COMMITTEE FOR SOCIAL DEVELOPMENT

Simon Hamilton MLA

Chairperson

To all MLAs

Legislative Consent Motion - Savings Accounts and Health in Pregnancy Grant Bill

The Minister for Social Development is to table the following Legislative Consent Motion for debate in the Assembly:

“That this Assembly agrees that the provisions in the Savings Accounts and Health in Pregnancy Grant Bill (consequential on the proposed repeal of the Saving Gateway Accounts Act 2009) dealing with the supply of information by the Department for Social Development and the classification of Saving Gateway accounts as an excepted matter under Schedule 2 to the Northern Ireland Act 1998 should be considered by the UK Parliament."

The Committee agreed to prepare a short Report to be sent to all MLAs in advance of the debate. This is attached and includes a summary of the Committee’s consideration of the Legislative Consent Motion; Ministerial and Departmental correspondence and the relevant minutes of evidence.

Yours sincerely,

Simon Hamilton MLA
Chairperson
Committee for Social Development

Report on the
Legislative Consent Motion associated with the
Savings Accounts and Health in Pregnancy Grant Bill

Contents

• Background
• Committee Consideration

Appendices

• Minutes of Evidence
• Ministerial correspondence:
  • Letter from the Minister of Social Development to Chairperson of the Committee for Social Development
  • Saving Accounts and Health in Pregnancy Grant Bill
• Departmental correspondence:
  • 18 November 2010
  • 29 November 2010
• Departmental Memorandum

Background

1. The Savings Accounts and Health in Pregnancy Grant Bill repeals the Saving Gateway Accounts Act 2009 and will end eligibility for Child Trust Funds and abolish the Health in Pregnancy Grant.
2. The Saving Gateway Accounts Act 2009 introduced a cash savings account for people on certain benefits. The Government was to contribute fifty pence for each pound saved up to a limit of £300 - thus providing a financial incentive to savers on low incomes. The first accounts were to be available nationally to savers in 2010.
3. The Department for Social Development is permitted to provide information to Her Majesty’s Revenue and Customs (HMRC) regarding claimants in receipt of certain benefits and tax credits, but this provision is limited and does not allow information to be supplied for the purposes of the identification of persons who might benefit from a Saving Gateway account. The Saving Gateway Accounts Act 2009 was to introduce measures to allow the sharing of this kind of information between the Department and HMRC. The Act was also to make Saving Gateway Accounts an Excepted Matter.
4. At its meeting of 26 February 2009, the Committee considered and agreed to support (on a without prejudice basis) the Legislative Consent Motion related to the Saving Gateway Accounts Act 2009.
5. Following the Budget of June 2010, the Westminster Government decided that the Saving Gateway provisions could not be afforded. Consequently, the provisions of the Saving Gateway Accounts Act 2009 –including information-sharing between HMRC and the Department in respect of prospective Account holders and the classification of Saving Gateway Accounts as an Excepted Matter – are to be repealed.
6. The Savings Accounts and Health in Pregnancy Grant Bill will also end eligibility for Child Trust Funds. Child Trust Funds were to be available to children living in the UK for whom Child Benefit is being received and who were born on or after 1 September 2002.
7. The Health in Pregnancy Grant is a one-off tax free payment to pregnant mothers designed to help with costs in the run up to a baby's birth. It is understood that the G overnment intends to stop paying the Health in Pregnancy Grant for women who reach the 25th week of their pregnancy on or after 1 January 2011. The Savings Accounts and Health in Pregnancy Grant Bill will also end eligibility for this grant.

Committee Consideration

8. The Social Development Minister wrote to the Committee Chairperson on 15 November 2010 indicating that he intended to seek the Executive’s support for the Legislative Consent Motion associated with the Savings Accounts and Health in Pregnancy Grant Bill and asking for the Committee’s view. The Minister’s letter and accompanying Departmental information is include at Appendices 1 and 2.
9. On 25 November 2010, the Committee took evidence from Departmental officials on the proposed Legislative Consent Motion – see Appendix 3. The officials explained that the Legislative Consent Motion applied solely to the information-sharing provisions which were designed to facilitate the now defunct Saving Gateway Accounts. Officials also indicated that the motion would relate to the classification of Saving Gateway Accounts as an Excepted Matter.
10. The Committee expressed disappointment at the repeal of legislation relating to Saving Gateway Accounts and sought further information on the evaluation of pilot Saving Gateway Accounts schemes in Great Britain.
11. The Committee agreed that it would support the Legislative Consent Motion insofar as it related to information-sharing to facilitate Saving Gateway Accounts and the classification of Saving Gateway Accounts as an Excepted Matter.