Childcare Payments Bill

Sarah Newton Excerpts

Monday 14th July 2014 Commons Chamber

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[Priti Patel]

I welcome my hon. Friend’s intervention. He makes a powerful point. When we consider child care and child care payments, it is important to understand that this one size does not fit all—we all have different child care needs. All our children are different; every family is different. The Bill moves us away from the notion that everybody’s situation is similar. We must support families through all sorts of personal circumstances, some of which are challenging and very difficult. We know that both as constituency MPs and as parents.

One of the biggest challenges and choices that parents face is how to raise their children, so the Bill is not only timely but politically significant—we have not had such a measure before. We live in a society in which the pressures on parents are absolutely enormous, whether because of employment, changing jobs, the labour market, social mobility or the fact that we live in an international and global world. Many companies have different expectations of their employees, but employees are parents, too.

[Sarah Newton]

Does my hon. Friend agree that caring for older relatives is another huge pressure on families? It is so important that the benefits of this Bill will be available to those on carer’s allowance. So many people fall out of work because it is too difficult to work while managing caring responsibilities.

[Priti Patel]

My hon. Friend makes a powerful point, which relates to my earlier comments on everybody’s circumstances being different and the flexibilities outlined in the Bill. The ability to reach out to those with different circumstances and backgrounds is paramount. The Bill demonstrates a depth of understanding of the challenges facing families and households. When both parents work, they find it difficult to decide between the costs of child care, which can be in excess of £10,000 a year, and spending time raising children themselves.

We should remember that child care costs vary across the country and that no generic or standardised level or rate exists. Costs are naturally high in London, the south-east and the east. Many working households spend a lot of their income on child care, partly because people do not necessarily live in the conventional family set-ups in which grandparents might be around the corner and able to offer support. I must be perfectly honest that I rely on such a situation. I tell everybody that I am blessed and that I can do this job only because I have outstanding family support to look after my son.

Child care decisions are often made on cost grounds and the Bill goes a long way to reflect that. Over the past decade, the average hourly cost of child care has increased by more than 67%, which is almost two and half times higher than the CPI rate over the same period. The pay of parents in England will vary depending on what they do. In London, pay levels are slightly higher than elsewhere, but many parents pay hundreds of pounds a week to some child care providers, which means that their families are under pressure and more often than not—we have not discussed this—that pressure ends up on working mothers. They are the ones who sacrifice their careers or put them on hold because child care costs can be so high that they have to decide whether going out to work or staying at home to look after their children is more financially expedient. I have much sympathy with those mothers. Many of my constituents with successful professional careers that they want to continue inform me of the pressures and challenges that they face, including the high costs of child care and commuting costs. Essex is not that far from central London, but most of my constituents and others across the county work in London. They are on a treadmill day in, day out. They face pressures and costs and feel as if they have no choice. If people feel that they have to stay at home, it becomes harder for them to re-enter the work force, which is another reason the Bill is so important. It helps mothers in particular to meet their aspirations, which we should all welcome and support.

The Government deserve credit for recognising the pressures, in addition to soaring child care costs, that families and mothers face and the impact of those pressures on families. As with so many other issues, the Labour party ignored that when it was in government. We have heard lots of rhetoric today, but the reality is that it is difficult, a challenge and a balance. It is easy for the Opposition to talk about the Government today, but we have to remember that the economic policies of the past—uncontrolled public spending—hampered the economy instead of helping families. When families needed help, they were hurt. We know about the negative impact that the downturn and its economic legacy has had on households, so now is the right time to focus on support for hard-working families. The Bill is about support for child care costs, but we want to put an end to the shameful past and what parents had to deal with, and to look forward.

As we heard from the Financial Secretary to the Treasury, the Government have gone a long way to bring in positive and proactive measures to help hard-working households: cutting income tax bills, abolishing Labour’s jobs tax; reducing fuel duty; and supporting private business. That applies particularly to my constituency, where SMEs employ 85% of my constituents. We need the private sector and SMEs to be successful to continue to create more jobs. A million new jobs have been created since 2010. The measures are positive and bring a new dynamic to the employment market. At the same time, low earners have been given support with child care costs, including free child care places for some 40% of two-year-olds. Those are the proactive measures that make a difference to middle and low-income families.

As a Conservative, I instinctively believe that the Government should not only support families, but also help parents to make choices about working arrangements, which is why the Bill is so positive and proactive. Families want to be empowered by Governments to make the right choices for themselves. The Bill helps families to make such choices by alleviating some of the financial pressures caused by child care costs. This package of support will help women who want to continue to work to do so. We are already seeing record numbers of women in work and the Bill will help those who have established a career—or those who are just starting out after having taken time off to bring up their children—to continue to develop and to advance in their profession.

The £2,000 a year of support for families is a substantial amount for the Chancellor to find and should be put in the right context. It has been made possible only because of the controls that have been placed on spending and the reductions in the deficit, which the Labour party has opposed. This Government is on the side of hard-working families. The Bill will benefit not only my constituents but working families across the country through sensible and practical measures. I welcome it as a positive way of supporting families and working women.