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Mr Mark Spencer (Sherwood) (Con):
I congratulate the Secretary of State on his successful negotiations with the Treasury, and I welcome the fact that both Mansfield bus station and the Hucknall town centre improvement scheme are in the development pool. What criteria will the Secretary of State and his
Department use to distinguish those schemes in the development pool that will move forward from those that will not?
Mr Hammond: The Department uses a set of criteria wider than simply measuring the benefit-cost ratios-monetisable benefits currently add up to exactly 50% of the weight in the multi-criteria analysis that we perform. We also look at wider network benefits, regional balance, the impact on economic development over a wide area, and landscape impacts and wider environmental benefits and disbenefits, so it is quite a wide-ranging scheme. Details are available on the Department for Transport website.
Derek Twigg (Halton) (Lab): My question is on the funding of the Mersey Gateway between Runcorn and Widnes. It would be useful if the Secretary of State said whether he has determined the planning application, because the project depends on that as well, but my specific question is about the fact that he said in the statement that funding would be agreed in January. Does that mean that Halton borough council will be given funding to start work before 2015, and what savings is he looking for? A crucial element of this is tolls, which clearly must be at an acceptable level. We must remember that the current bridge is untolled and is a local road, so there is no scope for further income from tolls. There must be support from the Government through the funding arrangements.
Mr Hammond: I welcome the hon. Gentleman's comments. I have followed the scheme with particularly close interest, because it is a very innovative proposal by a local authority. It is a very big scheme for a local authority to propose, and it proposes to toll an existing road-never an easy thing to do in terms of local public opinion, so I commend it for being prepared to take difficult decisions. But with all the schemes that we have said today we will support, it is only appropriate that we sit down with local authorities, go through the numbers, go through the specifications and see whether there is any more cost to be driven out. Some schemes are sitting in the Department's books with an estimate of costs that was made in 2007. A lot has changed in the contracting market since then, and we want to ensure that right the way down the supply chain everyone is feeling the pressure that we are feeling as public spending is constrained-that we get the very best value for every pound of taxpayers' money. We will work with the local authority to ensure that that is the case.
Jackie Doyle-Price (Thurrock) (Con): The decision to postpone the work on junction 30 will be met with much dismay by my constituents in Thurrock, whose road network is very regularly clogged up by congestion caused by junction 30. It is also a major cause of disruption for users of the Dartford crossing. In view of that, does my right hon. Friend really think it fair to be considering increasing charges for the Dartford crossing?
Mr Hammond:
Yes. My right hon. Friend is referring to junction 30 of the M25, a scheme that we cannot envisage being able to finance during the current spending review period but on which we will continue to do work
with a view to development in future spending review periods. She will be aware of the interface with the proposals for the port development being progressed by Dubai Ports World, whereby funding contributions may be available to support some of the junction 30 improvement at some point in the future, depending on the progress of the port development. So the position with that project is slightly more complex.
Mrs Jenny Chapman (Darlington) (Lab): I am pleased to hear Government Members, particularly the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) and the hon. Member for Thirsk and Malton (Miss McIntosh), arguing in favour of the upgrading of the A1 north of Leeming. It is a crucial link for economic development in the north-east, and my constituents can conclude only that the Government looked at the link and decided that the north-east just is not worth it.
Mr Hammond: The announcements made both today and last week by my right hon. Friend the Chancellor have contained significant investments in the north-east, but I have to tell the hon. Lady that we consider all these schemes objectively. From memory, I think that the A1 Leeming to Barton scheme had a benefit-cost ratio of less than two, and it is not a scheme that we can envisage being able to fund in the current circumstances during this spending review.
Nick de Bois (Enfield North) (Con): My constituents will warmly welcome the planned improvements to the M25 between junctions 23 and 27, which will play a significant part in our regeneration plans along the eastern corridor. Will my right hon. Friend also consider taking representations both from the local authority and me, as we are keen, with an eye to the future, to see the northern gateway access road, which will additionally provide greater infrastructure for our growing needs?
Mr Hammond: I hope that my office told my hon. Friend that I visited the M25, including junctions 23 to 27, this morning, and jolly wet, windy and congested it was, so I am sure that the scheme will be most welcome. I am not aware that we have received a funding bid for the northern gateway scheme. As I said earlier, speculative schemes that are not already in the system will now have to wait until we announce a further round of bidding, and then there will be an opportunity to bid for further schemes in future spending review periods.
Mr Stephen Hepburn (Jarrow) (Lab): I am sure that the Secretary of State will understand my disappointment that the junction schemes on both sides of the Tyne tunnel have been shelved for the time being. Those junctions are important. The Tyne tunnel is in the process of being dualled, which will encourage substantially more traffic in the area, and the junctions are needed to keep the traffic flowing. Will he meet me and my hon. Friend the Member for North Tyneside (Mrs Glindon), whose constituency is also affected by the increase in traffic, so that we can discuss these issues?
Mr Hammond: I am happy to receive a representation from the hon. Gentleman. Of course, the promoting local authority must be the primary conduit for contact with the Department, but if he wants to meet me, I am happy to talk to him.
Stephen Williams (Bristol West) (LD): I welcome the fact that value for money is being confirmed for the Bristol bus rapid transit scheme from Ashton Vale, which is in your constituency, Madam Deputy Speaker, to Bristol Temple Meads, which is in mine. However, following what the Secretary of State said earlier about localism, will he agree to look favourably on local authorities such as Bristol that wish to introduce a levy on workplace parking in the future, so that money raised locally can be matched with the limited resources that are now available nationally?
Mr Hammond: Where local authorities wish to impose workplace parking levies, they need the Secretary of State's approval under current legislation. It is, of course, up to local authorities to promote such schemes if they feel that they are appropriate for their areas, but I have said recently that I would expect any further schemes proposed to me to demonstrate that they have properly and effectively consulted local businesses and addressed any proper concerns raised by local businesses during those consultations. So perhaps my hon. Friend can feed that back to Bristol city council.
Rachel Reeves (Leeds West) (Lab): The Leeds rail growth package included a new railway station at Kirkstall Forge. Half of the money was to come from the private sector and would have facilitated private sector housing and business development, bringing hundreds of jobs and homes to one of the most deprived parts of the city. Why has the scheme, which the right hon. Gentleman says is good value for money, been sent back to the drawing board, with devastating prospects for jobs and homes in my constituency?
Mr Hammond: Dear, dear, it must be my ears again. I did not hear the hon. Lady mention the Leeds station southern access scheme, which has been approved- [Interruption] If I may say so to the hon. Lady, when one's constituency is in a city, I think one will find that the effects of transport infrastructure improvement are a little wider than the narrow boundaries of a single constituency. Leeds station southern access scheme has been approved, and two further Leeds schemes, the Leeds rail growth package and the Leeds new generation transport scheme, have been included in the development pool, where we will work with the local authority to look at how we can ensure value for money and get the schemes into the best and most competitive form that they can be, after which we will make a decision on the allocation of the scarce capital that is available. I want to remind the hon. Lady one more time that the transport capital budget has been reduced by 11% for the next four years. The Government formed by her party before the last general election proposed to reduce capital spending by 50%.
Julian Sturdy (York Outer) (Con): I thank the Secretary of State for the improvement that he has made to fairer transport funding for my region, Yorkshire and Humber. May I ask him about the time scales for best and final funding bids for the schemes in the development pool? Will he look closely at the Access York park and ride bid, which will be crucial to the local economy?
Mr Hammond:
Access to York park and ride is included in that group of schemes. As I announced earlier, we intend to take decisions on which of those schemes will
be funded by the end of 2011. We will work proactively with the local authorities sponsoring those schemes from now, and we will make decisions as we are able to do so, not necessarily in a single announcement at the end of 2011. It may be possible to announce some conclusions earlier than that.
Mr Clive Betts (Sheffield South East) (Lab): To try to take the positives out of the statement, I welcome the go-ahead for Sheffield's PFI highway maintenance scheme and the amber light for the additional vehicles for Supertram. I understand that the passenger transport executive has proposed that the scheme should go hand in hand with the tram-train trial, as there will be cost savings from purchasing the vehicles together. That scheme is not mentioned in the statement. It could utilise under-used rail lines, get vehicles into the heart of the city and act as a pilot for the rest of the country. Will that scheme go ahead as well?
Mr Hammond: I understand that my ministerial colleagues are aware of the scheme to which the hon. Gentleman refers and are actively looking at it, but it is the Supertram additional vehicles scheme that has been included in the development pool. If it is clear that there are synergies from linking this scheme to another scheme, it makes sense to examine that. I want to be pragmatic. If we can save money, I would certainly like to look at the opportunities to do so.
Anne Marie Morris (Newton Abbot) (Con): Although I am delighted to see that so many schemes have been approved for Devon, I know that my constituents and those in Totnes and Torbay will be disappointed that the Kingskerswell bypass is only in the pre-qualification pool, because the value for money is not clear. Will the Minister meet me and representatives of the other two constituencies and Devon county council to go through the criteria that the Treasury and the Department for Transport have set out, so that we can understand why value for money is not clear and make the right representations?
Mr Hammond: My hon. Friend might have slightly misunderstood the pre-qualification pool. It is not that the Kingskerswell bypass does not meet the value for money criteria; it is that the Department does not have an up-to-date appraisal of the scheme. It will therefore now carry out a rapid assessment in which value for money will be one of the primary considerations. There will be opportunities for her local authority to engage with officials in the Department-I am sure they are already engaged. I know that she has had discussions already with my the Under-Secretary, my hon. Friend the Member for Lewes (Norman Baker), and I am sure he would be happy to have further discussions with her.
Alex Cunningham (Stockton North) (Lab): The cuts mean dark days ahead for the north-east, and they will be even darker now, with the decision to axe the Durham and Stockton street lighting PFI scheme, which would have made our streets lighter, brighter and safer. Why is the north-east and my constituency, which has already lost its new hospital and Building Schools for the Future programme, in the Government's sights for yet another major cut?
Mr Hammond: We have confirmed the massive funding for the Nexus metro upgrade. The issue is not about cuts, but about investing where the best value for money can be delivered, and the Tees Valley bus scheme will be accelerated to provide additional and early support to the towns in the Tees valley. The PFI scheme to which the hon. Gentleman refers is simply no longer affordable. These PFI schemes, as he will know, are very expensive and would involve the Department committing for 30 years to a significant revenue stream, which it is just not sensible and prudent in the current environment.
Stuart Andrew (Pudsey) (Con): I thank my right hon. Friend for the statement and, particularly, for his investment in the southern access to Leeds station, which will help to regenerate the southern part of the city. When he assesses the trolley bus system, will he look at the fact that, when it comes to an integrated transport system, Leeds has been led down the garden path for the past 20 years? I ask him to give significant consideration to that, because once people get into Leeds we need to get them around the city.
Secondly, I support some of the comments that the hon. Member for Leeds West (Rachel Reeves) made-perhaps not in the same way as I would have-with regard to the Kirkstall Forge and Apperley Bridge project, which would not only release significant amounts of private investment, but help to relieve significant congestion in some of the busiest parts of the city.
Mr Hammond: Both schemes to which my hon. Friend refers are in the development pool, and I urge him to urge his local authority to engage very seriously with that process, to sharpen the pencil, to think innovatively and to come back with a funding bid that puts those schemes in the vanguard and ensures that they are funded when we appraise the bids
Bill Esterson (Sefton Central) (Lab): I welcome the news that the Thornton to Switch Island relief road will be funded, but will the Minister clarify what he means by revised funding bids from local authorities? Sefton council has already put almost £6 million towards the project and is "maxed" up to the limit, so to speak, so it is difficult to see how it could find further funds. However, in response to an earlier question the Minister said that money might be released from savings elsewhere. Could that money be used to reduce Sefton's overall bill? Does he see it going up or down?
Mr Hammond: I can safely say that any local authority that comes back with a revised bid offering less local contribution is unlikely to be looked upon favourably. The Thornton to Switch Island link is a very high value scheme, delivering staggeringly high benefits for every unit of cost, but even so it is right that we sit down with the local authority and look at the cost estimates. As I said a few moments ago, some were done at a time when the contracting market for construction works was much firmer than it is now, and we must ensure that every opportunity to drive out cost and drive up value for the taxpayer has been taken. That is what the process will be. It will not take very long, because we expect to be able to undertake the work over the next couple of months and to confirm funding in January.
Madam Deputy Speaker (Dawn Primarolo): Order. We have taken 30 Members' contributions so far, and the statement is running rather longer than it should. I really would try to persuade Members to ask very short questions, because then we will get everybody in. I shall not call anybody who came in after the statement was given.
Mr Marcus Jones (Nuneaton) (Con): I welcome the statement and the Government's commitment to invest in our transport infrastructure. In doing so, I should like to be a little parochial, however, and mention the Coventry-Nuneaton rail upgrade, which will be extremely important in opening up further job opportunities for my constituents in Nuneaton, many of whom depend on Coventry for their employment. Is the Secretary of State willing to meet me to discuss that vital project, along with officials from Warwickshire county council?
Mr Hammond: That is the third representation that we have had on the Coventry-Nuneaton rail upgrade this afternoon. I would be very happy to meet my hon. Friend, and may I tempt him to include Opposition Members who have an interest in this? He and they are welcome to come along and talk about it.
Gavin Shuker (Luton South) (Lab/Co-op): Does the Minister understand the concern that he will cause in Luton and the surrounding areas by his shelving of the A5-M1 link road to the north of Luton, which is vital not only for improving transport but for solving our housing problems? Those housing problems will be even more acute in the coming years because of the coalition's policies, which will force London residents out to places such as Luton.
Mr Hammond: The A5-M1 link road has not been shelved: it is a scheme on which we will do further development work. From memory, the issue involves the possibility of a significant developer contribution and the building of the road will open up significant amounts of developable land. We will need to do some further work to ensure that we extract the maximum possible developer contribution and that the public purse is not left to pick up a cost that should properly be borne by the private sector.
Mr Mike Hancock (Portsmouth South) (LD): May I declare an interest as a member of Portsmouth city council? I thank the Secretary of State for his statement and commend to him the scheme for the Tipner interchange, which is in the pre-qualification pool. This scheme already has planning permission and is up and ready to go. It would generate thousands of jobs and create up to 2,500 homes. May I ask for the rapid transportation of that scheme from the qualification pool to the development pool in January, so that we can have a decision in the middle of next year?
Mr Hammond: If the fundamentals of the scheme justify its promotion to the development pool, it will be so promoted.
Mrs Mary Glindon (North Tyneside) (Lab):
I thank the Minister for agreeing to meet my hon. Friend the Member for Jarrow (Mr Hepburn) and me, and I welcome
the upgrade of the Tyne and Wear metro, but people need jobs to travel to. The A19 corridor is crucial to the north-east's economic development. Given the importance of the tunnel opening in 2011 and the two junctions on either side being improved, will the Minister increase the size of the meeting to include some business people and councillors who will also be able to make that case ably?
Mr Hammond: I am always happy to hear from the business lobby and the most convincing arguments often come from members of the business community. The hon. Lady makes the case that investment in transport infrastructure is good for economic development, job creation and inward investment. We know all that; the problem is that we have to prioritise the capital funding that we have available. The only fair way to do that is to look at the value for money that different schemes return for taxpayers' funding and ensure that we prioritise them accordingly.
Robert Halfon (Harlow) (Con): Harlow commuters will welcome the expansion of the M25 up to the M11, but the Minister will be aware of my Westminster Hall debate earlier this year in which I called for an extra M11 junction, which our town desperately needs. It would cost up to £25 million, and Essex county council is undertaking a £500,000 study of that project. What hope can he give my hard-pressed commuters that that scheme will be considered in the future?
Mr Hammond: I commend my hon. Friend for his tenacity. I know that he campaigned on this issue for many years before he arrived in this place, and he will no doubt continue to campaign on it for many years to come. The scheme is not currently on the list that I have published today and, as I have said to other hon. Members, it will be some time before we open the list to additional bids for future spending review periods. I do not want to encourage local authorities to spend significant sums of taxpayers' money on schemes that I know we will not be able to fund in the foreseeable future.
Phil Wilson (Sedgefield) (Lab): On "Question Time" last week, the Secretary of State raised expectations in the north-east on the Intercity Express programme and the potential for the building of a factory by Hitachi in Newton Aycliffe in my constituency. How long will we have to wait for a decision on that? It has raised expectations in the area, but will we get a response before Christmas?
Mr Hammond: I hope so. I said at the beginning of my statement, but perhaps I was being obtuse, that other major rail projects are under consideration, and I hope to be able to make an announcement to the House in the next few weeks. The Intercity Express programme is one of those under consideration. As the hon. Gentleman will know, it is an extremely complex package of projects, and the new bid that we have received from Agility Trains requires careful analysis at a technical, financial and legal level. That work is ongoing, and once we have completed it, I will be in a position to make an announcement.
Dr Sarah Wollaston (Totnes) (Con):
The Kingskerswell bypass in my constituency has been tantalisingly close to approval for half a century, which must be a record. I
am grateful to the Secretary of State for agreeing to meet a delegation from Devon and Torbay councils, because the scheme is vital to regeneration for three constituencies. What further evidence should they bring to that meeting to press their case?
Mr Hammond: As I hope I have made clear, the process for the appraisal of projects is pretty rigorous, and will be based on the cost-benefit analysis and the external non-monetiseable effects of the scheme. If my hon. Friend looks on the Department for Transport's website, she will find chapter and verse on how we do it. Of course I will always be happy to talk to hon. Members about their schemes, but I can assure her that the process for appraising schemes in the pre-qualification pool will be done rapidly and objectively, and the best schemes will move up into the development pool for consideration for funding next year.
Chris Leslie (Nottingham East) (Lab/Co-op): Will the Secretary of State now publish the assessment to which he alluded earlier of the A453 in Nottinghamshire, which he suggested was on a lower value-for-money assessment? That is certainly not the feeling of Members on both sides of the Chamber. Although it might have the hallmarks of a country lane, it is a massive priority for businesses in the east midlands, and he is leaving them with the impression that he has no plans for jobs or growth.
Mr Hammond: I do not think that is the impression that businesses in Nottinghamshire will have been left with. I know the A453 very well, and I am well aware of the problems that occur in the area. The Under-Secretary of State for Transport, my hon. Friend the Member for Hemel Hempstead (Mike Penning), who has responsibility for roads, has already made a commitment to the House that we will in due course publish the business cases for both successful and unsuccessful schemes, so that Members can understand exactly how we have arrived at our conclusions.
Madam Deputy Speaker: Order. I will take the last five Members, because they have been waiting very patiently, but I ask them and the Secretary of State in reply please to be very brief.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con): I want quickly to congratulate the Secretary of State on how much he has achieved for transport in these straitened economic times. In particular, I welcome his commitment to the Heysham port to M6 link road, which I assure him has the full support of Lancashire county council and Lancaster district chamber of commerce. Will he assure me that his Department will be as proactive as possible to ensure that we see a completion date for this scheme, which has been on the table for the past 30 years?
Madam Deputy Speaker: Thank you, Secretary of State. I call David Rutley.
David Rutley (Macclesfield) (Con): What view has my right hon. Friend's Department formed of the long-term prospects of the south-east Manchester multi-modal strategy, the A6 to Manchester airport relief road? Will he set out what steps he will be taking to review the relative merits of that scheme?
Mr Hammond: My ministerial colleagues are telling me-there are a lot of schemes to file in our minds-that this was going to be a private finance initiative scheme. However, PFI funding will no longer be available in the way it was, so if the scheme is to go forward, it will need to be resubmitted for conventional funding.
David Mowat (Warrington South) (Con): Like Members on both sides of the House, I am delighted that the Secretary of State has found the money for the Mersey Gateway. However, the fact that it will be tolled-it has not been historically-will divert large amounts of traffic through inter alia my constituency. The level of traffic that will be diverted is sensitive to the toll set. Will he assure us that his Department will do what it can to ensure that the toll is not used to raise additional money over and above that needed to construct the bridge, and is not increased as part-
Madam Deputy Speaker: Order. Thank you very much. Will the Member please resume his seat? I think the Secretary of State got the gist of his question. It was not brief though.
Mr Hammond: I understand my hon. Friend's concerns. This issue must of course primarily be a matter for the promoter of the scheme, which is Halton borough council. However, I am not sure that the local authority is totally unconstrained in setting a charge for the bridge, which will have to be related to the costs of delivering the scheme, so I will check that and write to my hon. Friend.
Martin Vickers (Cleethorpes) (Con): It is disappointing that the two schemes affecting the port of Immingham will not proceed in the immediate future. Can the Secretary of State give me an assurance that if the south Humber gateway project, which was granted planning permission only two weeks ago, proceeds more quickly than anticipated, he will seriously consider bringing forward the A160 upgrade?
Mr Hammond: At least one of the schemes to which my hon. Friend refers is in the development pool. We will continue, as I hope he will, to work with his local authority to sharpen the bid and ensure that the scheme is viable for funding when we look at such matters in 2011.
George Eustice (Camborne and Redruth) (Con): One of the projects that is currently in the pre-qualification pool is the Camborne and Redruth transport package, which would unlock the potential for regeneration and create 6,000 new jobs. Can the Secretary of State give an assurance that those projects that have today been announced as being in the pre-qualification pool will not be disadvantaged by joining the development pool at a later date, should that happen?
Mr Hammond: Yes I can give my hon. Friend that assurance. The intention is to carry out the pre-qualification assessment over the next three months, with a view to some schemes moving from the pre-qualification pool to the development pool in January 2011. That will give them plenty of time to make their case for funding before the end of 2011, when the decisions are taken.
Madam Deputy Speaker: Thank you. That was 43 Members contributing, but it would have been easier if they had all been brief.
Points of Order
5.11 pm
Clive Efford (Eltham) (Lab): On a point of order, Madam Deputy Speaker. I do not expect an answer to this point of order today, but I wonder whether you can seek clarification through Mr Speaker regarding the release of Government statements to the Liberal Democrats prior to their being made in the House. Members on the Liberal Democrat Benches have no higher status than Back Benchers on the Opposition Benches. The last time I looked, the hon. Member for Lewes (Norman Baker) was the transport spokesman for the Liberal Democrats, and he is now sitting on the Government Benches as the Under-Secretary of State for Transport. I would like to know whether what has happened is common practice. Has it happened before, exactly what can we expect in the future, and will Mr Speaker look into it?
Madam Deputy Speaker (Dawn Primarolo): That is not really a point of order for me in the Chair. However, the hon. Gentleman has got his point on the record, and I understand that the Secretary of State wants to be helpful to him.
The Secretary of State for Transport (Mr Philip Hammond): I, too, heard a reference to a copy of my statement having been received by one of my hon. Friends. I suspect that they were referring to the list, which was placed in the Vote Office a few moments before. As far as I am aware, no copies of the statement were distributed before I rose to speak.
Madam Deputy Speaker: Well, this is a matter that Mr Speaker can look at, and he can read the comments that have been made on the record. I do not know the answer at the present time, but I am grateful to the hon. Member for Eltham (Clive Efford) for bringing the matter to my attention.
Mr Bob Ainsworth (Coventry North East) (Lab): Further to that point of order, Madam Deputy Speaker. I would ask that the Speaker look into this-
Sir Gerald Kaufman (Manchester, Gorton) (Lab): Did you call me or my right hon. Friend, Madam Deputy Speaker?
Madam Deputy Speaker: I called Bob Ainsworth.
Mr Ainsworth: I would ask that the Speaker look into this matter. It became pretty apparent that Back Benchers were not being treated equally. There are, it seems, pretend, shadow Liberal Democrat Ministers in the House, but they should surely not be given privileges over other Back Benchers. I would have thought that it was a matter for the Speaker to see whether Members were being treated with some kind of fairness and equality.
Madam Deputy Speaker: I have given my answer in response to that point of order. The Secretary of State has been helpful by pointing out that, as far as he is concerned, what the right hon. Gentleman has described should not have happened, and there are no special arrangements. Mr Speaker will be able to look at the points that have been raised and decide whether this is a matter that he needs to address. I think that that is all that we can deal with at this point.
Sir Gerald Kaufman: On a point of order, Madam Deputy Speaker. I want to raise a matter that relates to the rights of hon. Members of this House. Thursday next week will be the 15th anniversary of the assassination of Yitzhak Rabin, the Prime Minister of Israel. I sought to table an early-day motion commemorating the event, and took it to the Table Office. Its heading was "Yitzhak Rabin, Assassinated Peacemaker". That he was assassinated is incontrovertible, as his murderer is serving a prison sentence for killing him. That he was a peacemaker is incontrovertible as he was awarded the Nobel peace prize the year before he was assassinated. Yet the Table Office sought to get me to remove the words "Assassinated Peacemaker" from the title and, when I demurred, said that it would need to be discussed. I heard nothing further from the Table Office and, that being so, assumed that the early-day motion would be on the Order Paper today. It was not. When I inquired about it, I was told that nothing whatever had been done about it. I have studied "Erskine May", and there is nothing whatever in it that gives the Table Office the power to amend or change the title of an early-day motion in that way. The rights of hon. Members are at stake, because if we cannot say what is true and incontrovertible in an early-day motion without it being liable to being amended, then where are we, Madam Deputy Speaker? I seek to be allowed to table my early-day motion, with its title, in the way that I drafted it.
Madam Deputy Speaker: I am grateful that the right hon. Gentleman has raised this point of order with me. I am not able to respond immediately, but I hope that he will agree that I can look into the matter-it might be a matter that Mr Speaker will want to consider directly-and that we come back to him as quickly as possible.
Sir Gerald Kaufman: Further to that point of order, Madam Deputy Speaker. I thank you for that, but when you say "as quickly as possible", how quickly is that? The Table Office did not come back to me at all. The anniversary is next week, and the motion has already been delayed. It is not a matter of amour propre on my part that the House of Commons can commemorate the assassination of a great man.
Madam Deputy Speaker: I have given the right hon. Gentleman my word that I will look into the matter. I am currently on duty in the Chair, and will remain here for a little longer. As soon as I leave the Chair, I will start inquiring into the points that he has made and get back to him as quickly as I possibly can. Perhaps we can now move on, as we have a ten-minute rule Bill.
Parliament (Amendment)
Motion for leave to bring in a Bill (Standing Order No. 23 )
5.17 pm
Mr Christopher Chope (Christchurch) (Con): I beg to move,
That leave be given to bring in a Bill to make further provision to limit the size of the legislature by ensuring that the number of peers entitled to vote in the House of Lords does not exceed the number of parliamentary constituencies; to introduce a statutory limit on the number of Ministers, Whips and Parliamentary Private Secretaries in each House of Parliament; and to set a maximum proportion of Ministers, Whips and Parliamentary Private Secretaries in the total membership of each House of Parliament.
The Bill follows on from our debate in the House yesterday evening on the new clause that was so ably proposed by my hon. Friend the Member for Broxbourne (Mr Walker) during our deliberations on the Parliamentary Voting System and Constituencies Bill. I do not know whether you were able to follow it, Madam Deputy Speaker, but it was a vintage debate, in which my hon. Friend was supported by the Father of the House, my hon. Friend the Member for Louth and Horncastle (Sir Peter Tapsell), as well as my hon. Friends the Members for Richmond Park (Zac Goldsmith) and for Harwich and North Essex (Mr Jenkin) and many others.
My hon. Friend the Member for Broxbourne made the case for constraining the size of the Executive as a proportion of the membership of the House. For example, he said that if the number of MPs was reduced to 600, the maximum number of Ministers should be reduced from the present maximum of 95 to 87. He also said that that was hardly the most radical proposal. He and I both expected a lot more support from our own side in the Lobby, and I am sure that there would have been, had there been a free vote, or indeed anything other than a strong three-line Whip. I know that one of my hon. Friends who supported the new clause was seen being dragged away to the Whips Office to be dealt with. That is part of the background to this Bill.
In what is generally agreed to have been one of the lamest responses from the Front Bench in years, the Parliamentary Secretary, Office of the Leader of the House of Commons, the hon. Member for Somerton and Frome (Mr Heath), was reduced to expressing sympathy to my hon. Friend the Member for Broxbourne, while arguing a case for prematurity. Those of us who have been Members of this House for some time know that when all other arguments have failed, the argument of prematurity is the last desperate throw.
In yesterday's debate, my hon. Friend the Member for Richmond Park quoted what the Prime Minister had said in February this year when he was the Leader of the Opposition:
"We'd want to reduce the power of the executive and increase the power of Parliament even if politics hadn't fallen into disrepute."
My hon. Friend argued that the Government should do what the present Prime Minister promised to do in advance of the general election. He also quoted the Deputy Prime Minister and other leading figures in the Government.
Why, then, is it premature to reduce the power of the Executive? The only reason it is premature is that the Executive say that it is premature. I think that reducing
the power of the Executive is long overdue and that the arguments that applied before the general election apply even more strongly now. When presented with their own self-proclaimed path of virtue, however, the coalition Government have not merely said "Not yet", but made things worse by increasing the size of the Executive.
When I was first elected in 1983, 81 Members of Parliament were Ministers, of whom 13 were Whips. Today, 95 MPs are Ministers, of whom 17 are Whips. Even under the last Labour Government, only 90 MPs were Ministers, of whom 15 were Whips. What has happened in this Parliament is that the new Government have increased the number of Ministers and the number of Whips.
Chris Ruane (Vale of Clwyd) (Lab): Will the hon. Gentleman give way?
Mr Chope: As I understand it, I am not able to give way during a ten-minute rule Bill. I am supposed to have 10 minutes, but I keep looking at the clock wondering how many minutes have expired- [Interruption.] Five minutes-
Madam Deputy Speaker: Order. The hon. Gentleman's 10 minutes will be up at 5.27 pm.
Mr Chope: I am grateful, Madam Deputy Speaker. I am sure that a number of Members will not be able to reach that moment soon enough. [Hon. Members: "Hear, hear."]
Let us be clear: Ministers come with a high price tag. Lord Turnbull told the Public Administration Select Committee earlier this year that the average cost of a Minister was £500,000 a year. That is not his salary, but the costs of the private secretary, the office and all the rest that goes with it. Despite being committed to making savage cuts in public expenditure, however, the Government are in denial of the increased costs that the Government have incurred by increasing the number of Ministers.
On 18 October, I asked the Minister for the Cabinet Office if he would
"estimate the annual cost to the public purse of the change in the number of Ministers and Whips drawn from the House of Commons since the dissolution of the previous Parliament."-[ Official Report, 18 October 2010; Vol. 516, c. 516W.]
I expected an answer along the lines of, "We reckon there are five extra Ministers, as a result of which, with each costing about £500,000, it works out at about £2.5 million". In fact-this is on the record-my right hon. Friend did not answer the question at all. He avoided it completely and talked about how Ministers had taken a pay cut. That was not the question I put to him. I use that as evidence that even at the centre of this Government-in the Cabinet Office itself-they do not want to face up to the consequences of their own actions.
Another part of my Bill deals with the number of peers in the House of Lords: currently, there are 777. Since the general election, 56 new appointments have been made, and another 50 are proposed to be recruited imminently, with further additions proposed to comply with the coalition's commitment to have the same proportion of Conservative and Liberal Democrat peers in the House of Lords as the proportion who voted for those parties in the general election. According to the
maths that I have done on the back of an envelope, to get a proportion of 59% of the 777, an extra 186 peers would have to be appointed, bringing the total to 963. If there was no reduction in the number of Labour Members, to produce 59% of the higher figure of 963 we would have to produce the best part of another 100 peers. In the short term, therefore, it seems to be coalition Government policy to increase the number of Members of the House of Lords by no fewer than 250, which is absolute lunacy. Meanwhile, contrary to all the representations made by various Committees of the House, the number of Parliamentary Private Secretaries is 32 and rising. Over the years, many people have suggested that there should be no more than one PPS per Department, but the Government have ignored all that.
The Bill is a framework Bill. Similar Bills have been put before the House previously, and I go forward confident in the knowledge that my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith), the hon. Member for Taunton Deane (Mr Browne) and Mr Speaker himself have argued a similar case to that which I advance today. I have 12 supporters for the Bill, and following last night's debate I could have accommodated more, but the rules of the House prevent me from having more than 12. I am grateful to all my hon. Friends who have offered to support my Bill but who cannot be included in the 12 -the Bill will have many more supporters in due course.
That Mr Christopher Chope, Mr Graham Brady, Mr Richard Shepherd, Mrs Eleanor Laing, Mr Mark Field, Mr Andrew Turner, Mr Robert Syms, Martin Vickers, Mr Philip Hollobone, Graham Stringer, Tristram Hunt and Mr Charles Walker present the Bill.
Mr Christopher Chope accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 4 March and to be printed (Bill 97).
Savings Accounts and Health in Pregnancy Grant Bill
5.28 pm
The Financial Secretary to the Treasury (Mr Mark Hoban): I beg to move, That the Bill be now read a Second time.
The Bill does three things: it ends eligibility for child trust funds for children born from January 2011 onwards; it repeals the Saving Gateway Accounts Act 2009, following our decision not to introduce the saving gateway scheme; and it abolishes the health in pregnancy grant, again from January 2011. I will explain the detail of the measures shortly, but first I want to explain the rationale behind them, because they all have the same aim of helping to reduce Britain's budget deficit.
As my right hon. Friend the Chancellor of the Exchequer set out clearly last week, the Government have inherited an exceptional fiscal challenge. Last year, we had the largest peacetime deficit in our history, and we were borrowing £1 in every £4 that we spent. We are now spending £120 million a day just to pay interest on our debt. As the Governor of the Bank of England said last month, that position is "clearly unsustainable". Taking urgent action to tackle the budget deficit is clearly unavoidable.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab): Can the Minister tell me why this coalition Government are so determined to pick on children?
Mr Hoban: In September 2009 Carl Emmerson, acting director of the Institute for Fiscal Studies, said:
"Abolishing the Child Trust Fund would make newborns worse off in eighteen years time. But spending cuts in other areas might leave them worse off."
That is the challenge that the coalition Government face. This is the question that the hon. Lady should be asking: why did her right hon. and hon. Friends leave the country in such a mess that the present Government are required to take these measures?
Without healthy public finances, we cannot have sustainable growth in our economy. The consequence of failing to act now would be higher interest rates, business failures, rising unemployment and even, potentially, the end of the recovery. So we set out a clear plan, in the Budget statement in June and in the comprehensive spending review statement last week, to tackle the deficit. Last Wednesday the Chancellor set out more than £80 billion of spending reductions to help to deliver the Government's fiscal consolidation plan, which will reduce borrowing by £11 billion per year by 2014-15. The International Monetary Fund has said that our plan
"greatly reduces the risk of a costly loss of confidence in fiscal sustainability and will help rebalance the economy."
The Bill is part of that plan.
I realise that the changes made by the Bill will disappoint some Members and others outside the House. Indeed, when we were in opposition, the Conservative party supported the introduction of the policies that have been removed, although at the time we raised some questions about their effectiveness.
Alison McGovern (Wirral South) (Lab): The Minister has talked about what happened in the past and about the actions of the last Labour Government. Will he tell us whether his party supported the recapitalisation of the banks that protected our financial services system, which led to the deficit?
Mr Hoban: Yes, we did support the recapitalisation of the banks, but I am not sure where the hon. Lady's point is leading. The deficit is a consequence of the huge growth in spending under the last Government, and their failure to ensure that the fiscal position was sustainable.
This year, the child trust fund would have cost more than half a billion pounds, and that money would have been locked in for up to 18 years instead of supporting people now. That is a luxury that we simply cannot afford, given the fiscal challenge that we face. We also could not afford to introduce a new scheme like the saving gateway, which would have cost £300 million over the next five years, just as we started to tackle that challenge. Nor can we afford to continue to spend £150 million every year on giving cash payments to all pregnant women, whatever they spend the money on and whatever their incomes.
Mr Andrew Love (Edmonton) (Lab/Co-op): Would not the Minister's position have more credibility if he proposed ways in which he could encourage families to save? Such proposals were included in the Bills that he is about to abolish.
Mr Hoban: If the hon. Gentleman cares to stick around for a few minutes, he will learn something about what we are going to do for families in that regard. I believe that this Government will do more than the last Government in terms of long-term benefit to encourage families to save.
Taken together, the changes that we are making to child trust funds, the decision not to introduce the saving gateway, and the abolition of the health in pregnancy grant will save us £370 million in the current financial year, about £700 million next year, and about £800 million in each year from then on.
Mr Love: According to an excellent research brief provided by the House of Commons, the Government will save £450 million in future years in relation to the saving gateway. However, the Minister has just admitted that it has not been introduced. How is it possible to save £450 million on a scheme that has not been introduced?
Mr Hoban: Spending on that scheme was included in the spending score card by the last Government. We are not spending the money; therefore we are saving it.
If we had not found the savings where we have found them, we would have had to find them through other spending cuts, through tax rises or through higher borrowing, and that would have kept the deficit higher for longer. Those who oppose the Bill must tell us what they would cut instead.
Having explained the context of the Bill, I shall now describe its measures in more detail starting with the most straightforward element, which is clause 2. It repeals the Saving Gateway Accounts Act 2009. As Members may be aware, the saving gateway would have
been a cash saving scheme for people on lower incomes based on matching-there would have been a Government contribution for each pound saved. The scheme was due to be introduced in July 2010; that is when the previous Government booked the spending from. I believe that people in Britain, including those on lower incomes, need to save more, and there was evidence from the saving gateway pilots that matching was a popular and easily understood incentive to save, but when we looked at the proposal ahead of the Budget, it was clear that this would have been exactly the wrong time to introduce a new scheme that would have cost us up to £115 million a year.
Mr Jamie Reed (Copeland) (Lab): I was grateful for the support the hon. Gentleman's party gave when in opposition to the then Labour Government's efforts to reduce child poverty. What assessment has his Department made of the effect of the withdrawal of these grants and schemes on child poverty in this country, not just in general but by region and constituency?
Mr Hoban: There was clearly a choice. We could have continued with these schemes and cut spending elsewhere, but we decided that it was better to take action now to tackle the deficit than to put that decision off, as the hon. Gentleman's party would do, and therefore have to make deeper cuts in the future. I think the steps we are taking are the right course of action to tackle the deficit.
Although the previous Government had agreed with RBS and Lloyds Banking Group that they would introduce saving gateway schemes, none of the other big high street banks were planning to do so, and although the Post Office was going to offer the accounts, that was only because the previous Government had agreed to pay it to enable it to do so. Also, while a number of credit unions were signed up, not a single building society signed up to provide the saving gateway account. Therefore, although I appreciate the engagement of those who had planned to offer saving gateway accounts, I was concerned that not everyone in the eligible population would have had an accessible provider. For these reasons, we announced at the Budget that the saving gateway would not be introduced. We therefore stopped the Saving Gateway Accounts Act from coming into force, and this Bill repeals it altogether. Although we may want to come back to this idea at some point in the future, we have no plans to do so at present so it would be wrong to leave this legislation on the statute book.
Kate Green (Stretford and Urmston) (Lab): The Minister alluded to the fact that credit unions were particularly interested in supporting this initiative, and he will be aware that credit unions are particularly likely to be located in communities with high concentrations of disadvantage and poverty. Therefore, although he says the scheme's reach was not complete, does he accept that in fact it was potentially rather well targeted?
Mr Hoban: That assumes that there is a credit union in every deprived community, but in some such communities a credit union may not be accessible, and the Post Office would have stepped in only if a Government subsidy were provided, so I do not believe there was going to be a complete network of saving gateway account providers to ensure that every eligible person in this country would have been able to access an account.
Clause 3 addresses the health in pregnancy grant. It is a one-off cash payment of £190 to pregnant women. The previous Government said it was being introduced in recognition of the importance of a healthy diet during pregnancy. However, the National Childbirth Trust said that
"the evidence indicates that, if dietary intervention is to have an impact on birth weight and outcomes for the baby in later life, it should be started as early as possible."
Given that the grant is not paid until the third trimester, it is not clear how effective it is, and although-
Mr Hoban: Let me make some progress. Although the previous Government said the grant was intended to support the general health and well-being of women in the later stages of pregnancy, there is no requirement to use the grant for better health and well-being. Women can spend the money on whatever they want, and the grant also goes to pregnant women regardless of their income and their need for it.
Diana R. Johnson (Kingston upon Hull North) (Lab): It seems to me that that money was also for meeting the additional costs of having a baby. It was very much linked with women receiving advice from health practitioners too; there was a link between our making sure that women were getting the very best advice and their being able to access the money.
Mr Hoban: Well, other schemes are available to help women ensure that their diet is healthy. May I tell the hon. Lady what others have said about this one? Zoe Williams, writing in The Guardian in April 2009, said that this is
"a universal grant to mothers who may or may not need it, and may or may not spend it on vegetables that may or may not positively influence the health of their unborn children."
[Interruption.] I am simply quoting from The Guardian-I did not realise just how much outrage that would cause in the House. Paul Waugh, writing in the London Evening Standard in June 2010, said:
"The Health in Pregnancy Grant is frequently not even spent on healthy food."
Mr Deputy Speaker (Mr Lindsay Hoyle): Order. Look, I understand that this is an important matter and it concerns everyone in the Chamber, but it is no good everyone trying to chunter at once. The Minister has been very generous in giving way so far and I am sure he will be generous in the future. One at a time please, rather than chuntering from across the Benches.
"It is spent on absolutely anything the mother wants. A lot of middle class mums simply bung it towards a fancy new Bugaboo pram."
Yasmin Qureshi (Bolton South East) (Lab): Does the Minister know how much folic acid costs?
Mr Hoban: Clearly, if this grant was targeted at enabling women to buy folic acid, the argument would be different, but no strings are attached to this grant; money can be used in any way that people want.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab): The Minister says that this grant has not always been spent on what it was intended for and instead has been spent on things such as buggies-they are equally important. Would it not have been advisable then to have targeted it, by using, for example, income-related benefits, so that it went to people who really needed it and was spent on what it was intended for?
Mr Hoban: Of course the hon. Lady should really address that to her colleagues who were Treasury Ministers when the grant was introduced, as they could have chosen to target it more closely. Other grants that are available are targeted at women in the early stages of pregnancy and the Sure Start maternity grant is in place.
Mr Mark Field (Cities of London and Westminster) (Con): I accept the honourable way in which a number of Labour Members have stood up and are concerned, but does this not show that once we give any benefits they are taken for granted by whoever ends up receiving them? Does the Minister recognise, and will he confirm, that the Bill deals with only a small number of the grants that could be looked at by the Treasury? We have to get this deficit down and his opening comments have made a perfectly valid point. Will he confirm that he might well have examined a considerable number of other grants in this Bill, but it deals with only a small number?
Mr Hoban: My hon. Friend makes an important point. The Government have had to go through this challenging spending process with care, examining both spending and welfare decisions. We have had to take decisions that are not straightforward, not easy and not ones that we would have wanted to take, but we have had to do so because of the financial problem that we inherited from our predecessors.
Let me give another example of targeted support that is available, because the hon. Member for Washington and Sunderland West (Mrs Hodgson) talked about means-tested grants. I am sure that she will be aware of the Healthy Start scheme, which is a statutory scheme providing a nutritional safety net and encouragement for breastfeeding and healthy eating to more than 500,000 pregnant women and to children under the age of four in low-income and disadvantaged families across the UK. The scheme is tied carefully because, unlike the health in pregnancy grant, it provides vouchers for people to put towards the cost of milk, fresh fruit and vegetables, and infant formula milk at 30,000 retail outlets. So measures are in place to support the groups that she is most concerned about, and it is right that that is so. The health in pregnancy grant is unfocused and untargeted.
Liz Kendall (Leicester West) (Lab): The Healthy Start scheme is a good, targeted one, but will the Minister admit that the Government are also restricting the Sure Start maternity grant, abolishing the baby element of the tax credit and not going ahead with the toddler tax credit? Pregnancy and the first year of life is vital for a child's development; if we can give children the best start in life, it saves us all in the long run. So will he reconsider his abolition of these schemes?
Mr Hoban: Perhaps the hon. Lady would tell us what she would cut instead. It is very easy for the Opposition, who did not come forward with a plan to tackle the deficit before the last election. Now, every time a cut is proposed they oppose it. As was very clear from the leaked document in The Times today, they recognise themselves that their economic plan has no substance.
Pete Wishart (Perth and North Perthshire) (SNP): There is no doubt whatsoever that the Labour party left the country's finances in an appalling state, but why is the Conservative-led coalition taking it out on children and pregnant women?
Mr Hoban: If the hon. Gentleman looks at some of the analysis that was set out at the time of the Budget and last week's spending review, he will see that we are taking action in both to ensure that child poverty does not deteriorate under this Government. For example, there are increases in child tax credits to families on particularly low incomes to deal with the issue of child poverty.
Paul Maynard (Blackpool North and Cleveleys) (Con): Does the Minister not agree that the clue as to the purpose of the health in pregnancy grant lies in its title? It was supposed to promote health in pregnancy. Does he agree that there is no evidential base to suggest that in the seventh week of pregnancy onwards it was providing that improvement in health?
Mr Hoban: My hon. Friend makes an important point. I would say that the challenge is as follows. Other schemes are in place to help families on low incomes to deal with some of the issues around childbirth. I have talked about the vouchers that are available to help with nutrition and we have the Sure Start maternity grant, too, which is designed to help low to middle-income working families and out-of-work families to cover the one-off costs associated with having a new baby. There are measures out there, but, yes, they are restricted. The Sure Start maternity grant will apply to the first child-it is a grant of up to £500-but, of course, the problem is that the previous Government left us with a huge debt that we need to tackle and to pay back. If we put off these decisions, as the hon. Friends of the hon. Member for Leicester West (Liz Kendall) would want us to, it would be the poor who would pay the most. It would be those children who would be saddled with the debt that the previous Government left hanging around their necks.
Mr Mark Field: I have a two-and-a-half-year-old son, so I have had the benefit of some of these universal benefits. I must say that in these straitened economic times it makes sense for things to be targeted in a much more effective way. That is all that we are trying to do, and it is regrettable to see the way in which the Minister is being harangued by Opposition Members. We should be targeting these benefits; they should not be universal. This is entirely the right way forward.
Mr Hoban:
My hon. Friend makes an important point. We need to look very carefully at where money is spent and ensure that it is spent wisely in pursuit of improving the life chances of children and young people. That is why, for example, our right hon. Friend the
Deputy Prime Minister announced recently that we will extend to all disadvantaged two-year-olds 15 hours of free nursery care. That is a very targeted way of helping children from the most disadvantaged backgrounds to achieve their life chances. We have seen the pupil premium introduced, with £2.5 billion a year to help children from disadvantaged families. The coalition Government have set out plenty of measures that are focused on helping the most vulnerable in society. That is what we need to do in the light of this financial crisis: to target measures on those who need them the most, rather than simply opposing every cut for the sake of it, as the Opposition are trying to do.
Sheila Gilmore (Edinburgh East) (Lab): Does the Minister not agree that the logic of his position is that universal benefits should not exist? In that event, why are women and children being targeted for the loss of these universal benefits? Why not pensioners, who might not use their winter fuel allowance to pay their fuel bill? They might use it for something wholly inappropriate, such as buying a new pair of shoes or a piece of clothing. Why are women and children being targeted in this way?
Mr Hoban: The Labour party is clearly looking for more substance for its economic plan, and perhaps the hon. Lady's idea of tackling the winter fuel payment is something that the shadow Chancellor will embrace. I look forward to hearing whether those on the Opposition Front Bench will decide to adopt her idea or dissociate themselves from it.
Paul Goggins (Wythenshawe and Sale East) (Lab): The Minister is turning to support for the most disadvantaged. If there is one area that should unite all parts of this House, it is the welfare of looked-after children, most of whom arrive in care with nothing and leave care with nothing. If there is any group that needs to build up an asset base, it is children in care, yet the Minister is taking away at a stroke the possibility of building up an asset base by getting rid of the child trust fund. How can he, as a Minister, possibly justify his Government's claim that they are protecting the most vulnerable, when he is robbing children in care?
Mr Hoban: I am turning to child trust funds, and I take on board the right hon. Gentleman's point. As one of the consequences of our decision to scrap the child trust fund, we are using some of the money that we have saved to provide respite care for disabled children. We have thought carefully about the issues, and, frankly, the decisions are not easy to take. Our decision to scrap the child trust fund is important. It will enable us to deliver the pupil premium and the £2.5 billion package, which was recently announced, to support children from disadvantaged backgrounds. The right hon. Gentleman should look at the issue in the round rather than cherry-picking particular policy areas.
Toby Perkins (Chesterfield) (Lab): Will the Minister give way?
Mr Hoban:
No; I will continue. I have given way quite a lot, and I want to make some progress. This is an important Bill, which is why I want to ensure that I have given Opposition Members the opportunity to intervene,
but I want to continue setting out the case for why we need to take these measures to tackle the problem that the previous Government left behind.
We announced in May that Government payments to child trust funds would be cut in two stages-they will be reduced first and then stopped altogether. In July, we made regulations to take the first step. For those born from August this year, payments at birth were reduced from £250 to £50, or from £500 to £100 for children in lower-income families or children in care. Government payments at the age of seven also stopped completely from August. The regulations will end the additional payments made to disabled children from 2011-12 onwards, although, as I have said, we will recycle the money that we have saved on those payments to provide additional respite breaks.
Those regulations could not end eligibility for child trust funds altogether, because that process requires primary legislation. This Bill completes the process by ending eligibility for child trust funds for all children born from January 2011 onwards, which means that the remaining Government payments will stop altogether.
Sandra Osborne: Will the Minister give way on that point?
Mr Hoban: No; I want to make some more progress.
I realise that many people, including some hon. Members, will find these changes disappointing. As I have explained, however, the child trust fund is simply unaffordable given the deficit that we face and the need to focus our resources on supporting people now.
Although we need to reduce spending on the child trust fund, we remain committed to encouraging people to save. I want to see a saving system that is based on our principles of freedom, fairness and responsibility, as well as being affordable and effective.
Mr Christopher Chope (Christchurch) (Con): I am with my hon. Friend 100% on the principle that he has just enunciated. Will he clarify the issue of encouraging people to save for their further and higher education? If they do so, they will apparently be penalised under the coalition Government's proposals if they pay their fees upfront having done the right thing and saved for their education. Is that correct? If so, how is it consistent with what he has just said about our commitment to encouraging a savings culture?
Mr Hoban: My hon. Friend has made an interesting point. We want to encourage more young people to save and to give them some assets at the age of 18. I will look into his point and write to him.
As I have said, the saving gateway and the child trust fund are not affordable given the budget deficit that we inherited, so we are taking a different approach to encouraging saving that builds on the latest research on how to influence people's behaviour.
The coalition agreement announced the roll-out of a free, impartial national financial advice service paid for by the financial services industry. The service will be fully rolled out by spring next year, providing information and advice on money matters and helping people to understand their options.
Mrs Hodgson: Will the Minister give way?
In the Budget, we announced that an annual financial health check will also be available from next spring as a component of the national financial advice service, offering everyone the chance regularly to review their financial situation and encouraging them to take action including through saving. Both the national financial advice service and the annual financial health check will help people to make the right decisions. We can also do that by making sure that the right products are available, including for families to save for their children.
To make sure that parents have a clear, simple and accessible option to save for their children, we will introduce a new, tax-free children's savings account after the end of child trust fund eligibility. That account will not have any Government contributions, but it will allow families to build up some savings for their children.
Mr Love: Will the Minister give way on that point?
Mr Hoban: If the hon. Gentleman allows me to finish, I may well answer his question.
We are working on the details of the accounts with the industry and other stakeholders, and we will set out more detail in the months ahead. We are clear that, as with child trust funds, those accounts will belong to the child; that they will be locked in until the child reaches adulthood; that they will allow investment in both cash or stocks and shares; that they will be able to receive contributions from family, friends and others up to an annual limit; and that all returns will be free of income tax and capital gains tax.
Mr Love: The Minister has forgotten to mention that both the child trust fund and the saving gateway were specifically targeted at lower-income groups, many of whom-perhaps most of whom-do not pay tax. All the evidence suggests that in order to incentivise people, you have to either provide them with an asset or match their savings pound for pound.
Mr Hoban: As I have set out, the previous Government left us with no choice but to axe those schemes, because we had to save £80 billion in public spending to get spending back on track and keep the deficit under control and interest rates as low as possible for as long as possible. That was the Government's priority.
Toby Perkins: Will the Minister give way?
Mr Hoban: I will not, because I want to continue making progress.
We want to provide people with a clear and simple way of saving for their children, while saving the £500 million a year that we currently spend on child trust funds.
The savings from the child trust fund, the saving gateway and the health in pregnancy grant will allow us to prioritise the limited resources that we have. As the Chancellor set out last week, we have chosen our priorities as we tackle the deficit that we inherited. We are delivering on our commitment that health spending will increase in real terms in each year of this Parliament. We are prioritising long-term growth, creating the conditions for a private sector-led recovery. We are also radically reforming public services to build the big society where everyone plays their part.
Paul Goggins: Will the Minister give way?
Mr Hoban: I am sorry, but I need to make progress.
We are prioritising fairness and social mobility, providing sustained routes out of poverty for the poorest. While encouraging some of the poorest to build up savings can be seen as meeting those goals, in the tight fiscal position that we have inherited, it is better to invest more in education and health, which will have a greater immediate impact than building up assets.
Mrs Hodgson: The Minister has mentioned education. The Government are introducing larger fees, so young people will leave university with up to £40,000 of debt. A small nest egg from the Government in the form of the child trust fund would have incentivised families to save to pay for that debt. Will he explain how those two concepts go hand in hand and where the fairness is?
Mr Hoban: The hon. Lady should have taken the opportunity to ask her colleagues that when they introduced tuition fees and the child trust fund in the previous Parliament. The situation is not new, and I am sure that she has discussed the matter with her colleagues.
Mr Hoban: As we tackle the deficit, one of our priorities is to transform the prospects of the poorest children.
Paul Goggins: Will the Minister give way?
Mr Hoban: I will not. The Opposition spokesman, the right hon. Member for Delyn (Mr Hanson), wants to speak in the debate and needs to be free from this place at 6.30 pm, so I will continue my speech.
Mr Deputy Speaker (Mr Lindsay Hoyle): Order. Mr Goggins, you are going to have to sit down. The Minister is not giving way. I know that you are trying to catch his attention, but you cannot stand up for five minutes waving your hands. You have got to get used to being back on the Back Benches.
Mr Hoban: I was not sure whether he was waving or drowning, Mr Deputy Speaker.
As we tackle the deficit, one of our priorities is to transform the prospects of the poorest children, who need it the most, through the schools pupil premium which will be worth £2.5 billion by-
Paul Goggins: On a point of order, Mr Deputy Speaker. Is it in order for the Minister consistently to refuse to take an intervention from someone who has already pursued a specific issue and wishes, in the light of something that the Minister has said since, to take up that issue with him in a constructive manner?
Mr Deputy Speaker: That is not a point of order. I understand your frustration but the Minister, in fairness, has been generous to many colleagues. Unfortunately, you have been very unlucky in not catching his eye, but I am sure that, if he were generous, he just might spot you standing once more.
Mr Hoban: As I was saying-[Hon. Members: "Shame!"] Members on both sides of the House want to speak in the debate, Mr Deputy Speaker. I have been generous in giving way and I want to continue with my remarks.
Through the schools pupil premium, which will be worth £2.5 billion by 2014-15, as well as by extending the provision of 15 hours a week of early-years education and care to all disadvantaged two-year-olds from 2012-13, and by maintaining funding for Sure Start in cash terms, we will provide real opportunities for disadvantaged children to move out of poverty for the long-term. We will also use some of the savings from withdrawing child benefit from families with a higher-rate taxpayer to fund significant above-indexation increases in the child tax credit, thereby ensuring that the spending review will have no measurable impact on child poverty in the next two years.
Some people say that stopping Government payments to child trust funds is not fair to children, but there would be nothing fair about leaving the next generation with unsustainable debts that would mean higher taxes and poorer public services. We can fund our priorities at the same time as reducing the deficit only if we find savings elsewhere and this Bill will contribute to that. As I have said, it will end eligibility for child trust funds, repeal legislation on the saving gateway and abolish the health in pregnancy grant.
These were not easy choices to make, but they were the right choices. We simply cannot afford the luxury of spending half a billion pounds a year on the child trust fund when that money is not available to people for 18 years. We simply cannot afford to introduce a new scheme like the saving gateway as we start to tackle the most challenging fiscal position for decades and we simply cannot afford to keep spending £150 million a year on the untargeted, unfocused health in pregnancy grant. The tough choices that we have made on those policies will save £370 million this year, about £700 million next year and about £800 million each year from then on. That means £800 million less in spending cuts, tax rises or borrowing, as we would have had to find that money from somewhere else.
This is a timely debate as it comes on the day that a leaked Labour document acknowledges the lack of substance in Labour's economic plans. If the Opposition oppose the Bill tonight, they will have to explain how they would plug the gap. If they do not, that will be further proof that their plans lack substance. We have made our choices and they have to make theirs. The Bill puts those choices into action and I commend it to the House.
6.3 pm
Mr David Hanson (Delyn) (Lab):
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 the Minister 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.
Mark Tami (Alyn and Deeside) (Lab): Does my right hon. Friend agree that it is clear that Government Members are ashamed of this terrible Bill as there is hardly anyone on the Government Benches to link themselves with it?
Mr Hanson: I give credit to the Minister for defending the indefensible, and I look forward in particular to hearing Liberal Democrat Members and others defend the removal of these grants, trust funds and the saving gateway, all of which help the poorest in our society.
Martin Horwood (Cheltenham) (LD): Does the right hon. Gentleman accept that child trust funds were never designed to help children because they are paid to 18-year-olds and that when funds are scarce it is better to target them at children who are in education through something like the pupil premium? If his party was so concerned about people having an asset at the age of 18, why did it introduce tuition and top-up fees?
Mr Hanson: I shall not take lessons from the Liberal Democrats on tuition fees given the outcome that they have got in that regard. The hon. Gentleman needs to recognise that the trust funds are an investment to tackle inequality among people at the age of 18 and to give poor people in society a chance at the age of 18. Not every will have a trust fund at the age of 18: some of the Cabinet's will, but not everyone's. He should recognise that poor people need that help and support at the age of 18.
Mr Jim Cunningham (Coventry South) (Lab): Does my right hon. Friend agree that the comments of the hon. Member for Cheltenham (Martin Horwood)s are a bit rich given the Liberal Democrats' current position on tuition fees after they campaigned against them for years? The Government claim to be very interested in eliminating child poverty, but how will what has been announced tonight do that? It is sheer hypocrisy.
Mr Hanson:
My hon. Friend is correct in the sense that there are ways in which we can tackle child poverty, such as by ensuring that people have an equal opportunity
at the age of 18 to make progress in their lives through jobs, training and university. One way in which we were doing that was through the child trust fund.
Sandra Osborne: Does my right hon. Friend agree that if the measures were due to financial constraints, the Conservatives would have kept the CTF mechanism in place, given its success, and perhaps cut the contributions with a view to reinstating them when times were better rather than abolishing the funds altogether?
Mr Hanson: I shall come to that point later. The Government have chosen to take a sledgehammer to the funds and not even to consider other options such as that mentioned by my hon. Friend.
Toby Perkins: My right hon. Friend is touching on the choices that the Government have made. The number of attacks that they have made on children, families and women is revealing. They seem willing to give money to married couples who do not have children but they are taking money from families with children. Anyone who has been married and had kids knows that it is not getting married that costs money but having kids. When my son was four months old I thought that he was robbing my wallet because I had no money left. Does not the Government's approach show how out of touch they are with the real lives of families and children?
Mr Hanson: I agree. The Government are not in touch with the difficulties of raising a child or of meeting the costs when children reach the age of 18.
The child trust fund is worth £500 to each child over their lifetime, but it is worth £1,000 to the poorest children. The Minister will know that the previous Labour Government also introduced a disability living allowance payment on top of £100 or £200 for those entitled to DLA. That measure was introduced to take into account the significant extra challenges that disabled people face at that important time in their lives. When that measure passed through Parliament earlier this year, under the previous Labour Government, the Conservative party did not oppose that addition. Indeed, the present Financial Secretary said that
"we recognise that additional support is required for children with disabilities, and we have no objections to this statutory instrument."-[ Official Report, Eighth Delegated Legislation Committee, 10 February 2010; c. 4.]
The Liberal Democrats' spokesperson at the time said they were happy to support the regulations. Quite simply, the Government say one thing in opposition and another in government.
As young people reach 18, the financial challenges-not least those imposed on them by the current Government-will be more difficult. If individuals do not come from a wealthy background, the prospect of stumping up extra money for tuition fees is an eye-watering one. Not everyone will have a trust fund of their own to manage those resources. The children's trust fund would have provided young people with an extremely welcome lump sum, would have helped people with education and training from the age of 18, and would have helped people to save who had never saved before to supplement their future income.
Martin Horwood:
I may not necessarily be supporting the tuition fee proposal of my hon. Friend the Financial Secretary to the Treasury, but at least he is increasing
maintenance grants for the poorest students, which the Labour Government did not manage to do.
Mr Hanson: May I just say three words to the hon. Gentleman: education maintenance allowance? I look forward to him voting to abolish that and to raise tuition fees-both of which he pledged not to do at the general election.
With child trust funds we are trying to help poorer people and those on lower incomes to save for their children's future. Before the child trust fund, only 18% of children had regular long-term savings made for them. The child trust fund industry average is now 31%. Among families on incomes just above welfare dependency, 30% of the child trust fund accounts now have money saved into them every month. Families in the lowest income bracket are now saving a higher proportion of their household income for their children than those in affluent groups. Do not take it from me, Mr Deputy Speaker: parenting groups, charities, think-tanks and academics have all put their names to motions and supporting letters that say the decision to abolish the child trust fund, along with the saving gateway, is short term and misguided.
So today, as the Government prepare to take the child trust fund from our children, we need to know what they intend to replace it with. The Minister has said that there will be no substitute and no compensation for the scheme where there is a Government contribution to encourage that saving. I welcome the fact that he wants to consider a future scheme to maintain the infrastructure. We know that the annual cost of running the child trust fund was about £5 million last year. I hope the Minister will confirm and look, in the winding-up speech at least, at how we keep that infrastructure in place to ensure that parents can make voluntary contributions.
Mrs Hodgson: Does my right hon. Friend agree that the difference between the numbers of Members present on each side of the House is interesting? As the Minister said, Governments have to make choices; indeed, I think the Chancellor said that only last week when he announced the comprehensive spending review. Some of those choices are more difficult than others and some are more shameful than others. Perhaps there is only one Lib Dem Member in the Chamber and so few Conservative Members because this is a rather shameful thing that they are doing, and a lot of them cannot face up to what is being done.
Mr Hanson: We shall see. I welcome my hon. Friend's contribution. When we debated the child trust fund and the reduction in funding in Committee in July, and when we had a vote on the Floor of the House, Liberal Democrat Members flooded into the Lobby to support that measure; Conservative Members flooded into the Lobby to take money away from newly born children from August of this year. That is a disgraceful position, and the strength of feeling that the Minister will face today from my right hon. and hon. Friends shows that Labour Members, who introduced the saving gateway, the child trust fund and the health in pregnancy grant, are proud to have done that and proud to defend them in the Chamber today.
Pete Wishart: The right hon. Gentleman is absolutely right that the coalition Conservative Government are doing some appalling things to women and children, but perhaps he could talk about what the Labour party did. Was not the Labour party going to halve child poverty? What actually happened to child poverty in the last few years of the Labour Government? Did it not go up?
Mr Hanson: I will say just this to the hon. Gentleman: record levels of the minimum wage, record support on Sure Start, record investment in education and tackling child poverty across the board. The Labour Government have a proud record of tackling inequality and trying those issues. [Interruption.] The Financial Secretary says, "Records of deficit". I recognise, as does my right hon. Friend the shadow Chancellor of the Exchequer, that we need to tackle the deficit, and that is where the choice is today. The choice for the Financial Secretary is to cut deeper- [Interruption.] If he stops chuntering for a moment from the Front Bench and listens, he will hear me say that choices have been made to cut the deficit much more slowly than the hon. Gentleman was doing, over a longer period. There are other issues that could be looked at. The Government's banking levy is worth a proposed £2.4 billion. If the Labour Government had been in office, that would have been £3.5 billion. There is £1.1 billion extra already from that funding. The hon. Gentleman knows there are differences of approach, and the Labour Government would have taken a different approach to the deficit, and would have been able to save those resources in a much better way.
Owen Smith (Pontypridd) (Lab): Does my right hon. Friend agree that another example of the fundamental difference between what we would have done in office-indeed, what we did in office-and what this Government are doing today is the disgraceful sop we have heard from the Minister, replacing the child trust fund with a tax-free account, which as we all know will do absolutely nothing substantive to encourage saving among low-earning families, as the trust fund was doing? That is the real business we are debating today, and I, for one, think it is a mistake and a disgrace.
Mr Hanson: One of the great benefits of the child trust fund was that it encouraged people on lower incomes to save, it gave a kick-start to their savings accounts and it helped them to get into the habit of saving. The change that the Minister has made will mean that those people who can save will save, and those who are not used to saving, do not have the resources to save or are not part of that savings culture, will not save. That will impact, in due course, on the inequalities of people in their 18th year.
Mr Hanson: Before I give way to my right hon. Friend, let me say that one of the most disgraceful things will be the fact that the Government are taking child trust fund contributions from children who have no parents, who are in care, who need the support of the state to reach their 18th birthday-who will need that kick-start in due course. I am sure that is the point that my right hon. Friend was going to make.
Paul Goggins: I am very grateful indeed to my right hon. Friend for giving way. [Hon. Members: "Hear, hear."] He has been very generous, as was the Minister until, for some unknown reason, he declined to take interventions towards the end of his speech. My right hon. Friend may remember that in an intervention I raised the issue of looked-after children. After that, the Minister announced, although he did not go into too much detail, the new tax-free savings account for children. Does my right hon. Friend think it would help if we knew how looked-after children might be able to benefit from the new scheme that the Minister just announced?
Mr Hanson: Perhaps the Minister can tell us that in his winding-up speech, because clearly, looked-after children, children in care, would have had a contribution to the child trust fund, which would have helped them, on leaving care at the age of 18, to start a life without parental support. That is an important contribution that this Government have taken away from looked-after children.
Paul Goggins: To be constructive: there may be opportunities for local authorities, for charitable trusts, for other people in the community, to contribute to funds set up in the name and for the benefit of looked-after children. Will they be able to benefit from this new tax-free savings account? I do not know, because the Minister would not take my intervention and answer the question.
Mr Hanson: I hope I can assure my right hon. Friend that as we have eight sittings in Committee, I will table amendments on some of those issues. Indeed, I can even offer him a chance to serve, should he so wish, on the Public Bill Committee in due course.
Toby Perkins: Teenage pregnancy levels are high in some of our most deprived communities, and the child trust fund at least offered 18-year-olds who were about to have children the chance to take a different track or to receive some support. Does my right hon. Friend agree that the Bill will take away a key tool in the battle against child poverty?
Mr Hanson: It will indeed take away a key tool in helping to deal with inequality and poverty at the age of 18. The child trust fund encourages saving, particularly among people from the poorest parts of our communities.
Kate Green: Is not the Minister proposing tax breaks for savers' children, benefiting families who pay tax-the better-off-and widening inequalities, because non-taxpayers will get no benefit at all?
Mr Hanson: My hon. Friend is exactly right, and from her background outside the House as well as inside it, she will know how important that contribution is, but let me move on to the Saving Gateway Accounts Bill, which was introduced in 2009 by the Labour Government, again to encourage people on low incomes to save for their future.
Cash savings accounts were created for those on lower incomes, providing a financial incentive to save, with the Government matching, pound for pound, the
money that people saved in the scheme. The scheme was proposed in 2001: 22,000 people have so far taken part in the pilots, and £15 million has been invested in savings through those pilots. The accounts have run for two years, and they have been a positive way for people to start to save, with help and support for those in our poorest communities.
The first pilot ran between 2002 and 2004, and 1,500 saving gateway accounts have been opened in Cambridge, Cumbria, east London, Manchester and Hull, in the part of the world of my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson). Additional pilots have been run recently in South Yorkshire. Those schemes have shown that we can generate new savers, new saving and, indeed, help people on poorer incomes to put aside money to meet some of the challenges that they face in their daily lives.
Hon. Members need not listen to me about the importance of those schemes; let me give them an authoritative voice on the Saving Gateway Accounts Bill:
"The Bill serves a valuable purpose in encouraging people, particularly those on low incomes, to save. People on higher incomes have an opportunity to smooth out fluctuations in income and expenses to which those on low incomes do not have access. If the Bill is successful in encouraging people to save, it will enable them to create a modest buffer against variations in income, such as the unexpected expense of being laid-off for a short period. It will give people a degree of financial security they have not had hitherto."-[ Official Report, 25 February 2009; Vol. 488, c. 323.]
Those are not my words, nor those of my right hon. and hon. Friends; they are the words of the Minister, who is now introducing proposals to end such schemes, although he supported the 2009 Bill-doing one thing in opposition and, yet again, another thing in government. At a time when potentially 500,000 people are being laid off because of the public sector cuts as part of the comprehensive spending review, the Government will take that support away from those who need it most.
In the absence of the saving gateway scheme, how does the Minister propose to promote the culture of saving among people on lower incomes? As my hon. Friend the Member for Stretford and Urmston (Kate Green) said, how do we ensure that saving is not the preserve of the rich and that it is done throughout society, so that people can help themselves and ensure that they save for the future in partnership with the state?
If we turn to the last part of the Bill, we see the full force of the coalition's new politics turning itself on those who are pregnant. Any hon. Member who is a parent knows that raising a child is a uniquely rewarding experience, but we all need to recognise that it can be financially challenging in the run-up to a birth and that it can be difficult for young mothers and young families. Not only was the health in pregnancy grant introduced in recognition of the health benefits of covering some of the additional costs involved during pregnancy, but it was paid universally to all mothers to ensure that they could buy help and support during the last weeks of their pregnancies. Such support covered healthy eating, vitamins, medicines, books on healthy pregnancy or the cost of maternity clothes or folic acid, as mentioned by my hon. Friend the Member for Bolton South East (Yasmin Qureshi). Folic acid can help to reduce the risk of spina bifida, but 400 mg costs £9.99 at Boots. The health in pregnancy grant can be used for those costs
and put towards getting help and support for health, and it is linked specifically to ensure that advice is given to mothers in pregnancy as part of the deal.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con): I am sure that hon. Members on both sides of the House agree it is important to target resources at the most vulnerable, but in dealing with pregnancy specifically, can the right hon. Gentleman point to any evidence that such help has improved the outcomes of deliveries, or births, or the health of ladies during their pregnancies?
Mr Hanson: If the hon. Gentleman cared to listen not just to me but to a range of groups that support pregnant mothers-from maternity groups to the Fawcett Society and others-he would find that there is a real input. He has a medical background, but if he is telling me that the grant does not matter to individuals who pay extra for healthy eating and minerals, who take medicines to reduce the risk of spina bifida and who need to buy maternity clothes and so on, I would like him to stand up and tell his constituents why that is so.
Dr Poulter: The right hon. Gentleman is making points about a grant that is given later in pregnancy and talking about minerals that are given earlier in pregnancy, so he needs to understand the issue a little better, but can he give any evidence of how the grant has improved the outcomes for mothers during pregnancy? Can he produce such evidence from any birthing group, any obstetric group or any midwifery group?
Mr Hanson: The hon. Gentlemen need not listen to me but should listen to the groups that are arguing for the retention of the grant. It is important not just for health but for costs of pregnancy, such as maternity dresses or equipment for the home, or covering time taken off work through ill health. Women on poor incomes need help and support to cover those important things, and this universal grant can help individuals to meet those needs at a time of great stress in the 25th week of pregnancy.
Catherine McKinnell (Newcastle upon Tyne North) (Lab): I noticed that the Minister referred during his submission to a quotation from the National Childbirth Trust, which expressed its upset that the grant was not provided earlier in pregnancy. I also have a quote from the trust that might provide the evidence requested by the hon. Member for Central Suffolk and North Ipswich (Dr Poulter):
"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... the Government should stick to its commitment to making the UK more family friendly."
Mr Hanson: My hon. Friend quotes the chief executive of the National Childbirth Trust, but she could have also quoted the Royal College of Midwives, which said that there is an opportunity for midwives to communicate health advice to women and their families, as the grant is dependent on engagement with health practitioners. Never mind the cost of maternity dresses and other clothes, minerals, healthy eating, advice or taking time off work, these are important grants.
The Bill shows that the Government are out of touch with the needs of the vast majority of the British people. A £190 maternity grant may not seem much to some Government Members, but for the shop worker getting by on the minimum wage, it is a significant amount of money. For a woman with an unemployed partner, it might make a difference to the future health of their child. For those people, the grant makes a difference. Like the child trust fund, the grant is about investing in our future and in our children's health and in giving them a good start and ensuring that they have a break at the age of 18, to make their way in life with positive support.
Kate Green: Does my right hon. Friend agree that one of the things that is likely to happen if women are given a sum of money in the seventh month of pregnancy is that they will go out and spend it, thereby also helping to regenerate their local economies?
Mr Hanson: Indeed. That is a good point, but I would say in passing to my hon. Friend that, unless I missed something, the Minister seemed to indicate that he did not feel that women would spend the money on things that matter for their pregnancy. He seemed to take a "shoes and nail varnish" approach in relation to what the grant has done. Most women take a great interest in the development of their children-that is the most important thing in their pregnancies-and they will do things to ensure that their children have a great start in life, and the grant was an opportunity to help in that respect.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): Government Members are slightly confused on this matter. The Government keep saying that these draconian cuts for the poorest children are necessary to help the deficit and laud their own policy of giving two-year-olds 15 weeks' free education, basing access to such a service on eligibility for free school meals. How many two-year-olds receive free school meals at the moment? If those two-year-olds do not have older siblings, what mechanism must be set up across Departments to work out which two-year-olds are eligible? What is the cost of such a mechanism? How much of the money recouped from the cuts that the Government propose will be wasted on a complicated mechanism to work that out?
Mr Hanson: My hon. Friend makes an important point. There was a thread running through the Labour Government's intentions to ensure help and support for children, help and support for those on low incomes to save, and help and support for families to save for their children's 18th birthday and beyond. [Interruption.] The Liberal Democrats are down by 50% already-down to one Member present.
Martin Horwood: In defence of my hon. Friend the Member for Bristol West (Stephen Williams), he is attending a Bill Committee.
Mr Hanson:
The hon. Member for Bristol West (Stephen Williams) is a member of the Finance Bill Committee, as am I. I am in the Chamber defending our position on behalf of the Labour Opposition. The hon. Gentleman is in the Finance Bill Committee saying nothing about
what is happening upstairs and supporting the Conservative party in Divisions upstairs. The hon. Member for Cheltenham (Martin Horwood) should reflect on those matters.
The changes proposed in the Bill, coupled with changes to direct tax, tax credits and benefits, will hit women harder than men. The spending review changes hit women twice as hard as men. The emergency Budget changes hit women three times as hard as men. Cuts in child care, tax credits, child benefit and other support will make it harder for women to work. More than £6 billion is now being cut in direct financial support for children-three times more than is being taken from banks.
I come back to the fact that the banking levy proposed by the Conservative Government, which was a Labour Government initiative, will raise £2.4 billion. My right hon. Friend the Member for Kingston upon Hull West and Hessle proposes a banking levy of £3.5 billion.
Mr Hoban: The banking levy was not an idea of the previous Government. The previous Chancellor of the Exchequer ruled out the banking levy that we have introduced.
Mr Hanson: No. If there is a banking levy in place, we will support a higher banking levy. Would the hon. Gentleman support a banking levy of £3.5 billion and scrap the abolition of pregnancy grants today? No, he would not.
Mr Hoban: Last week the banking levy that the shadow Chancellor proposed was to pay for infrastructure. This week it is to pay for the cost of child trust funds and the health in pregnancy grant. With the banking levy stretched so far, the right hon. Gentleman needs to control his spending commitments.
Mr Hanson: There is a range of measures that the Labour Government introduced and would have introduced in relation to deficit reduction. There is a range of measures that my right hon. and hon. Friends and I were elected to implement to reduce the deficit over a four-year period, including an additional banking levy and help and support for deficit reduction. [Interruption.] The Financial Secretary says that is not so. Whatever happened at the general election, we were elected on a policy to reduce the deficit over four and a half years. We would have done that. We would have implemented measures including a range of tax changes and help and support for public sector efficiencies of £15 billion. He is making a choice that puts women, children and the poorest in our society at the greatest disadvantage as a result of the changes. That is a disgrace. We should have looked at the situation differently.
Mr Russell Brown (Dumfries and Galloway) (Lab): I hope my right hon. Friend will take the opportunity from the Opposition Front Bench to remind the Minister that it was our aim to raise an additional £19 billion through taxation, 60% of which would have come from the top 5% highest earners.
Mr Hanson:
Indeed. As my hon. Friend knows, even now some of the Budget measures that make the Budget seem fairer than it is are measures that we supported in
government and which the Conservative Government opposed when they were in opposition. I will not take lessons from the Conservative Minister on fairness towards pregnant women, children and those on poorer incomes, because the Labour Government, when in office, had a proud record of fighting on those issues.
In conclusion, the debate is about choices for the future. As my hon. Friends have pointed out, other choices could have been made. I am not saying that I would have supported them or agreed with them, but the Government could have considered a range of other choices. They could have suspended payments for a period of time for the child trust fund, the maternity grant or the saving gateway. They could have means-tested them, so that individuals with the highest income in society did not receive the maternity grant or the child trust fund.
The Government could have considered measures including a payment holiday. They could have considered phasing out the support over a longer period. They could have done all those things, but they have not. They have taken a sledgehammer to the child trust fund, the saving gateway and the health in pregnancy grant. It is not the deficit that is driving these measures; it is dogma on the part of the Conservative party.
The Government do not recognise the pressures of bringing up a child with limited financial means in the 21st century; they do not understand the difficulties faced by people trying to save on low incomes; and they do not understand the difficulties that mothers- to-be on low incomes face in the final weeks of their pregnancy. The Bill shows that the Government have made the wrong choices. It will deepen inequalities in our society, and I urge all right hon. and hon. Members to reject it.
6.35 pm
Paul Maynard (Blackpool North and Cleveleys) (Con): It is a pleasure to follow the shadow Minister, the right hon. Member for Delyn (Mr Hanson), who was my first political foe when I was just 14 and he was leader of Vale Royal borough council. In the intervening 20 years, he has only got worse. That is a sad thing to have to say.
It is important that we remember why we are here today and what we are here to discuss. We are not here to discuss whether it is a good idea for families to save, or to encourage children to save. We are not here to discuss whether it is a good idea that pregnant women should enjoy good health during pregnancy. We are here to discuss whether the specific items of legislation introduced by the previous Government achieved their goals and warrant continuation.
The Labour Government had a fondness for introducing legislation willy-nilly, volume after volume of it. At no point did they ever feel a need to investigate whether their legislation achieved its goal. I have nothing against innovation in public policy. The work of think-tanks is important, and it is a disappointment to me that the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), is not in his place today to defend his creation, as I know he felt such a passion for it at the time.
What we are here to do today is to decide whether specific items of legislation were effective-not whether they were popular, whether they made Labour Members feel good about themselves, or whether they excited think-tanks, interest groups, pressure groups or campaigners. The question is whether they achieved what they set out to achieve. We cannot have such a discussion without considering the wider economic issues. Every day we are spending £120 million just paying off the debt that we inherited from Labour. I could spend that money in my constituency alone 40 times over. I am sure every Member in the House could do so. We must place the debate in the wider economic context.
There are two important tests that we should apply to any legislation. I call them the Ronseal test and the rhododendron test. The Ronseal test, for those who watch commercial television, might be a bit obvious: does it do what it says on the tin? Any piece of legislation and its effectiveness must be assessed on whether it achieves its goal.
The rhododendron test might be a little more obscure. I often find when listening to those who represent the left in British politics that they identify totemic pieces of legislation that they consider vital and which become representative of a much wider public policy area. They go on to defend that legislation to the hilt, thereby ignoring every other aspect of public policy in that area that could make a difference, just as in a parkland, where rhododendron may look beautiful but it covers so much ground that it chokes off wider growth that might be beneficial.
If we apply those two tests to the child trust fund, for example, how do they stack up? Originally, the former Prime Minister called it the baby bond. It was meant to be a nest egg, a form of what was then in vogue-asset-based welfare. Unfortunately, the fund was not much of an asset by the time the child got to 18. The scheme certainly was not what the philosophers behind the idea of asset-based welfare had in mind. Others sought to define it as progressive universalism. We have a habit in this country of trying to adopt fancy-pants names for new ideas, philosophies and ways of looking at politics, and I am not entirely clear what progressive universalism actually means.
Kate Green: I shall be happy to explain to the hon. Gentleman what progressive universalism means in the context of the child trust fund. It means that all children receive something but the poorest receive more. In that way, we obtain the benefit of popular support for a policy that directs more money to those who need it most.
Paul Maynard: I thank the hon. Lady for what I presume she thought would be a helpful contribution for idiots like me. I shall read a useful quotation from the Child Poverty Action Group in 2005, which I believe the hon. Lady chaired at the time. It is a lengthy quotation on the group's approach to the fund, but it bears repeating:
"Although the Child Trust Fund will benefit some lower income families, we are concerned that families who are at greatest risk of living in severe and persistent poverty are the least likely to be able to contribute to the CTF, so their children will derive little or no financial benefits when they turn 18."
Paul Maynard: Forgive me, I shall not give way because I have not yet finished the quotation.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): Give way!
Paul Maynard: If the hon. Gentleman will calm down and let me finish the quotation, I shall happily give way. Learn some manners, sir, please.
"The very children who would benefit most from having savings and assets are likely to derive least financial advantage from the scheme."
I shall now give way to the hon. Lady.
Kate Green: I am very grateful to the hon. Gentleman. It is true that the CPAG, of which I was chief executive at the time to which he refers, had some misgivings about the initial design of the child trust fund. Thanks to our lobbying, I like to think, the product was improved over time and the extra payments for low-income children were then introduced. Does the hon. Gentleman not agree that that was rather a good development in a policy that is certainly still ripe for improvement, as he rightly says, but not for abolition?
Paul Maynard: Let us rejoin the theme of progressive universalism, which the hon. Lady so kindly and patronisingly explained to me. If the fund is so universal, why in the first four years did 25% of people not apply for it? To me, that is not universal; that is rather partial.
Stella Creasy (Walthamstow) (Lab/Co-op): Is the hon. Gentleman aware of the research by Elaine Kempson of the university of Bristol on the increased take-up of the child trust fund? Three out of every five parents now take it up automatically, and the state picks up the rest.
Paul Maynard: Three quarters of those accounts opened since 2005 have failed to receive additional deposits; 99% have not received the maximum funding available; and only 71% of eligible children have a child trust fund. I am not trying to argue, as Opposition Members seem to think, that the fund is a failure; I am trying to argue a more subtle point, that this piece of legislation-this policy innovation-has not achieved its goal.
Catherine McKinnell: Will the hon. Gentleman give way?
Paul Maynard: I shall give way on this one occasion.
Catherine McKinnell:
The child trust fund has not been in existence long enough truly to reap the benefits that it would if it were kept on. In respect of deposits, the fact is that when parents have young children, their outgoings are extremely high, but if the child trust fund is in place in the future, when they have more expendable outgoings, they are able to invest more money in it. So, an awful lot of parents who might not invest when
the child is a baby might do so in a few years' time when the child has gone to school and they are not paying for child care and so on.
Paul Maynard: I thank the hon. Lady for those ifs and buts. We can all hope for what might happen at some point in the future.
The shadow Minister, the right hon. Member for Delyn, set out three reasons why Labour introduced the measure. It was about inculcating a savings culture, encouraging financial education and providing a nest egg. So, rather than assessing the measure against the legislation, let us try to assess it against what the shadow Minister said was important.
There is no evidence that the fund has encouraged a savings culture. Many organisations that promote financial education come to me time and again to ask, "Why didn't the last Government do more to promote financial education, particularly at primary level?" In the average family, a piggy bank-
Stella Creasy: Will the hon. Gentleman give way?
Paul Maynard: Sorry, I am not going to give way any further. I have been very generous in giving way, but I am afraid that I am not a bus stop.
Paul Maynard: No, I am sorry, but I am not giving way to you, madam, so kindly take notice of that.
Having a piggy bank- [ Interruption. ] I am going to make the point that having a piggy bank in one's bedroom is a much greater spur to saving and learning about the culture of savings than any attempt to lock away money until the age of 18.
The right hon. Member for Wythenshawe and Sale East (Paul Goggins), and the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) in her Westminster Hall debate, have raised the issue of looked-after children and how we deal with them. It is a very important issue, but the Opposition should hang their head in shame at the outcomes that looked-after children obtain after 13 years of Labour rule. The points that those Members made were an example of what I call the rhododendron test. By focusing on the tiny issue of whether such children should continue to receive child trust fund payments, they overlook the much wider public policy issues. There are many other ways in which we can and do help looked-after children.
Diana R. Johnson: What? By cutting the child trust fund?
Paul Maynard: Sorry, but if you are going to make interventions, madam, please stand up.
Diana R. Johnson: I should like to make two points. First, before the election in May, the Tories voted against introducing personal, social and health education-including economic and financial education-and making it a statutory subject in all schools. So, the Tory party should hang its head in shame. Secondly, on looked-after children, what are they doing as a Government-
Mr Deputy Speaker (Mr Lindsay Hoyle): Order. The intervention has gone on for far too long. The hon. Gentleman is making his points, but he must return to the issue at hand.
Paul Maynard: Thank you for that advice, Mr Deputy Speaker.
There are other ways in which we can and do help looked-after children. In particular, for example, there is a high correlation between looked-after children and poverty. That stands to reason, particularly in terms of their geographical location, but the pupil premium, which we announced recently, will go a long way to helping those children who are in education to make it as far as university in the first place. Finally, on the child trust fund, I welcome the notion of a children's ISA. I hope that I hear about it in a future announcement or Budget.
I should now like to apply my two tests to the health in pregnancy grant. It is what it says it is: it is about health in pregnancy. The former Prime Minister, when Chancellor, introduced the policy, saying that the Government had received "powerful representations" regarding the importance of good nutrition during the final stages of pregnancy. The grant was clearly designed to promote health in pregnancy, but, when the measure was going through its Delegated Legislation Committee, the then Health Minister, the right hon. Member for Exeter (Mr Bradshaw), accepted that the bulk of health improvements occur when changes in behaviour occur earlier in pregnancy. Waiting until the seventh month is rather like shutting the stable door after the horse has bolted; it certainly does not encourage a behavioural change.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op): By that very logic, would it not therefore make sense for the hon. Gentleman's party to propose an earlier payment of the grant?
Paul Maynard: I could well ask why you did not think of that when you introduced the scheme in the first place. It is a bit late now-
Mr Deputy Speaker: Order. Everything has to come through the Chair. We have to work through the Chair and not be distracted as we have been.
Paul Maynard: Improvements in diet are important, but the waiting times for those applying for the health in pregnancy grant have been anything up to eight weeks, by which point the money that was supposed to transform their ability to access an improved diet is simply not appearing. It would be very easy to dismiss-
Catherine McKinnell: Will the hon. Gentleman give way?
Paul Maynard: No, I am not going to give way now-[Hon. Members: "Give way!"] No, I do not want to give way- [ Interruption. ]
Mr Deputy Speaker: Order. The hon. Gentleman has given way quite a lot, and if he does not wish to give way now, hon. Members must accept it.
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