Children: Affordable Childcare

Baroness Morgan of Ely Excerpts

Thursday 9th January 2014 Lords Chamber

[Baroness Morgan of Ely (Lab)]

I begin by thanking my noble friend Lady Massey for securing this important debate on a matter which is having an effect on families up and down the country. I have just returned from two weeks of looking after my 10 year-old and my 12 year-old for the holidays. I am utterly exhausted and have come back to work for a little rest, so I cannot begin to imagine what my noble friend Lady King is going through with her three children and her brand-new baby. I welcome TJ to the world, and I am sure that noble Lords will all join me in congratulating her on the birth of her new child.

I therefore start by paying tribute to all the mums and dads throughout the country and the armies of childminders and pre-school teachers, who are crucial in the early years of a child’s development. Having a child is an expensive business, but under this Government it is a more expensive business than ever. The decision as to whether to stay at home is of course an individual one, and rightly so, but it is based on a number of factors. Today, I fear that that choice is curtailed for many who have often been highly trained and highly educated by the state—people who were making a valuable contribution to the workplace—but for whom the cost of childcare simply does not make it worth their while to go back to work. They drop out of the workforce, they lose their opportunities for promotion and they often lose confidence, and so do not go back into the workforce at the level that they came from.

I reflect on the point made by my noble friend Lady Bakewell about the guilt that mums have to carry when they work. This was brought home to me very clearly when I was an MEP. One day I came home on a beautiful summer’s day, I had my three year-old and one year-old in the garden and I saw a wasp lying on the ground. The wasp was in trouble; he had hurt his wing, or something. I moved the wasp so that my daughter would not put it in her mouth and my son said, “What are you doing?”. I said, “Look, he has hurt his wing”. “Oh yes, he has hurt his wing, he wants his mother”, he said. So I said, “You go and look for his mother”. Two minutes later he came back. He said, “Mum, I have looked everywhere for the wasp’s mother. I think she has gone to work”. That is when you feel bad.

Many people with young families who are already contending with higher fuel bills and transport costs are really struggling now with these rocketing prices—30% up, as we have heard, five times more than pay since the coalition Government came to power. It is worth spelling that out in financial terms. As we have heard, the average cost of a full-time nursery place for a child under two is £11,000, £211 a week. Let us not forget that the average salary in this country is £23,000 before tax, so half the money is supposed to go on childcare. That is double the amount that people spend on a mortgage. That is just for one child. We need women to engage in the workforce to increase economic activity, because this is not just a massive financial burden for parents, it is a burden for the wider economy, which is dragged down by the fact, according to the Resolution Foundation, as we have heard, that fewer women with children work in the UK than in many of our competitor countries. In a survey of mothers carried out for Asda, 70% of stay-at-home mums said that they would like to go back to work but they would be worse off in the current climate because of the cost of childcare.

We need to use the talents of everyone if we are to succeed as an economy and keep social security bills down. Making it easy for women to combine work and family is essential to the nation’s standard of living. The OECD states that there is a need for fertility rates to reach 2.1 births on average if we are to remain economically stable. Studies have proved that women have fewer babies in countries where it is too difficult to combine childcare with work.

In the late 1990s, birth rates in Britain were at an all-time low, with 1.6 babies per woman in 2001, but by 2010, the birth rate had risen to its highest level in 40 years, reaching two per woman. More British-born mothers had more children, in addition to immigrant mothers. Why? Because every signal that the Labour Government sent out was that babies and children are welcome in our society. Government childcare and tax credits were a key factor. Maternity leave doubled under the Labour Government, paternity leave was introduced and mothers were for the first time able to request flexible working hours. Child benefit rose and child tax credits added greatly to family incomes. Childcare costs for the poorest were covered up to 80% by credits, with free nurseries for three and four year-olds and 3,500 Sure Start children centres. Let us not forget that the child trust fund gave new babies a nest egg.

A lot of that has changed. We have recently had a triple whammy combination that has formed a crisis. We have fewer places available, despite an increase in demand, a cut in support to parents and an increase in costs. That has led to an economic burden which, of course, has hit the poorest hardest. As we have heard from my noble friend Lady Prosser, the Government’s cuts have led to the closure of 576 Sure Start Centres, a key plank in giving support to those mothers from the poorest communities.

According to Ofsted, there are 35,000 fewer childcare places, despite the increase in demand. The basic rules of economics suggest that to bring prices down you need to increase supply, but this Government are doing exactly the opposite. There is evidence to suggest that the Government’s proposed agency approach to childminders will push prices up even further. Can the Minister give us a guarantee that it will not?

The squeezed middle are also carrying an enormous burden. The average person earning £23,000 would be left with less than £100 a week to pay for everything, if they had already paid for their essentials of housing, fuel, transport and food—no holidays, no treats and not enough to cover one child’s weekly nursery bill. That is the reality of the working poor; it is the cost of living crisis. If a mother decided to work part-time on an average wage, she would have to work from Monday to Thursday to pay off the weekly childcare cost; it is hardly worth going to work.

The problem does not stop when the child starts school. Many parents are now willing their children to grow up fast and start school to relieve the intense cost pressure. I am one of those mothers who spend half their life trying to organise their children’s pick-ups and drop-offs at pre-school and after-school care. Parents need quality and reasonably priced flexible childcare if they are to manage to hold down a job as well.

The Labour Party recognises that the issue of childcare is fundamental to this cost of living discussion. That is why Labour has a costed pledge, funded by an increase in the bank levy, to extend free childcare for three and four year-olds from 15 to 25 hours per week for working parents of three and four year-olds. In addition, another measure that will have parents up and down the country heaving a sigh of relief is that the Labour Government will introduce a legal guarantee to access to wraparound care from 8 am to 6 pm at primary schools in England—we need to note that that is just for England. This is reinstating a programme that proved successful under the previous Labour Government, whereby, in 2010, 99% of schools in England were providing access to before and after-school childcare. This programme was abandoned by David Cameron, effectively ending that guarantee of a core offer of activities from 8 am until 6 pm for school-age children. Does the Minister regret the decline in wraparound childcare on this Government’s watch? Will Ministers now support Labour’s pledge for a primary childcare guarantee?

There is a proposal from the Government that things will change in 2016 but that is too late for mums and dads of today. What will happen today, tomorrow and the next day? By 2016, their children will be in school and it will be too late. There are three fundamental problems which have been addressed unsatisfactorily by the Government relating to childcare: the costs have gone up, the places have gone down and there have been cuts in support to parents. The Government really need to get a grip on the issue of childcare and demonstrate that they are on the side of children and families. All the current evidence suggests that they are out of touch and have no concept of the difficulties facing families today.