Motion to Resolve
To move to resolve that this House regrets that Her Majesty’s Government have laid before Parliament the Social Fund Maternity Grant Amendment Regulations 2011 (SI 2011/100) at unnecessary speed and without providing more information on the impact on new mothers and children in low-income families; and notes with concern that the regulations will remove funds from some of the poorest families during the crucial early months of a child’s life.
Relevant document: 20th Report from the Merits Committee.
My Lords, my noble friend Lady Sherlock secured this debate and I pay tribute to her for doing so. However, it is with great regret that she has had to withdraw, and she has asked me to speak in her place. I agreed to do so willingly, but alas I fear that I will not execute the task as well as she would have done. I should also declare an interest as president of HomeStart in my former constituency of Islwyn.
The two poorest groups in our society are those at the extreme end of the age range—pensioners and young children—and the change the Government are making to the Social Fund Maternity Grant is an outright attack on young children born into some of the poorest families in Britain. Put simply, at present women receiving certain means-tested benefits can get a grant of £500 to help with the costs of a new baby. The Government intend to abolish this payment for the second and subsequent children. A woman who gives birth to a new baby will lose the grant if she already has another child aged under 16 in the household.
The Government are planning £9 billion of cuts in the tax and benefits system, and some £4 billion of those are going to come from child support. I believe that this shows that the Government are out of touch. They assume that parents need only to spend the grant to acquire a pram, a pushchair, a cot, baby clothes and all that is needed for a newborn child just once in a lifetime. I suppose they imagine that all these things can be stored away as the first child grows out of them in case another child follows, and they assume that this storage can go on for 16 years.
This is an attack on some 150,000 of the poorest families in Britain. The Government are taking this step without proper consultation and against the advice of well-known family support groups such as Gingerbread and the Social Security Advisory Committee. Yes, even the advice of the Social Security Advisory Committee, the independent body which provides impartial advice to the Government on these matters, is being ignored. The advisory committee has described the proposals to restrict the maternity grant as lacking a “coherently argued rationale” and has stated that they appear to run counter to Government policy to abolish child poverty by 2020.
The department responsible, the Department for Work and Pensions, has stated that:
“This change will undoubtedly cause hardship for some cases. However this will not impact on the child poverty figures”,
due to the fact that maternity grants are one-off lump-sum payments which do nothing to increase annual income. The department is known across Whitehall as DWP, which is also a word in Welsh—“dwp” means stupid and daft in the head. Anyone who actually believes that this measure will not impact on child poverty is not taking the issue seriously at all. Indeed, Gingerbread has said:
“The DWP fails to recognise the significant and negative impact that this measure will have on the ability of poor and low-income families to buy essential baby equipment. Single parents are more likely than couple families to be poor: 52% of children in single parent families grow up poor. If a single parent has just separated from a partner, they are likely to have experienced a drop in income. If they are pregnant, or later become pregnant and cannot claim the [grant] because they already have a child under 16, many will struggle to buy items such as a pushchair, cot and car seat. If they have fled domestic violence and have no belongings for themselves or their other child, this situation is [made even worse]. The impact is likely to be particularly great where there is more than a two-year gap between children”.
Gingerbread also points out that the,
“DWP mistakenly assumes that [the grant] will have been claimed for the first child”,
But the organisation’s helpline suggests that large numbers of people do not claim the grant for their child through ignorance or the complexity of the tax and benefits system.
The Merits of Statutory Instruments Committee of your Lordships' House said that the Government’s target of 24 January for the coming into force of the instrument in order for the change to take effect in April of this year,
“has severely curtailed both the time available for consultation and for Parliamentary scrutiny”.
Furthermore, the SSAC was able to consult for only nine days on this proposal—a dismally short period. Alas, this is becoming typical of the Government, who seem to view consultation and scrutiny as optional, rather than viewing them as mechanisms which can improve government proposals and mitigate their worst, ill-thought-out effects.
As the Merits Committee noted, no impact assessment has been provided to Parliament. Little information has been given on the costs of alternative policy options and the department had not explained why the option chosen was preferred. Again, this looks like policy made on the hoof for short-term political, rather than long-term welfare, considerations.
The Social Security Advisory Committee suggested that the way in which Government have alighted on some decisions as part of this policy change lacks reasoned explanation. The committee pointed to the way in which the Government had arrived at the exceptions to the new rules, and why the option to restrict to payments who are the only children under 16 in a family was chosen above the other options presented to them. The proposal is that if there is a child in the family under the age of 16, there is no entitlement to the maternity grant. The SSAC believes that,
“this is an unreasonably high threshold and should be set at a much lower age, possibly as low as five”.
This point is reiterated by the Merits Committee, which noted:
“The rationale for limiting eligibility to households where there is no child under 16 is not explained. While it is reasonable to expect some recycling of baby equipment among siblings, the SSAC points out that it seems unrealistic to think that parents of a fifteen year old would retain baby goods that long”.
My wife and I have four children, and there was a five-year gap between the birth of our third and fourth children. I can tell your Lordships that when the fourth child arrived we had to go out and buy a whole new lot of equipment.
The advisory committee states that,
“the changes to the rules for Sure Start Maternity Grants are based on an assumption that the payments are made on the basis of meeting additional expenses incurred by the purchase of new items regarded as necessary for a baby, and that they fail to recognise ongoing or recurrent costs such as the need for the mother to eat healthily or for the home to be kept sufficiently warm”.
This would suggest that this policy, like so many that the Government have put forward, has not been properly thought through.
One respondent to the advisory committee noted that,
“each pregnancy and preparation for a baby costs an average of £1,600, and that this estimate does not simply include the ‘hardware’ required but also additional heating and travel costs for hospital visits: so there are considerable costs that cannot be met by ‘recycling’ goods from a previous pregnancy”.
The Government have not properly considered what costs incurred for children apply to every child and cannot be mitigated by hand-downs. As a result, their proposal to restrict maternity grants to the first child looks increasingly muddled and will produce significant hardships for families across the country.
There will be an intervening period of eight to 12 months between the introduction of the new rules for maternity grants and the introduction of mitigating measures to extend Social Fund budgeting loans to include maternity items. The Social Security Advisory Committee said that,
“this would mean that many people will be left without any alternative means for meeting the additional expenditure incurred by a second or subsequent baby beyond going without or having to resort to high cost lenders”.
One of the most worrying aspects of the proposals is the lack of a safety net for those who lose their grant. While a loan facility will eventually be available, the changes are not being put in place at the same time. The mitigation measures will not come into effect until at least eight months after the cuts to maternity grants have been implemented.
The committee said that it was particularly concerned about this, stating:
“It would be a difficult enough step for someone who would have been entitled to an SSMG of £500, to go to having to apply for a budgeting loan for the required items. But it is an entirely different matter if there is no provision to be made at all within the benefits system and they were expected to borrow commercially instead. People eligible for an SSMG would be unlikely to have access to low-cost credit – indeed many would need to borrow at APRs in excess of 100 or even 200%”.
The advisory committee urged the Government to look at halving their budget for this grant and to look at the impact of other changes; for example, to housing benefit, health in pregnancy grant and tax credits. It said that no such evaluation of the rationale had been presented to them. Respondents to the advisory committee pointed out that the cuts in the maternity grant will cause hardships for families which may translate into additional costs for other bodies such as local authority social services departments and the NHS. The SSAC therefore concluded that a more tempered level of saving may be achieved than other outcomes would yield.
The committee also observed that the low-income families eligible to apply for the grant are those most likely to have been in temporary accommodation or in homes with cramped conditions, which would make it unlikely that they would have had places for long-term, regular storage of baby equipment. Anyone with a new child knows how much stuff children can generate as they grow up and grow out of their baby clothing and equipment. People living in cramped conditions simply cannot keep such things just in case they have more children. The policy ignores conditions in low-income families and the realities of their situations, quite possibly because too many in the Government have no experience of, or any concern about, people living in such conditions. Most concerning, it risks exposing children born into low-income families to poverty from the moment they are born. That simply cannot be right for the fourth-richest country on the planet. It is not morally right either.
Rather than listening to the SSAC, the body which is supposed to advise the Government on these issues, the Government have instead pushed ahead blindly and said that they have no plans even to review the policy. It is typical of the arrogance that this Government now display that they never seem to listen to reasoned arguments or objections from any outside source, but rather they assume that they are right and that everyone else is wrong.
The Merits Committee concluded:
“This instrument seems to have been inadequately planned and explained”.
It wisely suggested that your Lordships,
“may wish to press the DWP for a better explanation of why the other options suggested were not pursued and what the anticipated impact on new mothers and children in low-income families will be”.
I hope that the Minister has some encouraging answers.
My Lords, I support the Motion of Regret put so ably by my noble friend Lord Touhig. I shall speak very briefly and widen out the debate a little.
There has been a lot of discussion in your Lordships' House recently on early intervention. There have also been many reports recently, including one by Frank Field on child poverty and one by Graham Allen on early intervention. I thought and hoped that the Government would have understood the importance of spending now to save later.
During the recent debate on parenting of the noble Lord, Lord Northbourne, I was greatly impressed by a statement from the noble Lord, Lord Ramsbotham. He cited the Graham Allen report on early intervention, which said that decades of expensive late intervention had failed. In his response, the Minister, the noble Lord, Lord Hill, said:
“I hope that it is also fair to say that this Government, like the previous Government, recognise the importance of the early years in children's lives and development”.—[Official Report, 3/2/11; col. 1500.]
How true, but do the Government still recognise that?
This measure, cutting a grant to low-income families, may well contribute to both poverty and to poorer outcomes for children. It may not seem like much money, but it is to some people and some families generally. The loss of the money could affect the lives of not only the child or children—and some people have twins—but also affect the relationship between the parents. Stress can be created by poverty, and poverty affects relationships. It also affects maternal health, which is a key to good health and achievement in children.
My noble friend Lord Touhig has made all the main points about the illogicality of abolishing the grant for second and subsequent children where there is already a child under 16 in the household. He mentioned in particular—I emphasise this—that the Merits of Statutory Instruments Committee pointed out that no impact assessment of this measure has been provided to Parliament and that three of the options considered in the Act paper published alongside the instrument would result in similar savings. The DWP has not explained why this option has been preferred.
There are all kinds of complications which do not seem to have been considered—for example, a family unit where the woman is expecting their first child but there is a child already from the man’s previous relationship. Such detail should have been considered. The measure has simply not been thought through and it works against the commitment to early intervention to support families and children by the Government. I support the Motion of Regret and I beg the Government to think again.
My Lords, I support the Motion of Regret of my noble friend Lord Touhig.
That word “regret” is important. The Merits of Statutory Instruments Committee, in its devastating report of 3 February, made a number of points relating to the withdrawal of the Sure Start maternity grant for most pregnant mothers. One of the points it made is that the Office for National Statistics survey found that,
“less than 10 per cent of second and subsequent children were born more than five years after the first or subsequent child”.
The effect of this means realistically that the grant is now paid only for the first child because, if there are children in the family under 16, in no circumstances will the maternity grant be paid.
The Merits Committee also suggests that,
“The House may wish to seek clarification of why age 16 was chosen as the threshold as opposed to say age 5 or 10”.
I therefore ask the Minister why the age of 16 was chosen. It is highly unlikely, for example, that if there is a 15 year-old child in the household—or even a 10 year-old—any equipment from that child could be used for the new baby. The expenditure would be very like having a first child, but with no help whatever from this Government.
The charity Gingerbread, commenting on the emergency Budget of June 2010, said:
“A family having a second child could be over £1,200 worse off this year than last year. These cuts will be deepest for the most vulnerable families”.
The charity Family Action said,
“low income families will find it tough to meet the needs of their newborn children and families returning to work will be stung by cuts to tax credits and childcare costs. We know from talking to the new parents who access our services how vital these funds are in giving families and their children the best possible start in life. Now they’ll be on the back foot from birth, thanks to the Government’s policies”.
In his statement on the Social Fund Maternity Grant Amendment Regulations 2011—published in the Act paper—the Secretary of State for Work and Pensions says:
“Around 150,000 families in receipt of a qualifying benefit at the point they have a second or subsequent child will be affected by this measure. In order to help mitigate the effects for some of these families, the forthcoming Welfare Reform Bill will include a measure to open up the Social Fund budgeting loan scheme to enable loans for maternity items to be made available. However, due to the discrepancy in timing between the introduction of the changes to eligibility to Sure Start Maternity Grants in April 2011 and the date the provision in the Bill comes into force (expected to be early 2012), families will not be able to take advantage of the extended access to Budgeting Loans during this period”.
The Government saying that “families will not be able to take advantage” must be the understatement of the year.
This is the coalition Government’s timetable; they are in charge of it. They could do something about it but they have chosen not to. This means that there will be no government help available for women who are expecting babies between 11 April 2011 and some unknown date in 2012. What are these mothers expected to do? Do they go without? Do they go to a charity or to their church to see whether they can get some help? Perhaps they may be able to get a loan from a bank. If not, perhaps, as my noble friend Lord Touhig said, they may be able to take out a loan with some organisation where a very high interest rate will be charged. What a worry for a pregnant mother.
Of course, depending on the age of the first child, there may be some items that can be used, but there are always additional costs for every child and this can be a strain on a family budget. However, as things stand now, there is no chance of help from this Government. I ask the Minister to listen to the charities which have expertise in these matters and to reconsider what help can be given from April to the date when the Welfare Reform Bill will be enacted.
We know this legislation has been rushed through, allowing only nine days for consultation by the Social Security Advisory Committee, and without proper consultation and scrutiny it is lacking in evidence. I am not aware of any impact assessment and I wonder why there has not been one. I ask the Minister to take careful note of what has been said and the effect that this proposal will have on the families that once qualified for such support under a Labour Government but will no longer receive such support.
My Lords, I should like to take a rounded view of these regulations and put them in the context of the activity of the Government in terms of poverty. There are some issues which noble Lords on the Benches opposite have raised which require some answers from the Minister and I shall raise one or two myself.
First, it is important to recognise that these regulations have the effect of providing a level of savings within the DWP budget—that is undeniable—and that these types of decisions are never easy. At face value, of course, this could be simply seen as yet another cost-saving exercise, which is the thrust of the previous three speeches. However, it should also be looked at in the broader context. I shall examine both sides of the issue in my contribution to the debate.
I preface my remarks by posing a question to the noble Lord, Lord Touhig, the mover of this Motion of regret. I shall not correct him on his Welsh mutations; I shall explain to him afterwards—
Yes, the “d” should be a “t”.
The question is about the level of savings that he and his party are looking for in the public finances and whether they are put back into good order within five years or, as I understand it from his party, within seven years. Perhaps he can tell me because I have been struggling to find the answer to the question. What is the level of interest on the loan that the country now has and the debt that we have to repay if it is to be spread over seven years rather than five, which I think was his party’s policy? At the moment we have to repay £120 million a day in interest for the next five years. If we went for the seven-year position, what savings would we need to look at from within the budgets of all the departments in the country? I still fail to understand that. As we all know, it is easy to stand up and say, “Do not cut this or that”, if in the end the summation does not add up to the figure—which I understand is the position of the Labour party at the moment.
However, I recognise that this is part of a package designed to save money and that, if the circumstances for the country were appropriate, we would not have wanted to do this. If the finances were strong, I doubt whether this would have appeared on the horizon. Fundamentally, the judgment here comes down to the question of whether this particular set of regulations fits within the whole scheme of reforms and changes to our work and benefits regime, in the context of the economy as we find it. You cannot see one particular benefit set in isolation without considering the rest. Right from the beginning when the universal benefit regime was talked about in your Lordships’ House, and through the discussion and questions about it here, I have always been attracted by one of its fundamental aims—a fundamental aim of the whole revision of the benefits structure from its current complex base to something much more straightforward and simple—which is to lift people out of poverty. The impact assessment produced by the Government showed figures which, frankly, would have made everybody around this Chamber smile.
The principal aim of the universal benefit Bill and the new work programme is to lift people out of poverty. That programme itself requires investment: it has a £4.5 billion price tag. Part of that has to be funded from within the savings that can be made from the department, and part is coming from new money that the Treasury has made available. In making this change in these regulations, are we ensuring overall that the poorest and most vulnerable are being supported while helping to lift large numbers of our people out of poverty? That is the fundamental question against which you set these regulations. If the answer to that is yes, then, clearly in the context of that whole regime, you have to move forward upon that basis.
There are some problems and concerns, and some of them have been raised already. I echo some of them and pose a new one in questions that I hope the Minister will answer at the end. First, we have this interim period between the universal benefit Bill passing through your Lordships’ House and its becoming an Act in our country. In that interim period, the current interest-free loans will no longer be available. There is a danger that the people who find themselves put in most difficulty by these regulations will turn to high-cost lenders. What comfort at all can the Minister offer for where these people might turn in that interim period so there will be no difficulties for them? It is a short, one-off period before the new loan arrangements for purchasing, say, a cart, buggy and all those matters are in place.
Secondly, as has already been alluded to, what happens when a second child is born in a family and there has been no claim for the first child? You can imagine the circumstances where that might happen. Someone who is in work, has appropriate leave and reasonable funding behind them, might decide that it is not worth the effort, hassle or for other reasons—it might be that parents provide some of this equipment—and do not apply for the grant. Then perhaps there is a period of no work and when it comes to the second child it is difficult to find that sort of money. What happens when this is the first application within the family but the application is for the second child? Again, I would value an answer from the Minister.
My third question will have a much better answer than is the case under the current circumstances. What happens if you have multiple births—twins or triplets? As I understand it at the moment, if you have two children, you only get one grant. If you have twins at present, you get just one grant of £500 but, as I understand it, you will now be eligible for two grants. I would be grateful if the Minister could clarify that issue.
Turning back to the issue of where these savings will go, we have to look at these matters in the round. I have talked about the work programme and the universal benefit Bill. I would also like to look at the other issue relating to children, which is the child tax credit. I understand that there is going to be a recycling of £1.25 billion of savings back into the child credit system in the next financial year and just under £2 billion —£1.85 billion—in the year after. If the child tax credit is designed for anything, it is to enhance support to poorer children and families. Taken in the round, will these measures ensure that the poorest and most vulnerable in our society are protected? I am sure that few noble Lords feel entirely comfortable with these regulations, especially given the as-yet-to-happen benefits of the changes being put in place by the Government, to which some of these savings will contribute. However, we need to be certain in our own minds that the whole package, seen together, will help to lift people out of poverty and will protect those who are most vulnerable in our society.
My Lords, I respond in part to what the noble Lord, Lord German, has just said. My noble friends have made a strong case for why this measure should not be made by the Government. The noble Lord makes a perfectly fair point: we are in a mess with our public finances and what else would we do? In these circumstances, political choices have to be made. The thing that worries me about the Government’s policies is that, yes, there is a welcome increase in the child tax credit, but if you put that on one side there is an accumulation of things that will hit very poor families particularly hard. We had a debate last year—it was one of the first debates that I spoke in when I arrived—on the child trust fund, which is being abolished. We know that the housing benefit changes will particularly affect poor families in rented accommodation in high-rent parts of the country; some of those might well be young families where there has been a separation and the only alternative is to move into high-rent property. We know that the Sure Start budgets are being preserved, but only in cash terms, and that there is quite a squeeze on them.
In terms of political priorities, the Government have decided to target poor families, I am afraid to say. That is morally very wrong. It belies the claim that in addressing the crisis—I do not underestimate the fact that we have a very serious public finance problem— we are all in this together. Frankly, the people who are being targeted are the people who do not have a strong voice, who perhaps are not very politically motivated and who do not often go to the ballot box, although they may do so a little more frequently from now on than they have in the recent past. None the less, they are people who do not have a record of voting in elections and they are easy game in political terms. That is what I find so disreputable in this targeting of poor families with cuts.
One thing that we have all learnt in the past 10 or 15 years from a lot of new evidence is that there is, first of all, a clear relationship between poverty and stress in the family and between stress in the family and child development. Many eminent experts have validated that relationship, but we are choosing as a result of this measure to increase the pressure on those poor families, which will lead to more stress and have a negative impact on child development.
Some people in the government parties think that if you face a choice of priorities it is better to spend the money on services than on financial transfers. There is a bit of that here and I think that it is one of the reasons why the Government decided to tackle the welfare budget. Of course, there are reforms in the welfare budget that we all want to see. I am not saying that there should not be any reform in the welfare budget, but it is wrong to characterise this kind of thing as a handout; it has a profound effect on opportunity in later life and is vital if we really believe in opportunity. All the parties in this Chamber say that they believe in equal opportunity but, if we believe in equal opportunity, focusing the available money on poor families and helping their children to get a good start in life is one of the most important things that as a society we can do.
As I listen to this debate, I find myself completely out of sympathy with those proposing this Motion. It reminds me of attitudes that I thought we had moved past, of assuming that the state has an unlimited pot of money and that any spending is necessarily morally good. Of course, we all like justifying giving money to people, but the truth is that welfare has two sides to it. Every pound that we give to a family who are welfare recipients is a pound that we take in tax from another family who are having to bear the burden of supporting the first family.
A measure of welfare is, of course, an essential part of a modern society, but it is not a one-way street. We have to balance the amount of money that we spend on our welfare budget with the amount that we are prepared to take off other hard-working families who are not receiving these benefits. When people think about families spending additional money on new equipment for new children, they should spare a thought for the hard-working families who are also often poor but not in receipt of welfare benefits and who are not being given money to go out and buy a new buggy, cot or changing mat et cetera. Those people resent paying extra money in tax when they do not think it absolutely necessary that the recipients get it.
I would not and do not criticise the fact that there is the grant for first children, which is appropriate, but I do not accept the argument that the most useful way in which we could spend extra money taken in tax is to make this grant available for subsequent children. If we want to deal with equality of opportunity, I would much rather spend that money on education than give it to people to spend on buying a new buggy. We need to keep this in perspective and accept that there are two sides to every pound spent on welfare. It is not simply about taking money out of some endless pot owned by the state.
My Lords, I am grateful to the noble Lord, Lord Blackwell, for reminding us of some of the attitudes that still live strongly within the Conservative Party. I am astounded that no Member on those Benches leapt to their feet to dissociate themselves from those remarks.
I commend my noble friend Lady Sherlock for tabling this Motion. I know that she feels passionately about the issue and that it is only unforeseen circumstances, to which she has to attend, that prevent her from being here today. I am grateful to my noble friend Lord Touhig for stepping into the breach and moving this important Motion and to my other noble friends for their contributions to the debate and for setting out so clearly why this, of all the Conservative cuts, is emblematic of the unfairness in the way in which the parties opposite have gone about reducing the deficit and in the political choices that they have made in doing so, as my noble friend Lord Liddle said. It is far from the case that we are all in this together, as the cumulative impact of their cuts falls hardest on women and children, as many commentators have demonstrated, and on the poorest families. Before I touch on that broader issue, I shall deal, first, with the anomalies in the amendment as it stands in its own terms and, secondly, with the manner in which it was introduced.
This grant was designed, first, to help low-income families—not all families, as it was targeted on those with very low incomes—with the essential expenditure that we all know is considerable around the time of a baby’s birth. Secondly, in a point not yet touched on tonight, the grant was made conditional on receiving advice from a health visitor or midwife to try to ensure that those women who particularly need maternal services but who often do not seek them, or do not seek them early enough, were introduced to antenatal services.
The amendment to the regulations, as we know, will restrict the grant from this April to low-income families where the baby is the only child under 16 in the household. If this grant has to be restricted, and I do not accept that that choice was inevitable, the threshold of 16 years for other children in the household is ridiculously high, for all the reasons that my noble friends have given. It will exclude families who, for example, contain older children from a previous relationship, a young sibling or another young relative of one of the parents. It will disproportionately affect larger families, including those who tend to feature in some minority ethnic groups. It will particularly hit poor families in overcrowded accommodation where the space to keep bulky equipment for years on end is well nigh impossible. The first question that the Minister has to answer tonight is on why the threshold of 16 years has been chosen. Why not, at the very least, accept the much more reasonable and understandable recommendation from the Social Security Advisory Committee’s consultation of five years? What is the rationale for 16 years?
The restriction of the grant will also mean that some of the most disadvantaged mothers will not now have to have that early appointment with a health professional and so will be less likely to access antenatal services when they should. Gingerbread has pointed out that many low-income single mothers have poor experiences of maternity services and are more reluctant to get involved with them. Research published last year by the Royal Society of Medicine shows that single mothers were less likely to have accessed antenatal care within 12 weeks of pregnancy, to have had a scan, to have had a postnatal check or to have initiated breastfeeding. This lack of early care has serious and long-term consequences for the well-being of their children. We know from the nurse/family partnership projects the long-term benefits in the quality of the parenting and the impact of that on positive child development and maternal well-being that follows from close engagement with antenatal and postnatal services.
The Government have said that other measures such as the Healthy Start voucher also involve a condition of talking to a health visitor, but the eligibility criteria for these vouchers are very different from the Sure Start maternity grant and many women will not qualify. If the Government persist with this amendment, what action do Ministers propose to take to bring these mothers into services at the right time and to protect the well-being of those unborn children? What will replace the mechanism of the maternity grant of connecting health professionals with the most disadvantaged women early in pregnancy?
The second issue, from which in my view those anomalies arise, concerns the manner in which the amendment was brought in. My noble friends have spoken about this. There was no impact assessment; no consultation to speak of, just over a week for the advisory committee to consult; no rationale for the threshold of 16 years; and no explanation of why, even if this needed to be changed and there was no alternative, no other options in changing the grant were taken forward.
A number of other options were available, any one of which would have mitigated the negative impact that this proposal will have. We know that 52 per cent of children in single-parent families grow up poor. The financial hardship of these families, exacerbated when children come along, will be further exacerbated by this measure as it stands. As my noble friend Lord Touhig has said, and I could not agree more, the DWP claim that the amendment will not impact on child poverty figures, because the grant is a lump sum and will not affect annual income, is, frankly, risible; it is the kind of Civil Service-speak that gives government a bad name.
Why were none of the alternative options accepted? What does the Minister think will be the impact on low-income families? Sadly, it is difficult to escape the conclusion that the Government wanted simply to save the maximum amount of money without a great deal of concern about the consequences.
Finally, there is the broader issue. This proposal, although it is by far probably the worst, has to be considered alongside all the other cuts that the Government are making to services and support for families, especially for the poorest families. If we look only at government cuts to support for new parents, let alone for poorer families in general, we see that the cut in the Sure Start maternity grant is only one of a number: the abolition of the health in pregnancy grant; the abolition of the baby element of the CTC; dropping the planned toddler element to the child tax credit; axing contributions to the child trust fund completely, even for the poorest children; reducing the tax credit disregard; and reducing the percentage of childcare costs that can be claimed through working tax credit. The charity Family Action has estimated that these six measures alone will take away over £1,700 from poor parents during pregnancy and the first year of that child’s life.
On top of that, for families more generally, there is the freezing of child benefit; the freezing of working tax credit; the cutting of council tax benefit; the capping of income support for large families—I could go on. There are also the massive cuts in local authority funding, which has not protected Sure Start and many other local services on which poor families depend. I cannot believe, despite what the Minister may feel that he has to say this evening, that he can support this measure. It is mean, punitive and unnecessary.
I had hoped, particularly given the drubbing that they received in the Barnsley by-election, that we would at least see some Liberal Democrats speaking today to defend their position as champions of fairness. Sadly, though, we did not; the speech of the noble Lord, Lord German, was far from that. I hope that it is not too late for more Members opposite to support this regret Motion and to try to demonstrate that at least some of them have the interests of poor families at heart. I support the Motion.
My Lords, I start by thanking the noble Lord, Lord Touhig, for bringing forward the Motion, which has given us a chance to discuss the issues. I have listened with great interest to the points that have been made around the House.
Before I go into specifics, I apologise for the fact that these regulations were laid very close to the date on which they came into force, and for the lack of courtesy this showed the House. I have asked officials in the Department for Work and Pensions to review where the processes broke down on this occasion so that we can avoid similar situations in future. I hope this will reassure Members that we have taken the criticisms seriously and are striving to ensure that Parliament always has at least 21 days to consider regulations. During the period of policy formulation there were some difficult and sensitive issues to be resolved about how we defined the family unit and what, if any, exceptions would apply. These may, on the face of it, appear to be straightforward changes. However, it was important that we got the policy right before pressing ahead with the regulations. I acknowledge that we underestimated the time that was needed to undertake this work, which is a lesson learnt for future policy development.
As women can claim the Sure Start maternity grant up to 11 weeks before their baby is due, it was necessary for the regulations to come into force on 24 January for them to apply to babies due on or after 11 April of this year. If they did not, we risked reducing the planned savings by around £1.4 million for each week the change was delayed. Any delay could have impacted on our wider reform strategy, which is to refocus resources from small, poorly targeted, ad hoc payments on to a wider package of ongoing support for those in greatest need, initially through changes to tax credits and the personal allowance, and in the longer term through universal credit.
In response to the questions asked by the noble Lord, Lord Touhig, and the noble Baronesses, Lady Gale and Lady Hughes, I confirm that an impact assessment was published in January. I regret the misapprehension that has circulated. There were some criticisms of the extent of the impact assessment. In particular, it was thought that there was inadequate information on ethnicity. That was due to the fact that the data simply were not available for that piece of analysis. However, the impact assessment as a whole was available.
As noble Lords have already described, the amendment to the Social Fund Maternity Grant Regulations limits payment of the £500 grant made to low-income and benefit-claiming families to the birth of the first child only. It was announced as part of last year’s emergency Budget in June. The change will come into effect for all births on or after 11 April. It will also apply to adoptions and other similar arrangements. The previous policy, under which a family could receive a grant of £500 for each child, was a generous one. It was also expensive and poorly targeted. It took no account of the number of children the family had already or of the fact that families, whatever their income, do not buy new items for each subsequent child. Our new approach is the most equitable way of providing support to low-income households with a new child. This was one of a range of measures needed to reduce the deficit we inherited from the previous Government, which, as my right honourable friend the Chancellor of the Exchequer commented at the time, is the largest budget deficit of any economy in Europe, with the notable exception of Ireland.
The urgent need to manage the deficit has presented a series of difficult choices. We have not shirked from this responsibility. As a result we are dealing decisively with the country’s record debts, planning for the future, making sure that work pays, while at the same time remaining committed to protecting the most vulnerable in society. The decision to restrict the Sure Start maternity grant to the first child was not an easy choice. We believe, however, that the new policy targets support to those families who are starting from scratch, without any baby clothes or equipment, and so for whom the one-off costs are highest. The reason we have structured it so that the payment goes to the first child—this picks up the question asked by the noble Baroness, Lady Hughes—is because in this way we ensure that the mother will receive antenatal health advice and is connected to those services at the beginning of the building of her family.
The intention for this grant—picking up the point made by the noble Lord, Lord Touhig—was never to cover all the costs of healthy eating. It was related to maternity items and associated costs of having a new baby. The Healthy Start vouchers, which remain in place, are designed to cover that requirement.
My noble friend Lord German asked a series of questions on how the structure works. Currently, a family receives a payment for each child in a multiple birth. Under the new structure, a multiple payment will be made if the first birth is a multiple birth but not if a subsequent one is. My noble friend asked what would happen when a second child was born but there was no claim associated with the birth of the first one. The grant would not become available under those circumstances given the structure that we have.
We are mindful that this change may mean that some low-income families need to borrow to cover certain costs associated with the birth of the second or subsequent child. To protect the poorest from the risk of high cost or even illegal borrowing, my honourable friend the Minister for Pensions has included provisions in the Welfare Reform Bill, which is in another place, to extend access to budgeting loans for maternity items, which are currently exempt. This will ensure that the poorest households have access to interest-free borrowing. I hope that noble Lords will support this important measure when it reaches this House.
As noble Lords have pointed out, we recognise that there will be a gap of around nine months between the point at which Sure Start maternity grants are restricted and Royal Assent of the Welfare Reform Bill. However, families will continue to have access to existing financial support. For example, budgeting loans are already an important source of financial support to the most vulnerable families when they face unexpected financial pressures. Currently, people are able to apply for a loan for a broad range of needs, including new or replacement furniture, household items and clothing. While maternity items are specifically exempted from the current budgeting loan scheme, families expecting a new baby may require funding for items that fall within the broad categories that are currently met by a payment. I would encourage people to use this scheme in this period, where appropriate.
In addition, community care grants will continue to be available to support the most vulnerable families in difficult circumstances. For some, this may be around the time that their baby is born; for example, a new mother who leaves a violent relationship and needs help to set up a new home may be eligible for a grant. Healthy Start vouchers will continue to be available to expectant mothers and families on low incomes to help with the cost of maintaining a healthy diet for mothers and young children. Pregnant women receive one voucher per week worth £3.10; families with babies aged under one receive two vouchers per week worth £6.20; and one voucher per week worth £3.10 is available for each child aged between one and four.
We must not lose sight of the fact that this change is needed because of the deficit position. Restricting Sure Start maternity grants in this way will make savings for the Exchequer of £73 million a year. Other options that would have produced similar savings were of course considered. One option was to reduce the payment to £250 for each child. However, we took the view that it was preferable to provide a more substantial contribution toward the costs associated with a first baby than to spread the available funding more thinly. As I have said, paying a grant for every baby is neither well targeted nor the best use of the limited resources available. Another option was to restrict payment to those in receipt of an income-related benefit. This option was discounted because it would penalise low-income working families and would be out of kilter with the principles underpinning wider changes to the welfare system.
As I mentioned earlier, there were a few tricky policy issues that we took longer than expected to consider and resolve. The first thing to clarify was how the policy should apply to different family compositions—that is to say, whether grants should always be available for the first child a woman has or is expecting, or whether to take account of other children in the household, including, for example, a partner’s child from a previous relationship who lives with the couple and for whom they have responsibility. We concluded that the fairest solution was to look at the make-up of the family unit as a whole. Given the purpose of the grant, it seemed that basing eligibility on whether there was already a child under 16 in the household would ensure consistency, whatever the family circumstances. The regulations, however, contain an exception for teenage mothers who are dependent on their parents. In a scenario where the mother’s siblings are under 16, this will not exclude the teenage mother from receiving a grant.
Secondly, as noble Lords know, the Social Security Advisory Committee and the Merits Committee have questioned why the grant is available only when there are no other children in the household under the age of 16 rather than, say, 10 or five. This point was picked up by the noble Baroness, Lady Gale. In response, I would say that setting the threshold at the under-16 mark is consistent with the definition of a child that is used generally within the benefits system. I hope your Lordships will agree that a policy based on the family provides a fairer outcome than a strict interpretation of a first child.
Sure Start maternity grants are provided in recognition of the financial difficulties experienced by parents on income-related benefits and certain tax credits. They are one-off lump-sum payments that do not increase annual income or improve long-term outcomes. I recognise that around 150,000 families a year will no longer be eligible for this grant. This is an inevitable consequence of the need to make savings. However, there was a balance in the Budget and the spending review which took away some elements and added others. Among those that were added were a big increase above inflation for the child element of child tax credits and personal tax allowance. Clearly, in the years to come, there will be very substantial increases in universal credit. Overall, the net impact on child poverty of all the measures has been neutral.
As Frank Field said in his recent report:
“It is family background, parental education, good parenting and the opportunities for learning and development in those crucial years that together matter more to children than money, in determining whether their potential is realised in adult life”.
The Government can better spend their money elsewhere. The best way to tackle poverty is to address its root causes. We want to give every child a fair start in life through their early years and schooling, which is why we have introduced the fairness premium, worth £7.2 billion, to support the poorest at every stage.
I shall concentrate on what the noble Lord, Lord Liddle, called the “profound effect” of these contributions. The blunt truth is that, despite substantial increases in this grant and the introduction of the health in pregnancy grant, there has been no change in birth-weight, which is a primary measure of maternal health. There has been no perceivable impact in that area of putting in money in that piecemeal way.
I turn to the point made by my noble friend Lord German about tackling poverty in a coherent way. We are designing the most radical transformation of the benefits system with the universal credit. As the impact assessment showed, it will take 950,000 people out of poverty by injecting a gross figure of £4.6 billion a year every year, once the whole system is in place, to the people who need it most. It will be properly and coherently targeted, looking after people right the way through, and not with bits and pieces of money directed where it is thought best. It will be a coherent structure but, to achieve that, we have to start chipping away at the bits and pieces. That is the difference in the policy that we have introduced. We are fully committed to achieving the goal of eradicating child poverty by 2020, and we shall set out our proposal for doing so in March. I hope that the noble Lord will not press his Motion.
I thank all noble Lords who have taken part in what has been a very good short debate. I especially thank my noble friends Lady Massey, Lady Gale, Lord Liddle and Lady Hughes for their important contributions. I am very sorry that we were unable to convince the noble Lord, Lord Blackwell. I do not think that £4 billion of cuts in child support, hitting the poorest in our community, is defensible. The noble Lord, Lord German, might have taken issue with my use of the Welsh word “dwp”, but then of course he is not a man from the Gwent valleys. He seemed a little uncomfortable defending Tory cuts. I have only one word to say to him and his colleagues on the Liberal Benches, and that word is “Barnsley”.
The Minister was right to offer an apology at the start, because there has been a failure in proper communication and consultation on this measure. However, I think that the most disadvantaged in our society need to know that some people are on their side. The great socialist, James Maxton, said that poverty is man-made and is therefore open to change. I think that one way to demonstrate that it is open to change is by testing the opinion of the House tonight.