| Previous Section | Index | Home Page |
4.15 pm
A great deal more needs to be done to ensure that the funds work well for young people in care. Nevertheless, anyone who was at last month's meeting or will be at the one later this month will have met, or will meet, young people with intelligence, ability and, in some cases, extraordinary resilience. I believe that they will use their trust funds well, and will benefit from having an asset over which they have complete control.
That is an important message for young people leaving care. The Government should complement it by assuring those young people that they are prepared to consider whether, in principle, they could make regular payments to the trust fund of every child in care—above and beyond what goes to other young people, above and beyond what they or their parents might contribute, and above and beyond what local authorities might contribute. They should say that, because the state owes a duty of care to such children, they will support them even better.
Mr. Laws: I agree with what has been said by the hon. Members for Lancaster and Wyre (Mr. Dawson) and for Tatton (Mr. Osborne). There seemed to be widespread agreement in Committee that the Government had a particular responsibility to look after children in care, given that they were essentially in loco
parentis. It was felt that the children should not lose out even more in relation to the value of trust fund accounts on maturity. That might well happen if no contributions were made by relations, as they would probably be in the case of most other children.The problem in Committee was the lack of amendments commanding the support of the Committee as a whole and, in particular, the Financial Secretary, perhaps for understandable reasons. Our amendment focused on the issue of the initial contribution. We accepted that it would be defective if we were to deal with children who might go into care later in their lives.
Either the hon. Member for Tatton or the hon. Member for Witney (Mr. Cameron) proposed an annual contribution tied to the level of child benefit. Although the hon. Member for Tatton might regard it as something of a Sir Humphrey excuse, I have some sympathy with the Minister's reservations about mixing up a benefit designed for a particular purpose with a contribution to a child trust fund account designed for a very different purpose.
We wanted to table amendments that would not just get past the hon. Member for Tatton and the Clerk, but meet with the Financial Secretary's approval. I agree with the hon. Member for Lancaster and Wyre that it would not be appropriate for us to rely on discretionary contributions from local authorities, and that if we did so, money for children in care might filter into trust fund accounts to which they would have no access until later in their lives. We certainly would not want to divert money that would go to such children anyway.
New clause 10 and amendments Nos. 69 and 70 hold on to our first proposal that the initial contribution to the accounts of children in care should be twice that for any other child—in other words, four times the standard contribution and double the amount that would go to children from families on lower incomes. In order to address the annual contribution issue, we have added the proposal that an annual contribution should be linked not to child benefit, but to the minimum subscription that can be put into child trust fund accounts from time to time, perhaps on a monthly basis.
We discussed the reasonable minimum amount in Committee, and I will not anticipate that argument because we will deal with it in a separate group of new clauses and amendments. The Government have set the minimum subscription at £10, which, I am embarrassed to say, is slightly higher than the sum that I have been paying into my godchild's savings account and may cause me to revise my contribution upwards. Nevertheless, the minimum subscription is a useful benchmark by which to consider the contribution that the Government might feel is reasonable and appropriate.
In addition to an enhanced initial contribution to the child trust fund accounts of children in care, we propose that the Government should also pay in, presumably on an annual basis but it could be biannual or quarterly, an amount linked to the minimum monthly contribution, assuming that the contribution were paid monthly. In other words, if the amount were paid for a full year, it would be 12 times the minimum subscription rate, which has been set at £10, so it would be £120.
Using back-of-the-envelope calculations and the figure that the hon. Member for Tatton cited earlier of 60,000 children in care, that proposal would incur a significantly lower annual cost than his proposal to link contributions to child benefit. The cost would be £7 million to £8 million, which is affordable given that the annual cost of the Bill is likely to be between £250 million to £260 million once it is fully up and running—presumably the cost will be significantly higher once further contributions are made when children reach seven, 11 and 14.
Such an addition to the cost is affordable, and linking additional contributions for children in care to the minimum subscription is as a good a rough and ready measure as any that we might arrive at using another source. The additional contributions would be linked to the minimum subscription to child trust fund accounts for children who are not in care, where it would be reasonable for the Government to aspire to the idea of people adding such a contribution on to their own children's child trust fund accounts.
As the hon. Member for Tatton implied earlier, I do not necessarily expect the Financial Secretary to give way on the matter today. The Government have not tabled counter-proposals on children in care that we can debate today, but the Financial Secretary's responses in Committee were helpful and I hope that she can reassure Liberal Democrat Members and some Labour Members that she will go away, examine the issue and introduce a workable proposal to allow additional contributions for that particularly vulnerable category of young people.
Ruth Kelly: The Bill is about extending life chances, especially to those children who are particularly vulnerable and disadvantaged in our society. I accept that children in care undoubtedly fall into that category, despite their individual successes, to which my hon. Friend the Member for Lancaster and Wyre (Mr. Dawson) has drawn attention. I pay tribute to him for his work with young people in care, and he is right to celebrate their achievements.
I accept the argument made by the hon. Member for Tatton (Mr. Osborne) that children in care are particularly disadvantaged. The new clauses and amendments seek to boost the child trust funds of those children in care with accounts opened by the Inland Revenue in the absence of a child benefit claim. The hon. Gentleman suggests that few additional contributions will be made to those accounts, but I would not jump to that conclusion. It will be 15 years at least between the setting up of the accounts and the time that the first ones mature, which is a considerable length of time. I do not know how the accounts will evolve in the future, but I suspect that we will see creative and imaginative thinking on how we can best serve the most vulnerable groups in society. I am not convinced that fewer contributions will be made to the accounts of children in care.
New clause 6 proposes that the Inland Revenue should contribute a sum related to the average value of contributions made to child trust funds in the preceding financial year, whereas new clause 10 would require the Inland Revenue to pay 12 times the minimum contribution level set out in the regulations. It is all too
easy, as my hon. Friend the Member for Lancaster and Wyre suggested, to point to disadvantaged children and not recognise the successes. I would argue that it is also far too easy to point to the Government and claim that the answer always lies in more financial contribution from the centre. I understand the case that has been made, and I was so attracted to the new clause tabled by the hon. Member for Witney and his thinking on the matter because he recognised that point. There are other ways in which the interests of vulnerable groups can be advanced, and he proposed a creative and interesting solution to advance the interests of disabled children, which I have committed to considering further. We have 15 years before the first accounts mature, and I am sure that we will see innovative thinking on other ways to advance the interests of other vulnerable groups during that time.It is true that children in care may be some of the most disadvantaged while they are in care, but the vast majority move out of care and have families to care for them and contribute to their child trust funds, as other children have. While children are in care, there is nothing to stop grandparents, other relatives and friends contributing to their accounts. Indeed, the new clause fails to address the category of children who have a child benefit claim set up for them. When a child is looked after by a local authority, payment of child benefit ceases after the first eight weeks, recognising the fact that the state, rather than the family, effectively maintains such children, including those placed with foster parents. That is right, as the Government provide for the cost of children being looked after through the revenue support grant paid to local authorities for personal social services expenditure. I do not believe that further Government endowments for those children are the best way to help them. Children move in and out of care and any Government payment would be hit and miss in its effect.
My hon. Friend the Member for Lancaster and Wyre mentioned the important Green Paper, "Every Child Matters", and made a powerful case for engaging young people with their child trust fund plan. Local authorities should be encouraged to consider that account in the pathway plan that they develop with children leaving care. Financial considerations are already taken into consideration in the pathway plan, but I will ensure that specific consideration is given to the child trust fund account. We are already aware of some local authorities that take financial education seriously. For example, Warwickshire county council has introduced a scheme in which a savings account is opened for foster children to help to make them aware of the value of money as they build up savings. However, most financial education will still be delivered through the school curriculum, which is the best place for such education to take place because it reaches all children. In the coming months and years, we will consult various bodies and organisations on financial education and how we can make it real for all children, but especially for vulnerable children.
| Next Section
| Index | Home Page |