Child Care

Debate between Marcus Jones and Lucy Powell

Tuesday 19th November 2013 Commons Chamber

[Lucy Powell]

I will plough on and give way later.

Under this Government, average weekly part-time nursery costs have increased by 30%. Put another way, child care costs have risen five times faster than wages. In the past year alone, they have risen at more than double the rate of inflation. It is typical of the Government to pretend that things are going well when the reality is that many parents are finding it an incredible struggle to find and afford the child care they need. On top of the crisis in places and hikes in costs, parents have also seen their support fall. Families with two children have experienced a reduction of about £1,500 a year in tax credits, hitting low-income families the hardest. At the time of the 2010 spending review, the Office for Budget Responsibility warned the Government that cuts to child care support would have a negative impact, saying that they would

“affect the hours worked and participation in the labour market”.

Yet the Government have taken no notice and parents face an increasingly difficult child care crunch.

[Mr Marcus Jones]

Will the hon. Lady give way?

[Lucy Powell]

I am going to make some progress.

Let me turn to the Government’s response. They may have deleted reference to it from their website, but the Prime Minister once promised that they would be

“the most family-friendly Government…ever”.

Yet they have wasted three years doing very little. The Minister’s flagship agenda on ratios has been abandoned; the nursery offer for disadvantaged two-year-olds is being met with delivery problems; and their tax break scheme is too little, too late and benefits the richest the most. On child care ratios, the Deputy Prime Minister agreed with us that changing ratios could even increase prices. He said that the evidence was “overwhelmingly against” changing the rules on ratios, and went on to say:

“I cannot ask parents to accept such a controversial change with no real guarantee it will save them money—in fact it could cost them more.”

While we welcome extra support for disadvantaged two-year-olds, one in three councils tell us that they do not have enough places to meet this policy.

Childminder agencies are up in the air, with no clarity about how they will work or what they will do. The Minister is running 20 pilots across the country. So far, we know that at least two of those pilots will charge, although we do not know who will bear the cost. Will Ministers give us a guarantee that childminder agencies will not push up prices for parents?

The Government’s tax-free child care policy is too little, too late for parents. The extra investment in child care the Government are promising is dwarfed by the £7 billion a year of cuts they have already made for families with children. The scheme does not start until 2015, and it excludes families with children over the age of five. It benefits families earning up to £300,000 a year, helping the richest the most while leaving low and middle-income families struggling to make work pay, particularly for second earners. This policy will do nothing about costs.

By contrast, Labour has a plan to tackle the child care crunch. Our policies will make a real difference to mums and dads, get our economy moving, and help parents to tackle the logistical nightmare they face. As my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) rightly pointed out, seven out of 10 mums said they would work were it not for the high costs of child care. Expensive child care is acting as a drag on our economy. If our employment rate for mothers moved up to the average of the world’s top five nations, 320,000 more women would have jobs and tax receipts would rise by £1.7 billion a year. The Government gloat about their record, but most of the jobs they have created for mothers returning to work are part-time, low-paid jobs. Over 1 million of those people want to return to full-time work, but the full-time jobs do not exist.

Labour Members take the child care crunch seriously; we are not as complacent as Government Members. We would expand free child care for three and four-year-olds from 15 to 25 hours per week for working parents. That is worth over £1,500 a year. This is a fully costed Labour commitment. We would pay for this policy by ensuring that the banks pay their fair share, increasing the bank levy to an extra £800 million a year.

For school-aged children, many parents increasingly struggle to find decent before and after-school child care. The Government abandoned our extended schools programme. We will set down in law a guarantee that parents can access wraparound child care through their local school if they want it. This will stimulate innovation and collaboration to meet the logistical nightmare described by Members today.

Child care is at the heart of the cost of living crisis for many families. While parents cry out for action from this Government, all we have seen is in-fighting and prevarication while costs have soared and provision fallen. Our offer of 25 hours free child care for working parents of three and four-year-olds will make a real difference to families struggling to make ends meet. I hope colleagues on both sides of the House will support our motion.