Childcare Payments Bill

Debate between Catherine McKinnell and Mark Durkan

Monday 14th July 2014 Commons Chamber

[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 the 1.25 million families that will benefit from this, are 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 devoid 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. 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—

Corruption (International Business)

Debate between Catherine McKinnell and Mark Durkan

Wednesday 11th December 2013 Westminster Hall

[Catherine McKinnell]

I thank the hon. Lady for that intervention. In fact, I was just coming to that point about what we can do on the issue of shell companies and beneficial ownership. I very much welcome—we all do—the steps that the Government have taken to date. Indeed, I personally called for those steps to be taken in my role as shadow Treasury Minister during the consideration of this year’s Finance Act. We have become the first country in the world to commit to developing a public register of beneficial ownership, but it is vital that we implement it effectively. Above all, it must achieve its fundamental purpose of identifying the individuals who benefit from and control a company.

[Mark Durkan (Foyle) (SDLP)]

Like my colleagues, I congratulate my hon. Friend on her success in securing this debate and on her work with the all-party group. As she says, the Government’s commitments in relation to making public the register of ownership are very important, but we have to be absolutely clear that the register will extend to trusts, because trusts in particular have been used to hide ownership, not least—as she said herself—in some of the overseas territories and Crown dependencies.

[Catherine McKinnell]

The hon. Gentleman makes an important point. The key is that this register of beneficial ownership cannot be used as a smokescreen to hide the identities of companies and the individuals who control them. It must be part of the solution to ensure that we have greater transparency, and it must have the effect that I know the Government want it to have.

It is important that beneficial owners are required to provide information such as a passport number or date of birth, so that the register provides a unique, verifiable identifier for every person listed. It is also important that the information goes through some means of verification by Companies House. For example, it could be cross-checked with other registers, such as those of the Driver and Vehicle Licensing Agency or the passport authority. Where company ownership is not direct, individuals should be asked to explain how they exercise control, and when control changes it should be noted within a reasonable time period. Lastly, it is important that the information is published in line with the principles outlined in the G8 open data charter, to which the UK is a signatory, and on a very practical note, it must be machine-readable and searchable, because the amount of information contained will be vast and it is of no use if it cannot be searched.