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'(1A) The amount prescribed under subsection (1) in respect of children to whom section [additional contributions by Inland Revenue for children in care (No. 2)] applies at the time the initial contribution falls to be made shall be four times the amount prescribed in respect of other children.'.
Amendment No. 14, in page 6, line 31 [Clause 11], after '10', insert
'or [additional contributions by Inland Revenue for children in care]'.
Amendment No. 70, in page 6, line 31 [Clause 11], after '10', insert
'or [additional contributions by Inland Revenue for children in care (No. 2)]'.
Amendment No. 17, in page 10, line 27 [Clause 19], leave out 'and'.
Amendment No. 18, in page 10, line 31 [Clause 19], at end insert
'and
'(d) that the Inland Revenue was required under regulations under section [additional contribution by Inland Revenue for children in care] to make a payment in respect of the child but either the payment had not been made or, if it had, the amount of the payment had not been credited to the child trust fund held by the child.'.
Amendment No. 71, in page 10, line 31 [Clause 19], at end insert
'and
'(d) that the Inland Revenue was required under regulations under section [additional contributions by Inland Revenue for children in care (No. 2)] to make a payment in respect of the child but either the payment had not been made or, if it had, the amount of the payment had not been credited to the child trust fund held by the child.'.
Amendment No. 21, in page 11, line 3 [Clause 20], after '10', insert
', [additional contributions by Inland Revenue for children in care]'.
Amendment No. 72, in page 11, line 3 [Clause 20], after '10', insert
', [additional contributions by Inland Revenue for children in care (No. 2)]'.
Amendment No. 22, in page 11, line 9 [Clause 20], after '10', insert
'or section [additional contributions by Inland Revenue for children in care]'.
Amendment No. 73, in page 11, line 9 [Clause 20], after '10', insert
'or section [additional contributions by Inland Revenue for children in care (No. 2)]'.
Amendment No. 23, in page 11 [Clause 20], leave out line 33 and insert
'9(3) or [additional contributions by Inland Revenue for children in care]'.
Amendment No. 74, in page 11 [Clause 20], leave out line 33 and insert
'9(3) or [additional contributions by Inland Revenue for children in care (No. 2)]'.
Amendment No. 24, in page 13, line 3 [Clause 22], after '10', insert
'or [additional contributions by Inland Revenue for children in care]'.
Amendment No. 75, in page 13, line 3 [Clause 22], after '10', insert
'or [additional contributions by Inland Revenue for children in care (No. 2)]'.
Mr. Osborne: I suspect that I will not make as much progress with this new clause as I did with the previous one, but it is worth trying because the issue that I am trying to address is children in care. The issue was raised on Second Reading, and gave rise to one of our best debates in Committee, in which more than the usual number of Committee members participated. Unfortunately, it is one of the few areas in which the Financial Secretary has not been prepared publicly to indicate any significant change, although she was careful not to rule out change in the future. I hope that we can secure a firmer commitment from her today—we shall see.
As I said in Committee, the chances of children in care are among the poorest in our society. When I was preparing for this debate, I went through the statistics, which are indeed striking. Only 53 per cent. of the 6,400 young people who left care last year had at least one GCSE or GNVQ, compared with 95 per cent. of all
children. Only 8 per cent. of children in care achieved at least five good GCSE grades, compared with 50 per cent. of all children. Only 56 per cent. of children leaving care remain in full-time education at year 11, compared with 72 per cent. of all school leavers.The Office for National Statistics says, rightly and sensibly, that
- "educational achievement is felt to be an important indicator of children's life chances".
The record is depressing and we should all feel some shame. The state assumes the ultimate responsibility for bringing up children in care, so it is depressing that we have such poor results. Many of the reasons for their poor life chances and educational attainments are beyond the scope of the Bill. They are to do with the children's background, the emotional disturbance and possible abuse that they may have suffered in their families, and their upbringing in local authority care. However, perhaps another reason is that they have so little stake in society.
It is undeniable that, at 18, almost all children in care lack anything like the sort of financial support on which most people can count from their families as they start work or seek higher education. The Bill goes to considerable lengths to give children in care some sort of start in life. I fully commend the Government for their efforts to ensure that those children get a child trust fund that is properly set up at the right time and that they receive the full £500 initial contribution. However, I am sure that the Financial Secretary agrees that, apart from the Government top-up contribution, not many people, if any, will make additional contributions to the child trust funds of children in care. I do not claim that there will not be instances of people making contributions, but I am sure that the generalisation is correct and that those children are unlikely to enjoy significant contributions to their child trust funds.
By the time that children in care reach the age of 18, they will have approximately £1,000 and perhaps a little more in their child trust fund. I do not claim that £1,000 is insignificant and I do not dispute the reports and statistics that the Financial Secretary deployed in Committee and when she appeared before the Treasury Sub-Committee. They showed that even £1,000 can make a significant difference to people's attitude to saving and is a substantial asset for people on low incomes. It is also a vast improvement on what many children in care currently have.
As the hon. Member for Lancaster and Wyre (Mr. Dawson) said, some local authorities give children a sum of money on leaving care, but others give them, as he memorably put it, no more than a bin bag in which to take their clothing. One of the great advantages of child trust funds is that, for the first time, all children in care will have a substantial asset by the time they reach 18.
We could do more, or at least look to do more. New clause 6 would require the Inland Revenue to make additional contributions, which would be pegged as a percentage of the average value of child trust fund subscriptions in the previous year. I suggest that partly because if child trust funds are a success and people use them, the contributions to children in care will also increase. If it is clear that many people are making contributions to their children, it is fair that children in care should not be left behind.
I freely concede that the other reason for pegging the contributions as a percentage of the average value of child trust fund subscriptions in the previous financial year is that I had to suggest a new device, different from the one that I tabled in Committee. That proposal would have put a proportion of child benefit—otherwise forgone for children in care—into a child trust fund. I believe that that probably has more elegance and merit than my current proposal, but I had to change it.
I accept that the new clause carries a financial cost, which depends on the size of the contribution. We cannot therefore include an accurate figure. If the proposal that I tabled in Committee were implemented and fully taken up—if all forgone child benefit were paid into the account of all 60,000 children in care for the relevant year—the cost, according to the Library, would be £33.5 million. However, the sum that we would pay in under the new clause could be far less than the £560 that the proposal that I tabled in Committee would entail. Children tend to move in and out of care, and would not necessarily receive the full amount during a year. Therefore, £33 million is at the top end of what the proposal might cost; I suspect that it would cost significantly less. I do not want to be seen to be profligate, so I have left the amount to be decided by future regulations and made it subject to affordability.
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