in pregnancy grant is, as the Zacchaeus 2000 Trust has said, not enough but a step in the right direction. I very much regret that we are seeing a step backwards-a step in the wrong direction-from the Government.

Photo of Fiona Bruce Fiona Bruce Conservative, Congleton 8:30 pm, 22nd November 2010

I support the abolition of the health in pregnancy grant, not least because £150 million a year could simply be better spent on improving the life chances of our younger generation-for example, by reducing the deficit and the burden that they would otherwise bear as a result for years to come. The grant is poorly focused, poorly targeted and poorly timed. It is poorly focused because it simply does not have to be spent on nutritious food or on the health and well-being of the mother or child, as was originally intended. As Dr Callan of the Centre for Social Justice said in evidence:

"There was absolutely no guarantee that the grant would be spent on nutritious food." --[ Official Report, Savings Accounts and Health in Pregnancy Grant Public Bill Committee, 4 November 2010; c. 116, Q279.]

Indeed, the Committee heard evidence to the contrary, as has tonight been confirmed by a Labour Member.

The grant is poorly targeted because it is paid to the better-off and not just those who really need extra financial help in pregnancy. I find that quite offensive, as someone who-along with many of, if not all, my colleagues on this side of the House-shares a real desire to improve the life chances of the less well-off.

Photo of Sheila Gilmore Sheila Gilmore Labour, Edinburgh East

On that basis, if the hon. Lady feels so strongly about it, why has she not advocated that the grant should be retained but restricted to the groups that she feels need it most? I am not saying that that is my point of view, but I was not aware that she or her colleagues were proposing it.

Photo of Fiona Bruce Fiona Bruce Conservative, Congleton

The hon. Lady makes a valid point: we are continuing the Sure Start maternity grant and the healthy start vouchers because their benefit is that they really hit their target, which is some half a million mothers in difficult circumstances who obtain vouchers from the 10th week of pregnancy to buy vegetables, vitamins, fruit and other healthy foods.

Photo of Kate Green Kate Green Labour, Stretford and Urmston

Does the hon. Lady not also accept that those women will at the same time suffer a loss of £190 that would also help them with those good outcomes? What steps would she take to ensure that those women were protected and did not find that they had less overall than they had before?

Photo of Fiona Bruce Fiona Bruce Conservative, Congleton

I thank the hon. Lady for that intervention. I made the point at the start of my speech that unless we look at the bigger picture and reduce the deficit that the country is bearing, the generation that those mothers are now bringing up will have to bear the burden of interest on interest for years to come, and their life chances will be far lower than £190 could compensate for.

The healthy start vouchers were described in evidence by Belinda Phipps of the National Childbirth Trust as

"a really good scheme... It has been put together well and people can get a broad range of healthy foods for the vouchers."

The health in pregnancy grant is poorly timed. Belinda Phipps said in evidence:

"If you are setting out primarily to improve the... health of the baby" the payment of the health in pregnancy grant

"needs to be earlier. If you... really want to change the future of the baby, it needs to be as early as possible." --[ Official Report, Savings Accounts and Health in Pregnancy Grant Public Bill Committee, 4 November 2010; c. 79-89, Q205-224.]

The 25th week is simply too late.

Although there is no doubt that the grant does some good for a number of families, that certainly does not justify the expenditure of £150 million per annum. Indeed, it is a rich irony that, throughout the evening, Labour Members have been exhorting sound financial management, yet now, in the same debate, persist in pursuing what is an example of a seriously ineffective use of public funds-precious public funds of £150 million a year.

Photo of Daniel Poulter Daniel Poulter Conservative, Central Suffolk and North Ipswich

We have heard a lot this evening about universal benefits and the need for targeting. I think that we all agree that having a grant that would allow us to give every pregnant woman £190 sounds, in principle, like a good idea, but clinical practice-for me, as an obstetrician-and what we have heard from many colleagues tonight indicates that there is no firm basis or grounding to support a grant of that nature.

Photo of Mike Weatherley Mike Weatherley Conservative, Hove

Given my hon. Friend's experience, does he agree that some of that money would be better targeted on front-line services, especially midwives in areas such as my constituency where there is a shortage?

Photo of Daniel Poulter Daniel Poulter Conservative, Central Suffolk and North Ipswich

I thank my hon. Friend for his comments. He makes the point that I shall develop a little later. If we want to make a real difference to pregnant women, the resources must be given to the front line. I had the experience of working at Brighton hospital for a considerable number of months. There was a great shortage of midwives at my hon. Friend's local hospital.

Photo of Daniel Poulter Daniel Poulter Conservative, Central Suffolk and North Ipswich

No, I will not.

The pregnancy grant would be much better directed if it was used to improve care at the time of delivery, when we know that maternity care matters most in reducing the number of foetal deaths and in reducing poor outcomes in pregnancy and delivery.

Kerry McCarthy made the point that we need to be able to measure the effectiveness of the grant, and that it should be a nudge in the direction of good behaviour. I accept that any intervention should encourage good behaviour. Unfortunately, what I saw in my clinical practice, and I speak also as the chair of the all-party parliamentary group on maternity, is that unfortunately many mothers from vulnerable backgrounds were spending the grant on, among other things, cigarettes, which we know have a detrimental effect in pregnancy. There is also a high though often unseen rate of drug and alcohol misuse in pregnancy. The grant is potentially spent on those harmful things as well. Giving an intervention, such as the grant, 25 weeks into pregnancy is far too late to help women deal effectively with those substance misuse problems.

Photo of Kate Green Kate Green Labour, Stretford and Urmston

I am sure the hon. Gentleman will agree that the majority of mothers are not substance misusers or alcoholics. Indeed, there is considerable evidence over many years, including from the Policy Studies Institute, that shows that if women are given more money, what they do, as my hon. Friend Kerry McCarthy said, is spend it on their kids.

Photo of Daniel Poulter Daniel Poulter Conservative, Central Suffolk and North Ipswich

That is a fair point. Nevertheless, many women smoke during pregnancy and do not necessarily give up smoking. The hon. Lady made the point in her speech earlier about low birth weight babies, which we know is linked to smoking. The grant can be used by mothers to support their smoking habit. To be used effectively, a grant must be tied in with results and effect. We all want mothers to have better nutrition, but unfortunately the grant was often spent on harmful substances. The main problem with the grant is that it was not targeted, it was not effective, and it was not making a difference at the time that we know matters to mothers, which is at birth and delivery.

Photo of Kerry McCarthy Kerry McCarthy Shadow Minister (Treasury)

I am slightly suspicious about the extent to which the hon. Gentleman speaks with authority on what the women who come to see him in his surgery spend their health in pregnancy grant on. I cannot imagine them saying, "I'm off now to spend my grant on rather a lot of packets of fags." What is the difference between the point that the hon. Gentleman is arguing now-that during pregnancy women should not be given a lump sum that they can spend in any way they choose because some of them might spend it on the wrong things-and what happens with child benefit after a child is born? Surely mothers could spend their child benefit on cigarettes, drugs and alcohol. If that is pursued to its logical conclusion, is it not an argument against giving them child benefit?

Photo of Daniel Poulter Daniel Poulter Conservative, Central Suffolk and North Ipswich

We are not talking about child benefit this evening. We are debating the pregnancy grant. On the principle that the hon. Lady outlines, if we want to provide an intervention and if we want to make a gift of money effective, we need to target it effectively. We have no evidence to show that the grant is an effective intervention in pregnancy. No one on the Labour Benches has shown that the intervention is effective in improving nutrition in pregnancy.

Granted, in my clinics I obviously did not discuss in detail where the grant was spent. Nevertheless, I saw in my clinical practice far too high a rate of women smoking during their pregnancy. I would much rather see effective and targeted advice, independent of any grant, being focused on making sure that women do not smoke while they are pregnant. That would be a much better way of dealing with the issue.

Photo of Sarah Newton Sarah Newton Conservative, Truro and Falmouth

I endorse what my hon. Friend is saying. I took the time to read in Hansard the entire debate that took place when the Bill was first introduced. The very points that my hon. Friend is making now were made then-that the grant is not the right way to encourage good nutrition in women of child-bearing age, which we all agree is vital.

Photo of Daniel Poulter Daniel Poulter Conservative, Central Suffolk and North Ipswich 8:45 pm, 22nd November 2010

I thank my hon. Friend for her point. On nutrition in pregnancy, we know from all the evidence that the biggest and single most effective intervention in nutritional terms is to give women folic acid pre-conception and in the early days of pregnancy. Most problems or birth defects occur in the first six to eight weeks of development, when the embryo is very small, so if we are to intervene effectively that is the time to do so. We already do, because all GPs, midwives and obstetricians encourage women in the first stage of pregnancy to take folic acid, which is the single most effective intervention to prevent neural tube defects and all others.

We have heard how we need to ensure that when we intervene, particularly with the most vulnerable and disadvantaged groups, we do so effectively. When the Act was introduced, the whole point of it was to reach those groups, yet people from Traveller communities, Gypsies and people from deprived backgrounds often still do not access maternity services until the time of delivery or when it is far too late. The hon. Member for Bristol East tried to argue that the grant improves access to maternity services among disadvantaged groups, but lots of clinical audits and data prove that it does not. The evidence shows that the grant is not at all effective in helping improve access to pregnancy services. The hon. Lady's point fails, and I hope Members bear that in mind later.

We are talking about targeted, results-driven and evidence-based care, but there is no evidence to support the grant as a nutritional intervention or in terms of improving childhood outcomes at birth, so for all those reasons we must target our resources where they belong, on putting those 3,000 extra midwives on to the front line, because they, not a £190 grant, will make the difference.

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

It has been a brief but thoughtful and thought-provoking debate. The amendments that Kerry McCarthy proposes seek to achieve one of three things: keep the health in pregnancy grant in place, delay its abolition or require the Government to conduct a review into the case for maintaining it in another form.

The grant was introduced in April 2009 by the previous Government. When announced in the 2006 pre-Budget report, the provision was to be paid as child benefit from the 29th week of pregnancy to recognise the important role of nutrition in the last months of pregnancy, when nutrition is most important, and in the first weeks after birth, with parents bearing the extra costs. Then, the payment was to be a £190 one-off grant, made from the 25th week of pregnancy with the intention of providing support for the general health and well-being of women in the later stages of pregnancy and helping them to meet costs in the run-up to birth.

Those were laudable objectives, but, as we have outlined on Second Reading, in Committee and again tonight, the grant has been essentially flawed from the outset. There is no requirement to use it for better health and well-being: women can spend the money on whatever they want; and it is paid to pregnant women regardless of their income or need. As Dr Samantha Callan of the Centre for Social Justice said in an evidence session on the Bill:

"There was absolutely no guarantee that the grant would be spent on nutritious food." --[Official Report, Savings Account s and Health in Pregnancy Grant Public Bill Committee, 4 November 2010; c. 116, Q279. ]

In the context of the unprecedented budget deficit, therefore, we believe that this payment to all pregnant women is a poorly targeted use of limited public funds. Abolishing the payment will help to reduce the UK's budget deficit, saving £40 million in 2010-11 and £150 million per annum from 2011-12 onwards.

Having decided that we need to abolish the grant, the Government believe it should be done quickly to maximise the Exchequer savings. By delaying the abolition until 2014, as amendments 44 and 45 seek to do, we would reduce those savings, and amendment 3 would keep the grant in place, so additional money would have to be found through other spending cuts, borrowing or tax rises this year. As my hon. Friend Dr Poulter said, there are other priorities. The coalition Government are clearly committed to increasing spending on health in real terms over the lifetime of this Parliament. Are Labour Members saying that that commitment should be relaxed to enable us to keep the health in pregnancy grant?

Much was said by Opposition Members on Second Reading and in Committee about the importance of a healthy diet during pregnancy, the importance of vitamin supplementation, and, especially, the effect of these concerns for women on low incomes. There is no doubt that maintaining a healthy diet throughout pregnancy is important. However, the evidence suggests that that should start at the earliest possible stage. Belinda Phipps of the National Childbirth Trust said in the evidence session on the Bill:

"If you are setting out primarily to improve the nutrition of the mother to improve the health of the baby," the payment of the health in pregnancy grant

"needs to be earlier. If you...really want to change the future of the baby, it needs to be as early as possible. It is not possible easily to do it pre-conception, but the earlier in pregnancy you can do it, the better."--[ Official Report, Savings Accounts and Health in Pregnancy Grant Public Bill Committee, 4 November 2010; c. 79, Q205.]

Amendments 43 and 44 would stop the abolition of the grant and require the Treasury to conduct a review to consider whether the grant should be retained in its current form, means-tested or replaced by a system of vouchers. As I said on Second Reading and again in Committee, the Government are committed to supporting the health of pregnant women in low-income households through the Healthy Start scheme, which provides support from the 10th week of pregnancy, when diet is particularly important in a baby's development. The Healthy Start scheme provides vouchers worth £3.10 a week for fruit, vegetables and milk, as well as coupons to exchange for Healthy Start vitamin supplements containing the recommended daily amounts of vitamins C and D and folic acid for pregnant women and new mothers. The Department of Health is also co-ordinating a consultation exercise that seeks views on the extension of the scheme to allow vouchers to be used to buy plain frozen fruit and vegetables. This would increase the flexibility and choice for women supported by Healthy Start while encouraging them to include more fruit and vegetables in their daily diet at the time in their pregnancy when that is particularly important.

The amendments would delay the abolition of the grant or keep the grant in place. That would mean that additional money had to be found through other spending cuts, borrowing or tax rises this year. The Government have to face some difficult choices as to where to cut public expenditure, and we cannot afford to continue spending £150 million a year on the cash payment of a health in pregnancy grant regardless of what it is spent on and whatever the income or financial position of the recipient. As my hon. Friend Fiona Bruce explained, it is not well focused, well targeted or well timed. That is why I believe that it is right to scrap this grant, recognising that measures are in place to help to support maternal nutrition among families on low incomes. We also have the Sure Start maternity grant, which is a lump sum to help those on the lowest incomes.

Photo of Mary Glindon Mary Glindon Labour, North Tyneside

The Sure Start maternity grant is given only for the first child. If a family do not have that grant or the health in pregnancy grant, with the Government also reducing the amount that they would get in family tax credits for toddlers, they will be much worse off.

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

That is an unfortunate consequence of the difficult decisions that we have to take to tackle the deficit that the hon. Lady's party has left behind. Tough decisions have had to be made to target help as closely as possible on those in the greatest need. The support that exists, whether through the Sure Start maternity grant-yes, we are restricting that to the first child from April 2011-or through the Healthy Start vouchers, provides targeted, focused help for those in the greatest need. That is the best way to give support to help mothers on low incomes through pregnancy. The health in pregnancy grant does not tackle nutrition, and it is not well timed because it should be delivered at an earlier stage to help families.

I have to say to the hon. Member for Bristol East that if the grant goes, there are still plenty of opportunities for expectant mothers to access health visitors, midwives and GPs to get the support that they need to help them with their diet or with smoking cessation, and to give them advice and support throughout the pregnancy. Support is not limited simply to receiving that grant; it is there throughout pregnancy, and we should not overlook that fact in discussing the Bill.

It is right to remove the health in pregnancy grant, even though we do not do it lightly and would not choose to do it unless it were a consequence of the situation that we have inherited. The previous Government lost sight of good fiscal discipline, and we are having to take measures today to tackle the problems that have resulted.

Photo of Kerry McCarthy Kerry McCarthy Shadow Minister (Treasury)

In all our debates on the health in pregnancy grant on Second Reading, in Committee and today, we have been going round and round in circles without ever quite nailing what the Government's objections are to the grant continuing.

I shall try to pin down what the Minister has said. He says that the grant would be better if it were paid earlier, yet he has not brought forward any suggestion that it should be. He says that it is a problem that there is no guarantee about what it is spent on, yet he seems perfectly happy to go on paying child benefit to mothers or the winter fuel allowance to pensioners. There is no guarantee about how that money is spent, so I reject that argument. It has been suggested that there has been no evaluation of the scheme, but as he said, it was introduced in 2009. How on earth can we possibly have had the chance to carry out a full evaluation of the take-up of the grant, what it is spent on and people's access to advice?

My final point, and the crux of the matter, is that the Minister praises the Healthy Start scheme because it is targeted at the people who need it most. He also mentioned the Sure Start maternity grant, which, as we know, is being reduced to just the first child. Does he not accept that if we abolish the health in pregnancy grant, the families he spoke of, who need the Healthy Start vouchers to cover expenses and to have a healthy diet during pregnancy, will be £190 a week worse off? That is why we argue for the retention of the grant, with a review of whether it should be means-tested and better targeted. In rejecting the idea of a review totally, he is basically saying that the poorest families, who are already suffering because the Sure Start maternity grant is being restricted to the first child, must lose £190 a week. That is something of a scandal. I therefore wish to press the amendment to a vote.

Question put, That the amendment be made.

The House divided: Ayes 217, Noes 304.

Division number 124 Savings Accounts and Health in Pregnancy Grant Bill — Clause 3 — Removal of entitlement to health in pregnancy grant

Aye: 217 MPs

No: 304 MPs

Ayes: A-Z by last name


Nos: A-Z by last name


Question accordingly negatived.

Third Reading

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury 9:11 pm, 22nd November 2010

I beg to move, That the Bill be now read the Third time.

As we have discussed today, the Bill deals with three policies: child trust funds, the saving gateway and the health in pregnancy grant. Both today and in Committee two weeks ago, we have debated the details of those policies. Opposition Members have pointed to their merits or, rather, their potential merits-as we have found, quite often the hard evidence to support their arguments is rather lacking. They have argued that we should either retain the policies or delay removing them, and sometimes both at the same time.

I shall come to some specific points about those policies in a moment, but I want to be clear on one point. The question for this Bill is not simply whether we think that child trust funds are a nice idea or whether we would like to give pregnant women some more money. The question for this Bill is a harder one to confront. It is whether we can afford such policies-at a cost of £3 billion over the spending review period-given the scale of the deficit that we inherited, and whether continuing with them would be the best use of taxpayers' money.

As we decide to give the Bill its Third Reading, it is important to remind hon. Members of the context. When the Governor of the Bank of England says that our fiscal position is "clearly unsustainable", when our borrowing last year was the highest in our peacetime history and when we are spending £120 million a day just to pay the interest on our debt, something has to give. If we do nothing and fail to tackle the deficit, we will see higher interest rates, business failures, rising unemployment and, potentially, even the end of the recovery. We therefore need a clear, credible plan to tackle the deficit. We have set one out, including more than £80 billion of spending reductions. However, to deliver it we have to make choices about where savings are going to come from.

We have made those choices, and this Bill implements three of them. They were not easy choices. As I said on Second Reading, the Conservative party supported the introduction of child trust funds and the saving gateway in opposition. Indeed, on at least three occasions so far, Mr Hanson has quoted what I said about the saving gateway, and I suspect that he may well remind the House again in his speech on Third Reading. We did not warn against the health in pregnancy grant, although we did raise some concerns about it. My Liberal Democrat colleagues were rather more sceptical. They opposed the child trust fund and prayed against the regulations that introduced the health in pregnancy grant. However, as I have said, the question is not whether it would be nice to keep those policies-in an ideal world it would be-but whether we can afford to keep them, given the fiscal challenge that I have outlined, and where else we would have to find savings if we did so.

I believe that the Bill makes the right savings. Continuing with the child trust fund, for example, would have cost us more than £500 million each year. That money would have been locked up for up to 18 years-a luxury we cannot afford.

Given our limited resources, we must spend money on our priorities: reducing the deficit, so that our children are not left to pay our debts; supporting the most vulnerable and poorest people in our society now-for example, through the pupil premium; and the extension of early-years education and care to all disadvantaged two-year-olds. Those policies will provide real opportunities for disadvantaged children to move out of poverty for the long term.

While saving money from the child trust fund, we are still committed to encouraging people to save for their children in an affordable way. That is why I announced a new account-a junior ISA-on Second Reading. It will provide parents with a simple and clear way of saving for their children, albeit without Government contributions, and build on products that are already accessed by 20 million people of all ages and on all incomes. I also want to encourage people on lower incomes to save, but again that must be affordable. Unfortunately, it would not have been affordable to introduce a new scheme such as the saving gateway, which would have cost up to £150 million a year just when we are starting to tackle the deficit that we inherited in the summer this year.

I was worried that there would not have been enough providers to ensure that everyone had an accessible option for opening a saving gateway account. During the Bill's evidence sessions, we heard from the British Bankers Association and the Building Societies Association that their members were far from enthusiastic about providing such accounts. The Post Office was going to offer the account only if taxpayers had funded it to do so. We cannot afford to introduce that account, and there were significant doubts not only about access and who would offer them, but about their effectiveness in increasing saving.

It is right to abolish the health in pregnancy grant. I remind hon. Members that it is a one-off cash payment of £190 to every pregnant woman around the 25th week of their pregnancy. In Committee, we debated at length the different ways in which women might spend that money, and how the scheme could be improved, such as by paying it earlier, in instalments or to only some women. The basic point is clear. The grant is unfocused, it can be spent on anything, and it is untargeted. We believe that there are better ways to support maternal health.

Photo of Fiona O'Donnell Fiona O'Donnell Labour, East Lothian

Following that logic, does the Minister believe that because there is no guarantee about where housing benefit, child support and child benefit will be spent, they should be scrapped?

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

The hon. Lady has not participated in the debate today, but we have thought carefully about how to provide support during pregnancy to those on low incomes. There are vouchers under the Healthy Start scheme, and the Sure Start maternity grant, which we believe are more effective in providing targeted, better-timed and more-focused support to expectant mothers.

There is a choice. We could spend £120 million on the health in pregnancy scheme or we could scrap it and save the money so that we do not have to increase taxes or borrow so much. The latter is the right action to tackle the deficit. There are better ways to support maternal health, such as the Healthy Start scheme, which provides vouchers to enable pregnant women to buy fresh fruit and vegetables. The Department of Health is consulting on whether to extend that to plain frozen fruit and vegetables. Vouchers are also available for vitamin supplements, including folic acid, to provide a daily dose of vitamins B and C.

The Healthy Start scheme is effectively targeted at pregnant women and children living in low-income households, and is focused on supporting health and well-being, because it pays support in the form of vouchers rather than in cash. It is delivered at the earliest stage of pregnancy when dietary intervention is much more effective. That means that we can focus our resources better, but at the same time make some real savings-about £150 million a year. That is a vital contribution to tackling the deficit and ensuring that people are not burdened with the debt that we inherited from the previous Government.

That is the key point of the Bill. 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 more than £3 billion over the spending review period. That is an important part of our plan to reduce the deficit and put our finances back on a stable footing.

As I said, this has involved some tough choices, but I believe that we have made the right ones. We found areas of spending, such as the child trust fund, which does not support people for up to 18 years, the saving gateway, which has not yet been introduced, so its removal will be less directly felt, and the health in pregnancy grant, which is untargeted and unfocused. We have confronted the questions, which I outlined earlier, of whether we could really afford to continue with those policies and whether they would represent the best use of taxpayers' limited resources. The questions for anyone who wants to oppose this Bill and to continue with the policies are how they would find the money and what they would do instead. This is an important Bill. It is part of our work to tackle the unprecedented deficits that we inherited, and it will help us to put our public finances back in order. I commend it to the House.

Photo of David Hanson David Hanson Shadow Minister (Treasury) 9:21 pm, 22nd November 2010

I thank the Minister for his opening remarks on Third Reading. He and I have got to know each other, as Minister and Opposition spokesperson, and other members of the Committee quite well over the past few weeks. We have now discussed the key issues on Third Reading. He will know that we have had a total of 23 votes on Second Reading, in Committee and on Report. I hope that that illustrates the strength of feeling about the Bill among Labour Members. It contains only four clauses, yet we have managed to have 23 votes on a range of issues as we continue to oppose the Bill. We have fought the Bill at every opportunity, and will continue to do so in another place shortly.

We oppose the Bill because the abolition of the child trust fund will reduce the opportunity for the poorest in our society to have a capital asset at 18. We oppose it because the abolition of the saving gateway scheme will reduce saving opportunities for the poorest in our society. We also oppose it because it will reduce the help available to pregnant women by stopping the £190 grant that is available to them in the 25th week of their pregnancy. Again, I must point out, for the Minister's benefit, that that will hit the poorest in our society the hardest.

As Opposition spokesman, I have tried to be as pragmatic and helpful to the Minister as possible on a number of occasions. I have tried to help him by giving him an opportunity to delay the implementation of the Bill, so that we could see whether some of our economic woes-which are difficult and challenging at the moment-are overcome in the next three years. We offered the Minister the opportunity to postpone implementation of the bill until 2014, or to 2016, but he rejected it. We offered him the opportunity to have holiday payments, but he rejected it. We also offered him the opportunity to deal with Wales, Scotland and Northern Ireland differently, but he rejected it.

We offered the Minister the opportunity to fulfil his manifesto commitment to keep the child trust fund for the poorest third of our society, for those on disability living allowance and for looked-after children-a point that my right hon. Friend Paul Goggins has particularly focused on during the debate. We have considered a range of issues, including whether the Bill needed a proper equality impact assessment, but the Minister has chosen to reject them all. Well, so be it; that is his prerogative. I believe that he has made the wrong choices in relation to tackling the deficit, by putting women, children and the poorest at the forefront of his deficit reduction plan.

In doing that, the Minister has broken his manifesto commitments on the child trust fund for the poorest third, for looked-after children and for those on DLA. He has made a U-turn by abolishing the saving gateway scheme, which he supported during the election and right up to the moment when the Bill was introduced, and by abolishing the health in the pregnancy grant, for which he had no mandate. He never argued for its abolition at the general election, or mentioned having to cut it; he never said that he was concerned about it at all. He must have known at that stage that there would be, as there are, challenges for whoever won the general election to ensure that we met those needs.

The Bill abolishes the child trust fund completely; it abolishes the saving gateway completely; it abolishes the health in pregnancy grant completely. It is the deficit reduction plan hitting women, children and the poorest in our society the hardest. The Minister will know that the child trust fund was introduced by the Labour Government not just as a way of helping poorer people to save, but as a means of ensuring that we have individuals with a capital asset at the age of 18. He will know that there was a take-up of about 70,000 a month until he introduced this measure in July; with this Bill, we now look to 3 January 2011. He will know that 6 million families and people have the child trust fund in operation at the moment, but that in future that opportunity will be denied to individuals across the UK because this Minister has chosen-of all the choices he could have made-to ensure that the deficit reduction plan falls on those people who need the help and support the most. The Minister will also know that £2 billion of saving has been generated by the child trust fund to date. He will know that it might not be generated in future because the partnership between Government, the state and individuals will no longer be there in future.

In its place, the Minister wafts in front of us the prospect of a child ISA for the future. I await the details, but so rushed is this proposal that it was not even worked out fully for the Committee. So rushed is this Minister that he brings a proposal before the House today, yet he cannot even say what the child ISA scheme will be in detail. He cannot say when it will definitely be introduced. He cannot say whether contributions from looked-after children-an issue brought to our attention by my right hon. Friend the Member for Wythenshawe and Sale East-will be possible. He cannot say how much will be involved or how the scheme will operate downstream, yet he asks us today to abolish the child trust fund, which has had a proven record of saving success to date.

The Minister brings forward the abolition of the saving gateway, doing away with the Saving Gateway Accounts Bill introduced in 2009, even though it was not opposed by the Conservatives on Third Reading. The purpose of that scheme was to promote savings habits among working-age people on lower incomes. He will know that we have had two pilots, neither of which was criticised by the Minister at the time, and they involved 22,000 people generating £15 million of savings-helping poorer people to save for the future. He does this at a time when his deficit reduction plan is going to put 500,000 people in the public sector on the dole. With VAT increases, with loan sharks operating in the community and with the collapse of schemes such as Farepak, which my hon. Friend Yvonne Fovargue mentioned in Committee, the Minister will find that the need to give help and support to poorer savers is even greater now than before. But, no, the Minister will not even allow a three-year gap to see whether the economy recovers. The scheme would not cost him a penny in the next three years, but he wishes to abolish it because of dogma-nothing else but dogma.

When he abolishes the saving gateway scheme and when Government Members vote for that abolition this evening, they need to know that they are voting to ensure that people on working tax credit, income support, incapacity benefit, jobseeker's allowance and other low-income people will be denied the benefits of that scheme. Let us remind the Minister that this Labour Government would have brought this into play in July 2010, supported by our Chancellor and supported by a deficit reduction plan in last March's Budget that would have ensured that we halved the deficit within four years.

Last of all, the Government are abolishing the health in pregnancy grant-a one-off tax-free payment of £190 to mothers-to-be who are 25 weeks pregnant. We can debate it and have debated it in detail, but nobody can deny that a £190 grant would have helped the poorest pregnant mothers in our society to meet the costs of their pregnancy and to ensure, as my hon. Friend Kerry McCarthy said, that they receive further help and support through medical advice in the 25th week and beyond, linked to medical visits. The Minister knows that 750,000 qualifying pregnancies each year will not receive the grant. Again, he has hit women-pregnant women-and children hardest.

It would be different if the Government's proposals were due merely to the fact that these were Labour Government initiatives. However, Mike O'Connor, chief executive of the watchdog group Consumer Focus, has said:

"The Saving Gateway would have been a great opportunity".

The Child Poverty Action Group, which was led with distinction by my hon. Friend Kate Green, has said:

"It's a real shame that this move to help people build up savings to deal with crises... should be scrapped."

The National Childbirth Trust has 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".

The Royal College of Midwives-this answers the point made by Dr Poulter-has said that it is

"disappointed at the decisions to abolish the Health in Pregnancy Grant".

A common thread runs through the Bill. The Government are hitting the poorest hardest. They are ensuring that those who need the help, support and partnership of the state are hit hardest; and although they claim to be doing it in the name of deficit reduction, they are actually doing it in the name of dogma. I urge my right hon. and hon. Friends to reject the Bill, but I also urge the Minister to reflect on the fact that, although there is much on which we have disagreed today, there are still areas on which we can reach agreement.

I particularly hope that the Minister will examine in detail the methods and discussions being undertaken by my right hon. Friend the Member for Wythenshawe and Sale East in regard to looked-after children, and that he will return with positive proposals so that, although the Bill has not been amended in this House, amendments may be made in another place. Whatever the Minister says about the need to abolish help and support through the child trust fund, or about the removal of the saving gateway or pregnancy grants, he must know that looked-after children do not have parents who are responsible for them. Their parents may be dead, or they may be in difficult circumstances-they may be in prison, or involved with alcohol or drugs. But the Minister knows that those parents are not there to support their children, and he should know that in that instance, if in no other, the state needs to step in.

Photo of Graeme Morrice Graeme Morrice Labour, Livingston

I agree with my right hon. Friend that the Government's proposals are a direct attack on the poor. In my constituency 7,824 children, many from backgrounds that are less than affluent, currently benefit from the child trust fund. The Minister said earlier that it was a luxury that we could not afford. Does my right hon. Friend agree that that is an affront to all those people in my constituency and throughout the country, many of whom are impoverished?

Photo of David Hanson David Hanson Shadow Minister (Treasury)

I am grateful for my hon. Friend's comments. The Minister and the Conservative party-and let us not forget their partners, the Liberal Democrats-are ensuring that they hit such people hardest in abolishing the child trust funds, particularly looked-after children and those whom they said they would defend, the poorest third. They are hitting people on jobseeker's allowance who would have benefited from the saving gateway. As for the removal of the health in pregnancy grant, the loss of £190 may not be the end of the world for many people, but for the poorest in our society it was a contribution on which they depended to ensure that they met the costs of pregnancy.

Whatever disagreements the Minister and I have had-and we have had many over the past few weeks-I hope that he will take the opportunity to consider some of the key issues that he can still salvage. I hope that he will at least ensure that we can provide a partnership for looked-after children. Undoubtedly all the promises that he made before the election will be quoted again in another place, and every one of the issues will be tackled again there. We shall see what is said in the other place, but I hope that the Minister will reflect on those issues. In the meantime-with some pride in what the Labour Government did-I urge my hon. Friends to reject the Conservative-Liberal Democrat proposals.

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley 9:33 pm, 22nd November 2010

Let me ask a question. If the Labour party will not cut these three things, what will it cut? They are probably three of the easiest things to cut that could possibly be identified.

Let us take the child trust fund. At present we have a deficit. Every year, we borrow the deficit and add it to our debt. Putting money into the child trust fund means that the taxpayer-the state-borrows some money and then puts it into a fund. Some of the funds lose money while others gain money. Hopefully, 18 years later there will be a little bit of money for someone. If the Labour party cannot cut that, what will it cut? As the witnesses said, if we want to help people when they are 18, we can help them when they are 18. If we want to help 18-year-olds who are leaving care, we should help them at age 18, not when they will have to wait for 18 years. It is absurd to borrow money today to put in a fund that might lose or might make money-there is evidence of both eventualities-and then 18 years later maybe the young person will have some money.

We have to make choices. A key question is whether people on lower incomes, and especially those who have just given birth, should spend money on food and health or save some money. In Committee, I asked Katherine Rake that question and she said:

"You cannot make a choice in that way."--[ Official Report, Savings Accounts and Health in Pregnancy Grant Public Bill Committee, 4 November 2010; c. 95, Q244.]

In essence, that is the Labour party's argument. The Opposition are basically saying, "We don't make choices. There's no need to make choices. We can have this and this and this, and we can keep on going until the interest rates go sky high, we lose lots more jobs and we have a sovereign debt crisis."

On Report, Sheila Gilmore talked about paying down the deficit. We do not pay down a deficit; we pay down debt. The deficit is the amount of money added each year to our debt, and the danger we face is that if we are not careful the interest rates on the debt will rise as well as the debt itself, and that would mean more cuts. If Opposition Members are going to argue this point of view, therefore, they have to explain where the cuts would come from, but they have not answered that. Are they going to close down hospitals to pay for these things? Are they going to sack more police officers? We face a very difficult time, but if the Opposition say they would keep these three particular projects, they have to explain where they would get the money from to pay for them. Would they put VAT up again?

Photo of Pete Wishart Pete Wishart Shadow SNP Spokesperson (Culture and Sport), Shadow SNP Spokesperson (Constitution)

If I had closed my eyes, I would have thought this was the hardest right-wing Thatcherite speech I had ever heard, yet it is being made by a Liberal, for goodness' sake. Why are the Government taking this out on women and children? If cuts have to be made, why is it women and children who are in the firing line?

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

What we are talking about is putting some money in a fund and leaving it there for 18 years. That is not going to affect any woman or child for 18 years. What we should be doing is looking after people now. Our priorities have to be the vulnerable people now. We have to give priority to protecting the poorer, the less well off, the vulnerable and those with learning difficulties now, rather than putting some money away for 18 years.

Photo of Kate Green Kate Green Labour, Stretford and Urmston

Can the hon. Gentleman give me one single instance of where the incomes of the poorest are being increased by this Government?

Photo of John Hemming John Hemming Liberal Democrat, Birmingham, Yardley

Well- [Interruption.] Sorry? [Interruption.] Yes, that is a good one. The tax threshold is a good example. One area we are focusing on is low-paid people in work, so there is the first stage of gradually increasing the tax thresholds up to £10,000 a year, and the universal credit itself should be particularly helpful to those on benefits and low pay, such as many people who come to my advice bureau. On Saturday, I did some calculations with somebody who had worked out that when we took into account all the rules the Labour party had produced over the years, it was not worth his while to work. Interestingly, in that instance that was because of a Child Support Agency deduction. We need to focus on the low paid and make sure that people get into work and through that route get themselves out of poverty. That is a good example of our putting money into the hands of low-paid families.

There is no evidence that the child trust fund produced extra saving, there is no evidence that the saving gateway produced extra savings-and there is only some evidence that, perhaps, it reduced spending on food outside the home-and there is no evidence that the health in pregnancy grant did any good for health in pregnancy. On that basis, if we are not going to cut these measures, what are we going to cut?

Photo of Sheila Gilmore Sheila Gilmore Labour, Edinburgh East 9:39 pm, 22nd November 2010

There are, indeed, choices to be made: there is a choice about the kind of society we want to live in, and there is a choice about how we resolve economic problems. Members on the coalition Benches want the public to believe that there is only one show in town, which is that we have the worst deficit in peacetime and that we have a situation that was entirely caused by the last Government spending too much over too many years. That is the only argument they want people to believe, but let us just unwind a couple of years.-

Photo of Sheila Gilmore Sheila Gilmore Labour, Edinburgh East

I am not going to take an intervention just now.

I recall that three years ago, at the beginning of the recession, people were predicting how high unemployment would rise, how difficult things would get and how high our deficit might be. Unemployment did not rise nearly as high as predicted under the Labour Government, and I will tell hon. Members why: because we were putting in money as part of an economic stimulus. Yes, we borrowed to do that but we did so because it was the right thing to do. We were told that it was the right thing to do by the junior partner in this coalition throughout that period. I remember those debates before the election-

Photo of Sheila Gilmore Sheila Gilmore Labour, Edinburgh East

I was thinking about the public debates on television involving the Chancellor and the would-be Chancellors. I recall what the Liberal Democrat spokesman on finance said, and he put forward a completely different perspective from the current Chancellor. There was no agreement.

Members on the Government Benches may disagree with what I am saying, and I am happy for them to do so because that is legitimate in politics. We have a different view of how to do things, but that does not mean that our view is so unreasonable that we are not even allowed to put it. We are hearing that we are not allowed to argue any of these points and that we are not supposed to say that we would make different choices. The Minister gave this one away when he said that these measures would not really harm people; he said that the saving gateway had not even started and so nobody was being harmed, which is why it is an easy cut.

Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys

How does the hon. Lady respond to the point that there were no willing providers of the saving gateway? No matter how successful her party's pilots were, no building societies were willing to make that provision. It is all very well her saying all this, but the gateway was not going to take place in reality; it was just going to take place in her own private make-believe world.

Photo of Sheila Gilmore Sheila Gilmore Labour, Edinburgh East

If the hon. Gentleman looks at all the evidence and the research, he will find that it is clear that this was going to take place -[Interruption.] It was going to take place because there were providers who were going to do it -[Interruption.] I do not know why he is waving his hands in the air-we could do that too. There were credit unions that wanted to get involved, as did two banks. The complaint made in Committee was that because only two banks wanted to get involved, there might not be enough access points. I have suggested other access points and I described the debate that took place when the housing association movement, with which I was involved, wanted to be one of the ones that would help people to make payments into a saving gateway scheme. That argument does not hold up.

We have heard a number of distortions of the evidence. We were told that the NCT thought that the money should go on women buying food, rather than saving, but we should recall that Belinda Phipps, the NCT's chief executive, has written a foreword to the book that I mentioned earlier entitled "Asset Building for Children-Creating a new civic savings platform for young people". It was written by two people, one of whom is Phillip Blond, who believes very strongly in the child trust fund; he believes that saving is very important and he suggests that we should have stuck with this arrangement. He does not say that it was without its faults-this is not a case of saying that it did not have faults-but he devotes a paragraph to saying that although it could be improved, that does not mean we should throw it out completely.

Some of the debate, particularly in Committee, was interesting and covered a lot of important material. If we want to do the best by people, we would not simply reach a point where, without looking at the wider context, we say, "Right. We have to make some savings now. Let's just chop this, this and this." It may be that we could have improved some of these schemes and they could have been differently focused. However, that is not the debate before us, but the stuff that has been thrown up in the course of it; the debate before us deals with the fact that we either have these schemes or we do not.

Labour Members believe that we could run our economy differently and that we do not need to cut so far and so fast. On that basis, we would be able to decide which things we wish to keep in place and which things we might want to save. I could talk about all sorts of savings that I might want to make, but I would also want to talk about the balance between savings and taxation. There are legitimate debates to be had about that.

We do not need to accept proposals that harm some of the most vulnerable in our society and the long-term view. It is astonishing that the Conservatives, in particular, whom I always understood to believe in saving, should not want to go ahead with the saving gateway. In 2003, it seems, the Chancellor said:

"We think that having people a stake in society, gives them independence, encourages self-reliance and bolsters the freedom of the individual against the overbearing state."-[ Hansard, 15 December 2003; Vol. 415, c. 1345.]

He has clearly changed his mind.

Photo of Sarah Newton Sarah Newton Conservative, Truro and Falmouth 9:45 pm, 22nd November 2010

Thank you, Mr Deputy Speaker, for calling me to speak in the last moments of the debate. It was an enormous privilege to serve on the Public Bill Committee and to listen to my colleagues on the Opposition and Government Benches, as well as to the many organisations that gave evidence.

Listening for all that time brought home to me why I am so pleased to be sitting on the Government Benches and not on the other side. I believe absolutely that Government Members will form the most reforming Government that I have seen in my lifetime-a Government who are prepared to make the tough decisions that will provide the solutions to the problems, as the Bill seeks to do.

There is no doubt in my mind about the good intentions of the Opposition when they introduced these three measures some years ago. There is also no doubt in my mind from reading Hansard from that time and from re-examining the evidence that we have been given over the course of the past few weeks that there is no evidence base to show that the measures will tackle the vital issues of alleviating poverty and helping the most disadvantaged people in our society.

Photo of Daniel Poulter Daniel Poulter Conservative, Central Suffolk and North Ipswich

On that note, does my hon. Friend agree that it is a great pity that it has taken the advent of the deficit for us properly to examine some of the previous Government's policies? We all want to look after the most vulnerable, but the only way to do that is properly to target our resources. At the moment, in difficult economic times, there are fewer resources than there once were, and the only way to do it is to base that targeting on the evidence and to ensure that the resources go to the most vulnerable. That is what the Government are about. We are getting rid of universal policies that do not work.

Photo of Sarah Newton Sarah Newton Conservative, Truro and Falmouth

I am delighted to agree with my hon. Friend. It is essential that we use the evidence base, and I find it frustrating that the evidence was available when the legislation was introduced a couple of years ago. Let us consider the debate on maternal health-I know that my hon. Friend has great expertise in this area. It was very difficult for my colleagues who were in the House at the time to get evidence on maternal health from the then Government, but it was demonstrated that the data set that could reasonably be used to measure the impacts of any additional nutrition on maternal health did not exist. When hon. Members are pouring out their crocodile tears, as we have seen for weeks, saying how poor the affected people will be and how we must take more time and evaluate these measures, they know full well that the data set does not exist to measure the impacts.

We should listen to my hon. Friends, and to midwives and clinicians up and down the country as they give their practical experience of working with women of child-bearing age to improve their maternal health. We have heard about policies and projects that deliver. For example, we know that not enough women understand how to cook nutritious meals on a low income. Much more needs to be done about cooking in schools and in the community so that people on low incomes can cook nutritious food, and plenty of evidence supports the idea that that is an effective thing to do.

As my hon. Friend said earlier, we know that the single most important thing that we can give to a mum in her early stages of pregnancy is folic acid. All the support that the Government are putting in place through their reforms to the NHS will target help at women of child-bearing age and at those who are the most vulnerable in our society and who need such effective services from the NHS.

This Government are all about giving people a hand up, not a handout. Week after week we sit here and Opposition Members' answer to every problem is to throw some money at it. We in the Government will ensure that hard-earned taxpayers' money is spent where the evidence shows it will be most effective.

Photo of Margaret Ritchie Margaret Ritchie Shadow SDLP Spokesperson (Environment, Food and Rural Affairs), Shadow SDLP Spokesperson (Energy and Climate Change) 9:50 pm, 22nd November 2010

Representing, as I do, a constituency in Northern Ireland where there is considerable dependency on benefit and high levels of deprivation in urban areas, I am particularly opposed, as are my colleagues in the Social Democratic and Labour party, to the abolition of the child trust fund, the saving gateway account and the health in pregnancy grant. We are therefore opposed to the Bill. The current Government seem to think, as the Minister has shown, that the child trust fund, the saving gateway account and the health in pregnancy grant would contribute to deepening the deficit and are therefore unaffordable. It is extremely unfair that the disadvantaged and vulnerable should be penalised when efforts should be made to help to support them, and I find it shameful and unacceptable.

As a former Minister in Northern Ireland, I, like my right hon. Friend Mr Hanson, have been responsible for the Department for Social Development and, therefore, for social security benefits, community development and housing. I note, with some alarm, that Ministers in the Northern Ireland Executive have not been consulted or asked for their opinion of the Bill's content or its possible impact on the most disadvantaged and their communities. It is worth noting that 36 neighbourhood renewal areas in Northern Ireland are defined statistically by the Noble statistics on deprivation as having acute levels of poverty.

The withdrawal of these funds, combined with the coming changes to the benefit system, will simply deepen poverty levels and plunge people into further depths of despair. The measures might push people who are already suffering undue financial burdens into the arms of loan sharks and, in certain parts of Northern Ireland, they could enable those with paramilitary control to have a tighter grip on people. But no cognisance has been taken of any of that and there has been no consultation. The Government should step back from the brink and avoid implementing the measures. They should think of Northern Ireland as a place that is coming out of the legacy of conflict. We are trying to mitigate the influence of poverty and conflict and we are trying to underpin devolutionary arrangements. I ask the Government to please abandon the Bill tonight; we will be voting against it.

Photo of Stephen Williams Stephen Williams Liberal Democrat, Bristol West 9:53 pm, 22nd November 2010

I shall try to be brief so that Kate Green can get in. Mr Hanson, who leads for the Labour party, said that there have 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 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.

Photo of Anas Sarwar Anas Sarwar Labour, Glasgow Central

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?

Photo of Stephen Williams Stephen Williams Liberal Democrat, Bristol West

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."

Photo of Kate Green Kate Green Labour, Stretford and Urmston 9:57 pm, 22nd November 2010

In the short time remaining I will address one or two of the points that were raised in the last part of the debate. Is it right to give people cash? Absolutely. There is much evidence of the fundamental difference that an adequate family income makes to a range of good outcomes. Do people squander that cash? Absolutely not. There is a wealth of evidence to show that when low-income families, particularly mothers, are given more money, they spend it on their families and they spend it on their kids. Is it right that we cannot afford that? Only if we look narrowly at the short term. Government Members have rightly challenged us on the long-term savings to be made by addressing inequalities, but savings achieved tomorrow by investing in families today must be taken account of, and that is something to which Government Members have given no thought.

The child trust fund, in offering the poorest young people the opportunity to start their adult lives with an asset behind them, makes a significant difference to those young people, and I am distressed that that is to be taken from them as a result of the Bill. We have offered the Government so many ways in these difficult circumstances to manage those policies through. We have offered them the opportunity to set a target for a time or to cease paying into those funds for a time. We have pleaded with the Government not to scrap them entirely, not least because they have nothing better to put in their place.

The Government are taking £18 billion out of the incomes of low-income households and half a million jobs out of the public sector, many of them for the lowest paid workers, and then they have the temerity to say that, in addition, they will remove the £190 health in pregnancy grant because, they claim, there are other things to support pregnant women. That is indecent and ungenerous, and I am distressed that so many Government Members consider it acceptable, necessary or even desirable. I very much hope that when the Bill moves to another place, there will be an opportunity to amend the clauses in a way that we have regrettably not been able to do. I regret that the Bill is going forward in its current form, despite the best efforts of my right hon. and hon. Friends.

Question put, That the Bill be now read the Third time.

The House divided: Ayes 311, Noes 224.

Division number 125 Savings Accounts and Health in Pregnancy Grant Bill — Clause 3 — Removal of entitlement to health in pregnancy grant

Aye: 311 MPs

No: 224 MPs

Ayes: A-Z by last name


Nos: A-Z by last name


Question accordingly agreed to.

Bill read the Third time and passed.