Childcare Bill [Lords]
Debate between Sam Gyimah and Emily Thornberry(9 years ago)
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Lucy Powell
Of course I will look at it. Perhaps next time we are having a Second Reading debate where funding is so critical, Ministers might care to let Opposition Front Benchers have sight of such important information before we embark on it. As the Minister knows, there remain key issues about the ability of the vast majority of providers in the sector, who are private and voluntary providers, to deliver these free hours, notwithstanding the challenges that remain for schools.
Emily Thornberry
Reference has been made to the cost of childcare review, and we have been told that 6,000 people have put in for it. It has 184 pages. We know that it is yet to be found in the Library, because people are burrowing away there looking for it.
Emily Thornberry
Yes, but it is taking a certain amount of time to print it off. Therefore, we have not been able to look at it in advance of this debate, nor even during the debate. In those circumstances, my hon. Friend presumably agrees that it really is a farce having this Second Reading debate now.
Lucy Powell
I do of course agree with my hon. Friend, who makes a very good point. This is all regardless of the fact that this policy still has a considerable funding shortfall, even under the new hourly rates, as the Minister himself has said. When Labour announced before the last election that we were seeking to increase the number of free hours from 15 to 25, he said that that policy would cost £1.2 billion. That is far greater than the funding allocation that the Government have put forward for an additional five hours a week. There are big funding gaps that they have yet to address, regardless of the hourly rate being paid and the information that has been put in the Library.
House of Commons Library analysis has shown that there are over 44,000 fewer early years childcare places today than there were in 2009. In addition, six in 10 local authorities tell us that they do not have an adequate supply of childcare for local parents. There is a downward trend in childcare places that should cause concern. As I said, private and voluntary providers make up the vast majority of childcare places in England. If there is not adequate resource for these nurseries, they will simply not offer the 30 hours, leading to a reduction in choice for parents. I welcome the increase in the hourly rate, but questions remain about how many new places will be provided. Without an increase in supply, costs will continue to rise for parents.
Parents will also be very concerned that the quality of childcare could be damaged by the Government’s failure to adequately support their proposals. A wealth of evidence from the Education Committee and Ofsted clearly identifies strong links between outstanding provision and the best qualified staff. Poor childcare is worse than no childcare, as the Committee reported, and can be detrimental to a child’s development. I am very concerned that unless the Government have answers on adequate funding, the result will be a diminution in quality provision. Can the Secretary of State give a commitment today that, beneath the proposals and those outlined in today’s autumn statement, there are no plans to reduce quality, to increase ratios or to lower requirements for those who can offer the free entitlement? In summary, insufficient funds and poor delivery could have the opposite effect to what the Government want and lead to fewer places, poorer quality and higher cost for parents.
The Government have ample time to address those concerns before their policy is due to be introduced in autumn 2017. We want to work with Ministers to ensure that their plans are credible and affordable and meet the tests we have set out. Part of the problem is that the Government have no clear strategy for childcare. I hope the Education Secretary will reflect on that and come back to this House in due course with an overarching childcare strategy. [Interruption.] Would the Under-Secretary of State for Education, the hon. Member for East Surrey (Mr Gyimah) like to intervene?
Emily Thornberry (Islington South and Finsbury) (Lab)
Providing more free childcare for working parents was supposed to be an easy win for the Government. There should be nothing difficult or controversial about it, given the level of support in the country for it in principle and the amount of support the Government would have in this House for it in principle. The Government, however, seem to have somehow made an extraordinary mess of the Bill. In fact, I cannot remember another occasion when a proposal that was so warmly received in principle produced a Bill that was so comprehensively rubbished by everybody who set eyes on it. There are so many questions in relation to it. The defence of the Bill we have heard today is high on rhetoric, but what we want is reality. We do not want fiction. The problem is not a lack of enthusiasm for the Bill in principle. The trouble is that, as my nan used to say, warm words butter no parsnips.
Surely the most important place to start is this: how is it going to be paid for? I am not an expert, but I have been looking at the Blue Book published today and asking some obvious questions. If the amount spent per child from September 2017 will be £5,000—if I am wrong about this, perhaps the Minister could please interrupt me—and we are talking about term-time only working, so 38 weeks a year, then 30 hours multiplied by 38 is 1,140 hours. On the face of it, that means £4.38 per hour will be spent on childcare. I have already explained to the Minister that the average price of childcare in Islington is £9.40 per hour. I am then told that I am wrong, the figures are pooh-poohed, or there seems to be some suggestion that not all the money has been put into the frontline, as if the head of my early years is upholstering her three-piece suites in mink, but that is just the price of education for three and four-year-olds in Islington. The prices are high as they are—it is just a fact.
Then I am referred to a cost of childcare review, which I am told is in the Library but it is not. I send people off to have a look in the Library and they ask around but nobody can find it. Then I am told it is online and that it consists of 184 pages, but I have not got all of them. I have got the ones I could and they total 59 pages. I have therefore had 59 of 184 pages during this debate. I am told that 6,000 organisations have contributed to this review, but I have nothing from any of them. I would like to read this sort of thing, because I take this seriously.
Emily Thornberry
Let me give the hon. Gentleman my view, which, again, is based on experience from my constituency. What happens is that the free entitlement is given to parents and a deal is done, whereby they get their free 15-hour entitlement and then they have to pay over the odds to be able to—[Interruption.] He shakes his head but I am telling him that this is what happens. Parents have to pay over the odds for the additional hours or they pay more money for meals; somehow or other this money is raked back to nursery providers, because they simply cannot provide the childcare at the level currently provided for. He has asked me a question, so I will ask him one, and I wonder whether he will be able to help me with it.
As I understand it, at the moment my local authority gets £4.84 per hour for three and four-year-olds, which is much less than the average charged of £9.40 per hour. If the new national rate announced today with such fanfare is introduced, will Islington actually be getting a cut and will our rate be going down to £4.35 per hour?
Mr Gyimah
As the Secretary of State said in her opening speech, as part of announcing this rate we will be introducing an early years national funding formula, which will seek to ensure that the early years funding is allocated on the basis of need, rather than historical circumstances. Some local authorities get quite a lot of money whereas others get less. We will be looking to make sure that all local authorities are treated fairly.
Emily Thornberry
Again, that sounds great, but it does not make any sense. Does it mean that my local authority will get a cut in its rate or not? If the hon. Gentleman knows, he may intervene on me again, because this is important. As I say, if Islington is going to get a cut in its rate to £4.35 per hour for it to provide places for nursery school children—three and four-year-olds—when the average price in Islington is £9.40 an hour, this is extremely bad news for Islington.
Mr Gyimah
The hon. Lady is throwing out lots of numbers, but nobody has mentioned the £4.35 she has just thrown out there. To answer her question, we have said that we will consult local authorities in order to design the early years national funding formula. Part of that consultation will be about recognising how authorities such as Islington are funded and making the appropriate decisions then. She can contribute to that consultation, as can every other local authority in the country.
Emily Thornberry
I would be interested to know whether the Minister regrets producing the document entitled “Cost of delivering the early education entitlement” halfway through the debate rather than earlier, if it was produced some time ago. He knows that one problem throughout the passage of the Bill in the Lords was that people criticised the fact that it was a cut-and-paste job from the Tory party manifesto put in a four-page Bill and that it has had no detail. The reason the Government have been getting into trouble is that everyone has been saying, “Where is the detail? Where is the plan? How much money are we getting?” And when the Bill finally reaches this place, keen people like me get a copy of half of this document halfway through the debate.
Emily Thornberry
The point is—[Interruption.] I am just pointing out that the Blue Book refers to
“a minimum weekly income level per parent equivalent to 16 hours (worked at the national living wage)”.
A parent could be working 16 hours at the national minimum wage, but still not get free childcare. That is as I understand it, but we are not in Government. We are involved in scrutiny.
Mr Gyimah
The eligibility will be checked by HMRC, and it will be based on the actual income earned, so at 16 hours on the national living wage, someone would have to earn £107 a week in order to qualify for 30 hours of free childcare. In addition to the 30 hours of free childcare, that person may get other support such as the childcare element of tax credits or tax-free childcare. This is an incredibly generous offer, but that is not what the hon. Lady is suggesting.
Emily Thornberry
Is the Minister therefore saying that people do not need to be earning a minimum weekly income at the national living wage, because tax credits would make it up? Or is he saying that people have to get an income equivalent to 16 hours worked at the national living wage, and then they will get tax credits and the 30 hours? These are important questions. This Bill has already been in the Lords. We are now in the Commons. It is important for us to understand the Bill.
We are not against childcare, as some have suggested. We are absolutely in favour of childcare, but we would like it to be funded properly so that people get proper access to it, and that includes my single mothers from the Market estate who may be working only a few hours at the moment, but who would like to have additional childcare available to them so that they can look for other jobs, because if Asda will not increase their hours, they will try to find a job somewhere else. They need childcare if they have three and four-year-olds so that they have some time to fill in their CVs, and go to Jobcentre Plus to get the assistance they need to work further hours. I hope that the Minister understands that.
Mr Gyimah
The answer to the hon. Lady’s question is simple: a lone parent would have to earn £107 a week to qualify for 30 hours of childcare. Eligibility is judged not on hours but on someone’s earnings, because HMRC can monitor earnings, not the hours that people work. If someone earns £107 in half a day that gets them 30 hours of childcare, and if someone earns that in a week they still receive those 30 hours of childcare.
Emily Thornberry
Therefore, someone who works 16 hours on the national minimum wage will not get 30 hours of childcare a week. That is an important point, and I am grateful to the Minister for clarifying it. That message needs to go out if we are talking about fairness. No wonder the end of paragraph 2.61 of the Blue Book states that this measure
“will save £215 million by 2020.”
If we are talking about fairness, opportunity, and ensuring that women are able to go to work, I am concerned about the changes being made.
Emily Thornberry
I am grateful to the Minister for making that clearer. Over the next few days I am sure that many more questions will be asked and many more answers given, and we will get a better understanding of exactly what the country is being offered.
On Second Reading in the other place, the Bill was repeatedly described as a “skeleton” piece of legislation—well, absolutely. Lord Touhig went a step further and called it a “missing Bill”. Their criticisms were well summarised by the Delegated Powers and Regulatory Reform Committee, which in a scathing report observed:
“While the Bill may contain a legislative framework, it contains virtually nothing of substance beyond the vague ‘mission statement’ in clause 1”.
As I was saying, it is a cut and paste job from the Tory party manifesto. The job of the Lords is to scrutinise legislation, as is our job in this Chamber. How can we do that if we do not get a plan or a proper understanding of what the funding will be?
I come to this issue blinking into the light after the Welfare Reform and Work Bill Committee. I became concerned about this issue because, as I am sure the Minister knows, mothers with three and four-year-olds will be forced to look for work on the understanding that adequate childcare will be available for them. Given what the Minister has just said, 15 hours of childcare may be available to them whether they work or not when their children are three and four, but they will need to work additional hours, or earn the amount that the Minister indicated, to receive the full 30 hours.
We are talking about getting women with three and four-year-olds into work, and the other problem that struck me is the obvious point that this is just about term-time working. We are asking the question that single mothers and parents ask all the time: what are people going to do in the summer? For 38 weeks people may get 30 hours’ childcare, but how do they cover the summer period if they are doing low-level work and do not earn a great deal? If they do not accept a job, they could be sanctioned or receive a penalty because they will not be working properly.
In the Welfare Reform and Work Committee we tabled an amendment to say that women should not be forced to look for work when they have three and four-year-olds unless adequate childcare is available. As I explained, if the Government are so confident that adequate childcare will be available for working women, surely they would not vote against that amendment, but they did. That is what has brought me to be so concerned about this Bill, which impacts on the lives of women in whatever department. I am a shadow Work and Pensions Minister, and if the Minister is able to introduce a proper Bill that will support women and their children and help women get into work, that will have an impact across the piece, as I am sure he appreciates.
The House of Lords has said that the Bill contains virtually nothing of substance beyond the vague mission statement in clause 1. In other words, the Bill has almost nothing more to say than the Conservative party manifesto. Clearly, the Government like the idea of doubling working parents’ free childcare entitlement; they just have not worked out exactly how to do it. They might as well have written a Bill saying that the land would flow with milk and honey—we would all agree with that.
Perhaps inevitably, the most glaring admission involves the cost of the free childcare extension, about which we have heard a little today. That seems to raise more questions than it answers. If the level of payment is such as to be less than half the amount that childcare costs in my constituency, there are obvious questions in relation to that. As everyone speaking in this debate is likely to know, childcare does not come cheap, and it rarely, if ever, comes free. Costs have been rising dramatically in the past five years to the point where families in England pay more for childcare than in any other country in Europe apart from Switzerland.
The average cost of part-time childcare for two children under primary school age now exceeds the cost of the average mortgage. Given the spiralling housing costs that this Government have presided over, that is quite an achievement. In my constituency, the cost of a part-time nursery placement of 25 hours a week has risen by 183% since 2010. At an average of £235 a week, childcare costs in Islington are the highest of any local authority in England apart from Kensington and Chelsea. Imagine if someone has two children—how are they going to be able to work? While existing support for childcare costs may be a helpful contribution, it has not solved the problem of a large number of working parents.
The Government say that the Bill doubles for working parents the free 15 hours already available to all parents of three and four-year-olds, but there is no such thing as a free lunch, and, in many ways, no such thing as free childcare. As is well known, the free 15 hours are chronically underfunded as it is. There is no legal obligation on any childcare provider to provide them to any parent, and according to a survey by Citizens Advice, a quarter of them do not. The Minister should be concerned about this. We are concerned about it, and working mothers are concerned about it. Those that do provide it will find themselves faced with a conundrum. The significant shortfall between providers’ reimbursement rate and their actual costs means that somehow a way has to be found to square the circle. The options are limited, and none of them is good. Either the cost of the extra hours will rise, new charges will be added for hidden costs such as activities, pencils, books or whatever, or the supposedly free hours will come with so many strings attached as to prohibit most parents from being able to use them.
It is not at all uncommon for parents to be told that they can access their 15 hours free entitlement but only if they pay more for additional hours on top. For working parents with up to 50 hours’ childcare a week, taking into account the early drop-off and late pick-up, the 15 hours may be free but then there is the additional charge for the 35 hours that are supposed to be provided at much higher levels. With fees at the level that they are in my constituency, this means that even with the free hours, families face annual childcare costs in excess of £20,000 a year—and that is for one child. Let me tell Ministers that not many single parents on the Market estate in Islington have that kind of money lying around. The idea of doubling the entitlement to free childcare without addressing the underlying funding gap is simply out of touch with the reality of the lives of people whom I represent, and we all represent.
The IPPR, in a report published last month that has already been quoted, but which I will quote again, described the Government’s estimate of the costs of free childcare extension as
“inexplicably low compared to other estimates, as well as to current funding.”
It concluded:
“The Government’s drastic underfunding gives rise to concerns that the hourly rates that it will give to providers to deliver this care will be too low, resulting in falling quality, poorer outcomes for children and less choice for parents as the market shrinks.”
As recently as this summer, when the Bill was introduced in the other place, the Government were maintaining the ludicrous fiction that the extension could cost no more than £365 million. It is right for Labour Members to say clearly that that is not right. To a certain extent, I am pleased that we have had a little bit of an answer today with the extra £300, but frankly it is still not enough, and the Minister knows it. He, as I understand it, endorsed what the original childcare Minister, the hon. Member for East Surrey, said when the Government were costing the amount, and we were saying what we wanted to do—[Interruption.] I am so sorry—I did not realise that the Minister is the hon. Member for East Surrey. I do apologise. He will remember saying that Labour’s pledge to extend free childcare for three and four-year-olds to 25 hours would cost £1.6 billon. I am so sorry that I did not realise that it was he who said that, but I am sure he remembers saying it. He is not providing £1.6 billion for 30 hours’ childcare for three and four-year-olds, so how can it work, particularly when the costs of childcare continue to go up? Childcare is so expensive in areas such as mine. I accept that my constituency has a large number of single parents who are not working and who find it extremely difficult to find work, but one of the major reasons for that is the cost of childcare.
I want to support this Bill. I want it to help the single mothers on the Market estate, but I just do not believe it will. I will vote for it—I am not going to vote against it—but it is not as though my criticisms have not already been raised in the House of Lords. They were raised in another place at great length and by people who are much more articulate and much better informed than I am. Indeed, concerns continue to be raised, but what happened today? Halfway through the debate, we got the report. I have only half of it and my copy is still warm because it had to be printed off a computer, so I apologise that I have not had a chance to scrutinise it in depth.
When this Bill came here from the other place, the major criticism of it was that the funding was inadequate and that there was no adequate explanation of how it would be viable. To produce a document that we have to print off a computer in the middle of a debate is not democracy; it does not give us an opportunity to scrutinise what the Government do. The Government should not behave with the arrogance of a Government who have a majority of 120. Their majority is 12, and Bills such as this should have complete cross-party support. We should all be able to work together and not go away with a feeling that the Government are playing games, but I fear that that is what they are doing. It was not necessary to produce the report halfway through the Second Reading debate.
Emily Thornberry
I assure the hon. Gentleman that it was produced halfway through. We sent people to the Library to look for it. It eventually appeared on the internet and attempts have been made to print it out. The process should not be some sort of marathon. If the report had been produced yesterday, we would all have sat down and read it overnight. I am sure my hon. Friend the Member for Manchester Central (Lucy Powell) would have read all of it, even if I had not. We would then have had an opportunity to scrutinise the Bill properly. Given that the criticism throughout has been of inadequate funding and a lack of clarity on that funding, the situation is disappointing, to say the very least.
I think I have made my point. I am not an expert on the subject, but I am concerned about the inadequate amount of childcare that will be produced on time, before single mothers of three and four-year-olds are forced to look for work. I am very concerned that there will not be sufficient childcare, that it will be available only during term time, that it will not be sufficiently flexible and that it is not sufficiently funded. I am particularly concerned about the process we have indulged in on the Bill. It has already been discussed in the other place, but the details we have been given are still inadequate. I am very disappointed.