Social Fund Maternity Grant Amendment Regulations 2011

Lord Liddle Excerpts

Monday 7th March 2011 Lords Chamber

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.

[Lord Liddle]

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.

[Lord Blackwell]

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.

European Social Fund (EUC Report)

Lord Liddle Excerpts

Wednesday 3rd November 2010 Lords Chamber

[Lord Liddle]

My Lords, I welcome this report and I thank the noble Baroness, Lady Howarth of Breckland, for her excellent speech in introducing it to the House. As a new boy, I have seen this afternoon two excellent examples of the work of the European Union Committee, which is, unfortunately, one of the few examples in the United Kingdom of an attempt to contribute to intelligent debate on the future of the European Union. It is a pleasure to participate in this debate.

I would like to make three points: first, to support the plea of the noble Baroness, Lady Howarth, for the Social Fund to be retained; secondly, to argue that its objectives should be aligned more closely with the Europe 2020 strategy; and, thirdly, to make the case that its delivery in the United Kingdom should be more flexible. I would like to tackle those points in reverse order.

First, on delivery, I read in the report the representations of the third sector, which feels that it is difficult to access Social Fund money for projects. I also read the views of the Local Government Association, which points out that current ESF management and delivery is far from perfect. The fact that ESF money is managed by a range of different government agencies means that local authorities find it hard to help prioritise the fund towards local need. The LGA goes on to give its view that councils, groups of councils or local enterprise partnerships should set the ESF strategic direction and ensure that it delivers outcomes that are relevant to that need. I would like to support that.

However, the local economic partnerships were but a gleam in the eye of the right honourable Eric Pickles when this report was prepared so it could not have considered that point. It seems to me that there is a strong case for the use of the Social Fund to be devolved to local level so that we get away from this silo delivery mechanism through the Department for Work and Pensions. That would fit in with the efforts of the Government to take forward the principle of Total Place so that all the various bodies that have something to do with helping the disadvantaged to gain skills—Jobcentre Plus, the Skills Funding Agency, the FE colleges, the police, probation, social work and all those sorts of groups—can combine their efforts in programmes on the ground. I ask the Minister what his view is of delivery and whether he sees a radical change away from the kind of centralisation that is pursued under the present arrangements.

Secondly, on objectives, the Social Fund is perhaps a case of not too little subsidiarity—which we debated earlier this afternoon—but too much, in the sense that member states throughout the Union basically use the money available under the Social Fund to supplement what are essentially national programmes. There is not real EU value added additionality. A big problem for the EU is that our national leaders put a lot of effort into devising things such as the Lisbon strategy, which is now the Europe 2020 strategy, which sets a comprehensive set of objectives for the European Union, but they do not ensure that there is a link between those EU objectives and processes—the guidelines, the monitoring mechanisms, the reports on member state actions that are produced in Brussels, the open method of co-ordination—and the way that the EU budget is spent. If there is to be more purchase over what happens in member states, there has to be that link between the EU budget and EU-agreed policies. When we look at the Europe 2020 strategy, we see that there are several items—youth on the move, new skills for new jobs and the platform against poverty—for which the Social Fund could be used.

I would like to draw particular attention to the platform against poverty. The Prime Minister signed up to this at the June European Council. For the first time, EU poverty targets will involve help to get the hardest-to-reach people into work as one of the methods of addressing poverty. If we sign up at EU level to these targets, surely we can also sign up for the proposition that the Social Fund should be retained and should be used in order to take forward those targets. What is the Government’s policy on that?

That brings me to the future of the Social Fund. I am a strong supporter of the existence of the structural funds and I do not agree with the view that HM Treasury had under the previous Government that we ought to try to get rid of them. I remember getting quite upset about that when the proposition was initially put forward. Just as I was about to send off some intemperate memo to the Prime Minister to say how wrong I thought that was, one wise official told me, “Oh, don’t worry, Roger, let them go and argue it. They’ll get nowhere because the Germans will never agree to it”. The Treasury thought that it had found some friend in the German finance ministry who thought that the structural funds should not be applied to the richer member states. Then they came up against the reality of German politics—remember that Mrs Merkel represents a constituency in the former East Germany, where these funds are important in demonstrating to the German taxpayer that they are getting some value from their contribution to the EU. I doubt that there is much real prospect of getting rid of the structural funds, but I would like to hear that from the Minister.

I would also like to hear a recognition from the Government that there is a real UK national interest in supporting the structural funds, in particular the Social Fund. That national interest is that we very strongly want to see a better functioning single market in Europe. However, the only way that we will win political consent for that objective is if there are accompanying social policies that deal with the problems of winners and losers in that enhanced single market.

These are my views: we should retain the Social Fund; it should be more closely aligned with EU policies; at local level, its delivery should be more flexible; and, we should also get away from the centralisation that characterises what now happens. With that, I commend this report.