Catherine spoke on behalf of the Opposition during the Second Reading of the Childcare Payments Bill in the Commons yesterday (14th July). A transcript of her speech is below, and the full debate can be read here: www.publications.parliament.uk/pa/cm201415/cmhansrd/cm140714/debtext/140714-0002.htm#14071442000001
Catherine McKinnell: I want to begin by saying that the Opposition welcome any new investment in child care and any extra support for the millions of hard-pressed people—parents and families—up and down the country who are battling to juggle their work and family lives. We are the party that, in government, set the precedent for investing in early years and supporting the families that needed help the most and, as a result, tackling disadvantage and improving the life chances of children. Of course, those are aims and priorities that all political parties now accept, thanks to the progress that was made in that area under the last Labour Government. Welcome though any support is, however, the Bill still falls far short of the mark when it comes to making up the ground that has been lost under this Conservative-led Government in regard to meeting and furthering those goals.
Since 2010, all parents have seen reduced support, fewer child care places and spiralling child care costs. We know that families up and down the country are struggling with this. Investing in early years and focusing support on those families that needed help the most are among the greatest legacies of the last Labour Government, and those principles are now universally accepted by all parties of government. Under Labour, parents benefited from a range of policies and investments that helped more parents, but particularly single mothers, into work and lifted more children out of poverty. As a result, more children were given a better start in life.
Charlie Elphicke: Does the hon. Lady accept that, according to the measure adopted by the previous Labour Government, child poverty actually rose under that Administration, and that it has fallen under this Government?
Catherine McKinnell: No, I do not accept that. It is tempting for Government Members to quibble about measures and markers, and I know that a lot of time has been spent arguing about how to measure child poverty instead of recognising the desperate increase in it. The Institute for Fiscal Studies has projected that there will be 1 million more children in poverty by 2015 than there were in 2010. Government Members need to be careful when obsessing and arguing about those measurements while ignoring the reality, which is that hundreds of thousands more children are now living in homes that their parents cannot afford to heat, and struggling in households where their parents cannot afford to put food on the table and are using food banks.
When we look back on Labour’s record in government, we are proud of the introduction of the Sure Start local programmes and the subsequent huge expansion of Sure Start centres up and down the country. We are proud of the free part-time nursery education that we introduced for all three and four-year-olds. We are proud of the more affordable and higher-quality child care that we brought in through the employer-supported child care voucher scheme, and of the child care tax credits and the introduction of the early years curriculum. We are also proud of the increased financial support for families with children, including the introduction of tax credits and the increases in child benefit and maternity pay and grants. Those policies and changes were aimed at giving every child the best possible start in life but, perhaps more importantly, they lifted 1 million children out of relative poverty and more than 2 million children out of absolute poverty.
Chloe Smith (Norwich North) (Con): Does the hon. Lady now recognise measures, then?
Catherine McKinnell: I genuinely do not understand the hon. Lady’s intervention. Obviously, we recognise that there are measurements of child poverty. The point I was making was—[Interruption.] No, I did not say that I did not recognise measurements of child poverty; we introduced them. What I find unacceptable is that the Government quibble and argue about how to measure child poverty rather than taking the necessary action to deal with a problem that is staring them in the face—namely, an increasing number of children in poverty. As the IFS concluded in 2011, the reduction in child poverty during the first two terms of the Labour Government was
“by far the largest and most sustained since”
figures began in 1961. As UNICEF pointed out when it compared child poverty levels internationally in 2010,
“without UK Government intervention in the form of cash transfers, tax credits and services for children and families, the UK would see a child poverty rate three times higher than its current levels.”
Government Members seem to be quite vexed about this issue, but I think that that is because they have a shameful record. Unfortunately, the story under this Government has been very different from that under the Labour Government. That is the case despite the promise in the Conservative manifesto in 2010 to
“make Britain the most family-friendly country in Europe”.
It added:
“We will help families with all the pressures they face: the lack of time, money worries, the impact of work, concerns about schools and crime, preventing unhealthy influences, poor housing.”
Let us not forget the Liberal Democrats—I am pleased that one of them is here today. Their 2010 manifesto claimed:
“Liberal Democrats believe every family should get the support it needs to thrive, from help with childcare through to better support for carers and elderly parents. Liberal Democrats will improve life for your family.”
Have those promises been translated into reality? We know that parents are facing a child care crunch because child care costs have spiralled, the number of places has fallen and the support that families receive from the Government has been slashed. One consequence is that progress on reducing child poverty has stalled.
Hywel Williams: Does the hon. Lady agree with Plaid Cymru that the answer to the child care problem, particularly in areas where there is little or no provision, is a child care guarantee for all, based on the Nordic model that has operated very successfully in Sweden for a long time? Does she agree that she has a role in persuading her Labour friends in the Welsh Government to adopt that model?
Catherine McKinnell: We all want to see more child care places. We recognise not only that there is a challenge in meeting the costs of child care, but that we need to do something on the supply side if we are to see the costs come under control. That is why I will set out exactly how Labour has proposed to deal with that issue. Although we support the measures that are being proposed, despite having quite a number of questions to raise about them, we suggest that there are actions that the Government could take today on the supply side to increase the number of child care places that are available, which has been falling.
Sarah Newton (Truro and Falmouth) (Con): I take issue with what the hon. Lady is saying because of my experiences in my constituency. I have just looked at the data and there are 100,000 more places in nurseries today than there were in 2009. Of course, with that increase in supply, prices are falling.
Catherine McKinnell: I do not recognise what the hon. Lady is saying. If she is saying that that is happening in her area, I would be interested to see the data to back that up. We know that 35,000 fewer child care places are available and that prices are rising. Parents out there are struggling with the cost of child care—indeed, the Government accept that it is a challenge for many households up and down the country—and I think that they would find it deeply disconcerting to hear an hon. Member suggest that prices are falling and that everything is fine. Government Members seem to be very detached from the reality that families are facing up and down the country.
Charlie Elphicke: Will the hon. Lady tell the House how the number of childminders changed under the previous Government? Does she accept some responsibility for what amounted to a war on childminders by the Labour party?
Catherine McKinnell: Perhaps the hon. Gentleman is reading that argument from a Whip’s handout, although I know it is one that Government Members like to quote. The Professional Association for Childcare and Early Years, which I would trust more than the hon. Gentleman on this subject, has commented specifically on that issue, stating that that statistic has often been quoted in the past few months but it is not one that it recognises. The association does not recognise the statistics that the Government are trying to use to establish the case that Labour let the country down on child care. The reality and experience of households and families up and down the country is that Labour has a proud record of supporting families with children to get into work and with the costs associated with child care, and of ensuring there are enough child care places—certainly not the reduction of 35,000 places that we have seen since the Government took office.
Charlie Elphicke rose—
Catherine McKinnell: Does the hon. Gentleman wish to come back and dispute again what the Professional Association for Childcare and Early Years says?
Charlie Elphicke: For clarity, I did not speak from some handout. I have been concerned about this issue for a long time, and I garnered research from the House of Commons Library which sets out the official statistics on numbers of childminders. Those numbers massively reduced under the previous Government, which caused a lot of difficulties for families that I represent in Dover and Deal who are hard pressed and find it hard to afford more expensive child care options.
Catherine McKinnell: Perhaps the hon. Gentleman will look again at his House of Commons Library note and explain in his contribution why we have seen 3,000 fewer childminder places since the Government took office. Overall, there is a worrying trend of reducing child care places and rising child care prices, and he will understand that basic economics mean that households up and down the country are struggling to deal with the cost of child care. Many households—particularly women—are making the choice to stay at home because it is simply unaffordable to go out to work.
The Minister spoke passionately about the increasing number of women in work, but she will acknowledge that there is a lot more work to do on that and we still fall behind on maternal employment in OECD comparisons. We need to make progress on that so that parents who want to work can do so and so that child care is affordable.
Sarah Newton: There is no complacency whatsoever on the Government Benches about helping those hard-working families who are struggling with the costs of child care. The hon. Lady asked where I got my numbers from. I have just looked, and the Department for Education website’s annual survey of child care and early years providers clearly shows that the number of child care settings has increased and that prices are coming down, although there is still more work to be done. This is not the first time the Labour party has got the numbers wrong so I am not surprised, but she should have the good grace to acknowledge when she is wrong.
Catherine McKinnell: I thank the hon. Lady for her clarification, but we know that over the course of this Parliament we have seen a reduction in the number of child care places and an increase in the price of child care. Part-time nursery prices have risen five times faster than pay, and in the past four years alone in my region in the North East prices have risen by a staggering 50% for households that are already struggling to make ends meet. The average bill for a part-time nursery place of 25 hours a week has gone up to £107, and the average weekly cost of a full-time place has risen to £200 or more. It is hardly surprising that the Family and Childcare Trust has calculated that families are paying more on average for part-time child care than they spend on their mortgage, with some handing over a staggering £7,500 a year more for child care for two children—around 4.7% more than the average mortgage bill.
Hywel Williams: What does the hon. Lady make of the argument put forward by the Institute for Public Policy Research that a similar scheme introduced in Australia led to the doubling of child care costs in 10 years, and that the basic flaw of the scheme is that it is regressive?
Catherine McKinnell: The hon. Gentleman raises a very important point. We need reassurance from the Government that they have considered the data from experiences in other parts of the globe. Examples show that dealing only with the demand side, supporting parents with child care costs, simply increases the price of child care for families rather than bringing it down. Ultimately, that costs parents and the Government more, because they end up forking out more for a smaller number of child care places.
There seems to be a huge debate about the figures, but official figures show 35,000 fewer child care places across the country. In my region of the north-east alone, we have lost more than 5,000 places. Even the coalition’s flagship offer for two-year-olds, which is due to be extended in October, has floundered, with the child care Minister, the hon. Member for South West Norfolk (Elizabeth Truss), admitting last November that 38,000 of the 20% most disadvantaged two-year-olds—38,000 out of 130,000—did not have the places to which they were entitled. In May 2014, she updated the House on progress, with 10% of the most disadvantaged two-year-olds still without places. Perhaps most worrying of all is that there are 536 fewer Sure Start children’s centres than there were in 2010—an average loss of three a week. That is the figure we have, but the Minister removed the online database last autumn. Perhaps she will comment on this. I would have thought that, given her professed interest in supporting families and dealing with these issues, there would be a desire to continue to monitor the number of child care and Sure Start places available. It is alarming that we can no longer keep track of the figures on the Government website.
In addition to all that, parents have seen the Conservative Government give a £3 billion tax cut to the top 1% of earners, more than three quarters of whom are men. At the same time, parents have seen cuts of £15 billion. Support to families to balance their work and family life, such as tax credits, child benefit, maternity grant allowances and statutory maternity pay, have all been reduced. The reductions to tax credits alone have meant that some families have lost up to £1,560 a year, while the House of Commons Library estimates that families with newborn children could be up to £1,725 worse off over the initial two years.
New analysis of the households below average income statistics published earlier this month show that under this Government it is families with children who have seen the biggest falls in their income, relative to those without children. Since 2009-10, a couple with two children aged five and 14 are on average £2,132 a year worse off in real terms. In contrast, a couple with no children are £1,404 a year worse off. A single person with two children aged five and 14 is on average £1,664 worse off, compared with a single person with no children, who is £936 a year worse off. We know that everybody is worse off, but families with children in particular are bearing the brunt. These figures only reflect tax and benefit changes, and the impact of wages falling relative to prices has left working people on average £600 a year worse off since 2010.
Even more worrying is that new research published last week by the Resolution Foundation suggests that the official statistics may well have underestimated the fall in living standards, because they take no account of the wages of the self-employed. The fall in wages could be between 20% and 30% greater than originally thought. As we know, this could prove particularly relevant to women’s experiences, because according to the Office for National Statistics, women have made up more than half of the growth in the number of self-employed since 2008.
We must not forget that the true impact of this coalition Government’s failure is felt not just by parents, but by their children. The latest HBAI figures show that the progress Labour made in lifting more than 1 million children out of poverty has ground to a halt. Equally worrying, the number of children living in what is deemed to be material deprivation is on the rise, with 300,000 more children living in families that cannot afford to keep their house warm, 400,000 more children living in families that cannot afford to make savings of £10 a month, and half a million or more families unable to afford to replace broken electrical goods. Worst of all, a forecast by the Institute for Fiscal Studies indicates that while Ministers and, clearly, their Back Benchers squabble over how to adequately define child poverty, which seems to be a distraction from their failure to deal with it, almost 1 million more children will be living in poverty in 2020.
Charlie Elphicke: The hon. Lady challenged me on my figures. In a House of Commons Library note, taken from the Department for Education and Skills statistical volume, there were 365,000 childminder places in 1997, but by 2010 that number had fallen to 280,000. Does she recognise that that is a really poor record on child care with childminders?
Catherine McKinnell: The hon. Gentleman seems to have gone off the subject of child poverty, which is what we were dealing with. Going back to childminders, there was some movement in respect of the database of those registered when the Ofsted registration system came into place. If he is suggesting that he does not support Ofsted registration, I would be interested to hear more of his views.
Ms Ritchie: My hon. Friend is making a compelling case about the need for properly funded child care and the growing levels of child poverty, and she is characterising the position well. In that regard and in view of the volatility in the labour market, the slight economic upturn and the number of temporary or freelance-type workers, could she explain how those sort of people will be impacted by the Bill’s provisions? Will they find themselves in a more difficult position?
Catherine McKinnell: I thank my hon. Friend for that intervention, which brings us back to the issue of child poverty and the importance of child care in supporting families and particularly children in getting out of that situation. She raises an important point, and I shall be coming on to ask some questions about the Bill’s implementation in that regard. Contrary to the impression given by the Minister, there is still a lack of clarity about who will and will not benefit from the changes. I shall reflect only momentarily, Madam Deputy Speaker, on the wider point that my hon. Friend raises. Our very flexible labour market can make it difficult for many parents to manage their child care arrangements. We know that many women, for example, are subject to zero-hour contracts, which can make it very difficult to plan for child care and the costs and availability of child care, when people might not know what hours they will be working from one week to the next. I hope that the Minister will take all those issues into account, particularly in respect of supporting families, which could be dependent on the interaction between the implementation of this policy and universal credit.
Dr Thérèse Coffey (Suffolk Coastal) (Con): The hon. Lady mentioned universal credit. Earlier, she was saying how difficult it was to plan for child care. Government Members were surprised that the Leader of the Opposition did not condemn last week’s strikes, because those are exactly the kind of issues that are a nightmare for parents.
Catherine McKinnell: I think that the hon. Lady is straying somewhat from the subject of the debate, but I also think that a number of the workers who were involved in Thursday’s strikes were among the very lowest paid, who we know need this child care support and who are struggling to make ends meet. That was one of the motivating factors in the action that they took last week. I therefore do not think that the hon. Lady’s point was entirely irrelevant, but let me now return to the issue that is under discussion, which is child poverty.
There is concern about the fact that much of the progress that has been made has been either halted or, even worse, reversed by the Government’s policies over the last four to five years. The Government are absolutely on track to miss spectacularly their statutory obligations in terms of eradicating child poverty. As their own child poverty adviser Alan Milburn said recently,
“The Government’s approach falls far short of what is needed to reduce, let alone end, child poverty in our country.”
Madam Deputy Speaker (Mrs Eleanor Laing): Order. I must draw something to the hon. Lady’s attention. Child poverty may be ancillary to the Bill that we are discussing, but she said that the matter before us was child poverty, and it is not; the matter before us is the Bill. However, I am sure that the hon. Lady is illustrating her remarks by referring to child poverty, and that she will soon return to the subject of the Bill.
Catherine McKinnell: Indeed, the next sub-heading in my speech is “The Bill”, so thank you, Madam Deputy Speaker. My point was that child poverty was the issue—the issue in front of us—with which I was dealing before I took a number of interventions. That issue is very pertinent, because we know that the provision of affordable child care is one of the key measures that will help children to be lifted out of poverty. We know that enabling parents to go to work and to be in stable, secure employment is the primary way of enabling them to bring their families out of poverty.
Let me reiterate—in the context of today’s debate and the Bill—that we support any Government action that will help families who are struggling with the child care crunch. However, as we know, this additional support does not do nearly enough to make up some of the ground that has been lost over the past four years. For a number of reasons, there is doubt about how effective it will be even when it arrives, in about a year’s time, and about how much better off families will be. The bottom line is this: the Bill confirms that there will be no help for parents who are facing a child care crunch until after the next election, which means that there will be virtually no help with child care for an entire Parliament under the Conservatives and the Liberal Democrats.
Ben Gummer (Ipswich) (Con): I am glad that the hon. Lady has now returned to the issue that is before the House. She has talked about lost ground. In every single year of the previous 13-year Labour Government, child care costs went up. Last year, for the first time, they went down. Where was the lost ground in those two Parliaments?
Catherine McKinnell: Of course child care costs will rise with inflation, but we have seen a spiralling increase. Child care costs have risen much faster than wages, and the increase has been much faster than previous increases in terms of the natural economic cycle. When I talk about lost ground, I am talking about the support that is available to families across the board, which we know has been reduced on a range of fronts—not to mention the reduction in the working tax credits and child care tax credits that are available to working parents. I think that, in introducing the Bill, the Government have recognised that they have a problem, namely that there is not enough support out there for working families. We need to ensure that this Government support, although welcome, goes further. We need to ensure that it goes far enough, and is implemented properly. That is the basis of the questions that I now wish to put to the Minister.
Bridget Phillipson (Houghton and Sunderland South) (Lab): Is it not right that before 1997 child care was simply not regarded as an issue worthy of debate in the way that it is now? The action that the Labour Government took over 13 years brought this issue to the fore for the very first time. Previously people who raised this as a matter for Government to deal with were simply laughed at. For the first time, the Labour Government brought this issue to the fore and regarded it as a matter for Government action, not just for families to deal with on their own.
Catherine McKinnell: My hon. Friend makes a powerful and important point, and I think we should celebrate on a cross-party basis the fact that we now have consensus that the Government need to take on board this issue and that addressing it can improve the life chances of families, in particular children. That is a huge credit to the last Labour Government who pushed this issue forward and raised it up in terms of political acceptance and cross-party agreement and as an issue that Government cannot simply turn their back on.
None the less we have seen soaring costs, falling numbers of places and cuts in tax credits for thousands of families and, as a result, in 2015 families will be worse off than they were in 2010. Even when the help arrives, it is unclear who exactly will benefit from this scheme, and even then it is unclear how much better off some people will be and many might legitimately ask whether they will actually be better off. In the Government’s original consultation last August, they estimated that 2.5 million working families would be eligible for support under this scheme, but in their revised consultation, set out in the subsequent consultation response in March, that number was reduced to 1.9 million families, and therefore around 2.6 million children. However, the Government estimate that only two thirds of those 1.9 million working families—so, about 1.25 million—will have qualifying child care costs. As far as I can tell, however, Ministers have never properly explained what that crucial difference is, because clauses 1 and 2 of the Bill define qualifying child care based on two criteria—first, whether the child care is provided by a registered and accredited provider, and, secondly, where one of the main reasons for the child care is to enable parents to go to work—but that does not explain why 1.9 million families are eligible, yet only 1.25 million such families have eligible child care costs. In fact, as far as I can tell, the Bill does not specifically refer to qualifying child care costs anywhere. I see the Minister shaking her head and I am sure she would like to clarify this point.
Nicky Morgan: First, I said in my speech that qualifying child care costs would be defined in the regulations that have been published today and that, no doubt, we will be discussing in Committee. In relation to the other two points the hon. Lady raised, first I am sure she welcomes the fact that, as part of the announcements in March, we said tax-free child care must be rolled out much more quickly, which partly accounts for the change from 2.5 million to 1.9 million, as we are much better able to estimate because we are rolling it out over a period of 12 months. Secondly, we must appreciate that some families will want child care but it will not be for the purposes of going to work and therefore the taxpayer will not be paying for it. There is also the element of child care having to be Ofsted registered, and, again, many families will decide that they do not want to access formal child care which is Ofsted-registered as they instead have other child care arrangements. Again, that is something the taxpayer is not going to cover at this stage.
Catherine McKinnell: I thank the Minister for that clarification, but I am surprised she thinks it is acceptable that on the day we are debating this Bill on Second Reading we should be able to debate these regulations that have only been published today. I am also very surprised by the comments she makes about the timetable. The Government have obviously had to re-consult on this issue so they are far behind their original timetable anyway, so I am not—
Nicky Morgan: Will the hon. Lady give way?
Catherine McKinnell: In a moment I will. First, I will finish what I am saying, which is that this is far too little, too late, and no child care support is available from this Government for this entire Parliament, but I would be happy for the Minister to correct me on that.
Nicky Morgan: The regulations were published today for this Second Reading debate, earlier than might otherwise have been the case, because I wanted the House to be informed. Moreover, the consultation that we have launched in relation to the delivery providers in no way affects the Bill’s timetable. I would not want the hon. Lady to let the House think that the timetable is affected. It certainly is not. We intend that the scheme will be launched and ready for families to access from autumn 2015, as we have always said.
Catherine McKinnell: I was referring to the Government’s original timetable that they are already behind on, but I appreciate that it is intended this offer will be implemented in autumn 2015, as she says. We hope that that will be the case. However I do have a number of questions about the implementation. Unfortunately, Ministers have repeatedly refused to set out the specifics of who will be better off and by how much, or whether people will be better off as a result of these measures. I have tabled a series of written parliamentary questions to try to gain clarity on those points, but disappointingly, although not surprisingly, the answers from the Financial Secretary have not been helpful in the slightest. In many cases, the right hon. Lady has simply failed to answer the questions. It would appear from her responses that the Department is simply not aware of what proportion of families paying for child care will benefit from the Bill, how it will benefit different income groups proportionally, and what the average top-up will be per child once the scheme is up and running. It is hard to believe that the Treasury is not in possession of such data. Surely it is fundamental to understanding what the Bill’s impact might be on the Exchequer, and on children and families.
The only indication that we have about how the Bill will impact on different income groups is from work undertaken by the Resolution Foundation, which suggests that the scheme could be skewed towards higher earnings, which might go some way to explain why the Minister has been so unforthcoming with responses to the various questions put.
Mark Durkan (Foyle) (SDLP): On that very point, has my hon. Friend noted that the Family and Childcare Trust has made it clear that of the 1.25 million families that will benefit from this, that is only about half or slightly over half of those who are paying for child care costs, and 80% of those who will benefit under this measure are in the top 40% of the income distribution?
Catherine McKinnell: My hon. Friend raises an important point and puts forward compelling evidence as to why we need to question the details on this. [Interruption.] The Minister says that it is not true, but if it is not true, why is she not forthcoming with the Treasury data on this issue?
As Gavin Kelly, chief executive of the Resolution Foundation, pointed out, the Government’s decision to increase the spending cap is likely to benefit those on the highest incomes, despite the fact that it is low and middle-income families who are struggling the most with the rising costs of child care, for whom it is acting as a barrier to taking on more work. He said:
“About 80 per cent of the gains from this will flow upwards to those in the top half of the income distribution.”
Throughout the Bill’s passage in the House, we will continue to press for some clear, transparent information from Ministers so that parents can be clear about what they can and cannot expect to receive in support. At the moment, the Bill is completely void of any of this information.
None the less, despite a lack of answers from the Minister, there is a curious line in the Bill’s impact assessment, which states that, of those families that the Government say will gain as a result of the new scheme,
“the average additional support they will receive is £600 per year”—
£600 per year on average. That stands in complete contrast to the claims of Ministers who have implied that working parents are all in for a £2,000 child care subsidy. Indeed, the Financial Secretary’s own website, summarising her week of activities when she announced this revised child care scheme in March this year, suggested this was the case. She said:
“The new Tax-Free Childcare scheme which I am guiding through Parliament will provide 20 per cent support on childcare costs up to £10,000 per year for each child via a new simple online system. This will mean an average saving of £2,000 a year per child.”
I hope that she will set the record straight on that point, because her Department’s own impact assessment suggests a very different reality.
I would also like to take this opportunity to probe the Minister on the Government’s plans to support 85% of child care costs for all universal credit claimants. Under the Government’s original plans, only those universal credit claimants who paid income tax—the highest earning claimants—would be eligible for 85% of support. Everybody else would be covered for only 70% of costs. We welcomed these changes as they signified a reversal of the Government’s decision to cut the child care element of working tax credit from 80% to 70% in 2011, a move that we opposed because we recognised that it simply served to hit those parents who needed the support the most. But it would seem that this could be yet another example of the coalition Government giving with one hand and taking away with the other.
As Alan Milburn, chairman of the Government’s Social Mobility and Child Poverty Commission, has made absolutely clear, low-income families could still lose out despite the increase in support for those most in need. He told The Independent on Sunday:
“The Government has taken half a step forward. The announcement that 85 per cent of childcare costs will be met under universal credit from 2016 will help work pay for low-income families. This is very welcome. The sting in the tail is that this £200m expansion in childcare support will come from within the universal credit programme. This risks robbing Peter to pay Paul.”
The Minister did not provide any clarity when my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) probed earlier in relation to this, but there needs to be some upfront response. How exactly do the Government intend to pay for this increase in support?
There is another key concern. We now know that the universal credit programme is in complete disarray under the Secretary of State for Work and Pensions and the Treasury is refusing to sign off on the programme’s business case, and there are concerns that low-income parents may now be waiting until 2017 at the earliest to receive this welcome additional support. Again, I have tabled a number of written parliamentary questions to ascertain whether this will be the case, and, again, disappointingly but perhaps not surprisingly, the Minister has failed to answer any of these questions. So I put it to the Minister today: when can the 4 million low-income families who will be eligible for universal credit expect to receive support to cover 85% of their child care costs? [Interruption.] The Minister says she has said it, so will she give a cast-iron guarantee today that they will be in receipt of these payments by 2016? Will she confirm that at the Dispatch Box? No.
Mark Durkan: Does my hon. Friend recognise that whereas the new scheme seems to offer up to £2,000 per child, with no limit on the number of children, child care support under universal credit is capped, so anyone with more than two children is effectively losing out when compared with those who benefit from the new scheme? Would child care accounts not be a fairer way in universal credit as in this scheme?
Catherine McKinnell rose—
Madam Deputy Speaker (Mrs Eleanor Laing): Order. Before the hon. Lady replies to the intervention, I simply draw to her notice that she has now spoken for 44 minutes, which is more than twice as long as the Minister. I am not stopping the hon. Lady speaking because I appreciate that she is making some very good points and putting questions that have to be put. But before she considers taking other interventions, she might consider that other Members are waiting to speak.
Catherine McKinnell: Thank you, Madam Deputy Speaker. I am grateful for you guidance.
The final point I want to make concerns the delivery of this scheme. We are now some 14 to 16 months away from when the scheme should be up and running, according to the Government’s revised timetable, yet the Government still have not made a decision—at least publicly—about who will deliver the child care accounts through which parents will access Government top-ups and pay for child care. They originally announced in their consultation response that National Savings & Investments would be their delivery partner, but after ditching that decision and the preceding consultation process, they have since backtracked and reopened the consultation process.
Will the Minister tell us why the Government commissioned a £38,000 cost-benefit analysis report by Economic Insight, which recommended an open, competitive market model for delivering child care accounts, and then simply ignored the report’s recommendations and chose an in-house provider, NS&I, instead? Will she clarify who will be delivering the child care accounts under this in-house option, as it is my understanding that the former Economic Secretary to the Treasury, now Secretary of State for Culture, Media and Sport, awarded a seven-year outsourcing contract to Atos in May 2013 to deliver all customer-facing and back-office services to about 25 million NS&I customers? If the Government continue with the previous plan to have NS&I deliver child care accounts, will the Minister clarify whether it will in fact be Atos delivering them? If that decision is taken, does the Minister plan to renegotiate, or at least revisit, NS&I’s contract with Atos to ascertain whether the company is up to delivering and maintaining accounts to potentially 2 million parents considering that this would be significantly different from NS&I’s current activities?
Hywel Williams (Arfon) (PC): Does the hon. Lady share my concern that National Savings & Investments was only recently held to be in breach of its responsibilities to provide services in Welsh and had to change its services very quickly to conform to its legal requirements? Does that dent her confidence that NS&I might not be able to deliver services to everyone in Wales?
Catherine McKinnell: The Government need to reassure us over NS&I’s ability to provide this contract and to tell us whether services will be provided by Atos, especially as Atos’s delivery of universal credit and personal independence payments has been such a shambles. With just a year to go, it is important that Ministers get a grip and make some decisions. As with universal credit, any further delays in implementation will only hurt hard-pressed families who are already struggling with the cost of child care bills.
Let me turn briefly to our proposals for investing in child care which, on top of what the Government are providing today, would deliver a real difference to hard-pressed families who are struggling with the child care crunch. We have said that we will build on previous efforts and extend free child care for three and four-year-olds from 15 to 25 hours a week for working parents. We will give parents peace of mind by setting down in law a guarantee that they can access wrap-around child care—from 8 am to 6 pm— through their local school, if and when they want it.
As with the 15-hour early years entitlement, introduced under the previous Labour Government, the new 25-hour offer would be for 38 weeks of the year, which, would mean more than £1,500 of extra support per child per year. It would not demand that working parents spend more and more of their own money on child care in order to receive some cash back from the Government, as this Bill will demand of them. Regardless of what working parents of three and four-years-olds choose to spend on child care, they will be entitled to 25 hours a week for 38 weeks of the year.
We know that having school-age children can be a logistical nightmare for many parents, and that too many of them find it increasingly difficult to find after-school and before-school child care. According to a Department for Education survey last year, 62% of parents of school-age children said that they needed some form of before-and-after school care or holiday care to combine family and work, but of these, nearly three out of 10 of them were unable to find it. That is why Labour will introduce a primary child care guarantee to benefit parents of primary age children, because that is when families most require child care support.
Charlie Elphicke rose—
Catherine McKinnell: I will not give way, as I must make progress.
In conclusion, while we welcome any extra investment in child care, the Bill does not make up for how much more families are paying for child care under this Tory-led Government, and it confirms that no help will arrive for parents facing a child care crunch for at least another 14 months. Families have already seen their child care costs rise five times faster than pay. Many already spend more on their child care than on their mortgage. Parents have seen the number of child care places fall by the thousands, and, despite the Prime Minister’s promises to the contrary, too many communities have seen their local Sure Start children’s centres close.
Most stay-at-home mums, as well as working parents, have already said that child care costs are the biggest barriers to them either going back to work or increasing their hours. Working parents and families need help now, not in 14 months’ time. But equally importantly, Ministers need to come clean over who will benefit from this scheme and by how much, so that parents can make an informed decision about which form of support will be most appropriate for them.
We will support the Bill’s Second Reading as we welcome the additional support for families because we know how much they are struggling, but we will scrutinise every detail to get the answers that we put today, as there are many areas in which the Government are not being up front. Critically, this Bill falls far short of what is needed to make up for the last four years of spiralling costs, falling child care places and cuts to vital support for families. Parents deserve better than that, which is why the next Labour Government will extend free child care for all three and four-year-olds as well as introducing a primary child care guarantee to give parents peace of mind.