New Clause 2 — Attainment and development of children

Childcare Bill [Lords] Bill – in the House of Commons at 6:00 pm on 25th January 2016.

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“(1) In discharging the duty under section 1(1), the Secretary of State must have regard to narrowing the attainment and development gap between young children—

(a) of different genders;

(b) of different ethnic backgrounds;

(c) of different socio-economic backgrounds;

(d) living in different regions; and

(e) who do and do not have a disability.

(2) Within 12 months of the passing of this Act the Secretary of State must lay before both Houses of Parliament a report containing an evaluation of the impact of discharging the duty under section 1(1) on narrowing the attainment and development gap between young children—

(a) of different genders;

(b) of different socio-economic backgrounds;

(c) of different ethnic backgrounds;

(d) living in different regions; and

(e) who do and do not have a disability.”—(Jenny Chapman.)

This new clause would require the Secretary of State, in discharging her duty under this Act, to have regard to the attainment and development gap between different groups of children. The Secretary of State would also have to publish a report on the impact of discharging her duty on such gaps.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

The House divided:

Ayes 185, Noes 265.

Division number 174

See full list of votes (From The Public Whip)

Aye

No

Question accordingly negatived.

Photo of John Bercow John Bercow Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Speaker of the House of Commons

Consideration completed. I will now suspend the House for about five minutes in order to make a decision about certification. The Division bells will be rung two minutes before the House resumes. Following my certification, the Government will be tabling the appropriate consent motion, copies of which will be available shortly in the Vote Office and will be distributed by Doorkeepers.

Sitting suspended.

On resuming—

Photo of John Bercow John Bercow Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Speaker of the House of Commons

I can now inform the House of my decision about certification. For the purposes of Standing Order No. 83L(2), I have certified that clauses 3 and 5 of the Bill relate exclusively to England on matters within devolved legislative competence, as defined in Standing Order No. 83J. For the purposes of Standing Order No. 83L(4), I have certified that amendment 3 to clause 2 made to the Bill in Committee, which is now Clause 1(5) in the Bill as amended, relates to England. Copies of my certificate are available in the Vote Office. Under Standing Order No. 83M, a consent motion is therefore required for the Bill to proceed. Does the Minister intend to move the consent motion?

[Mr Lindsay Hoyle in the Chair]

Photo of Lindsay Hoyle Lindsay Hoyle Chair, Panel of Chairs, Deputy Speaker and Chairman of Ways and Means, Chair, Panel of Chairs, Chairman of Ways and Means 6:34 pm, 25th January 2016

I remind the House that although all Members may speak in the debate, only Members representing constituencies in England may vote on the consent motion.

Resolved,

That the Committee consents to the following certified clauses of the Childcare Bill [Lords] and certified amendment made to the Bill:

Clauses certified under Standing Order No. 83L(2) as relating exclusively to England and being within devolved legislative competence

Clauses 3 and 5 of the Bill as amended in Committee (Bill 107);

Amendments certified under Standing Order No. 83L(4) as relating exclusively to England

Amendment 3 made in Committee to Clause 2 of the Bill as introduced (Bill 84), which is Clause 1(5) of the Bill as amended in Committee (Bill 107).—(Mr Gyimah.)

The occupant of the Chair left the Chair to report the decision of the Committee (Standing Order No. 83M(6)).

The Deputy Speaker resumed the Chair; decision reported.

Third Reading

Photo of Nicky Morgan Nicky Morgan Minister for Women and Equalities, The Secretary of State for Education 6:36 pm, 25th January 2016

I beg to move, That the Bill be now read the Third time.

The Bill clearly demonstrates the Government’s commitment to supporting working families. We recognise the barriers that the cost of childcare can pose to parents who want to work, and the Bill seeks to tackle them. By offering working parents an unprecedented

30 hours of free childcare, the Bill will give mothers and fathers across the country real choice about how they balance raising their children with their working life. For too long, childcare costs often outweighed the gains of returning to work or working more hours. Policy Exchange’s “Time to Care” report, published today, argues that the Bill could be transformational in the lives of working families.

I thank the Opposition for their engagement on the Bill and for supporting the Government to implement our manifesto commitment. I and the Under-Secretary of State for Education, my hon. Friend Mr Gyimah, who has responsibility for childcare, found the debate on Report both helpful and interesting. I understand the intention behind the amendments discussed this afternoon, and although I share the sentiments, I hope hon. Members were reassured that my Department and others will be managing these issues through other legislation such as the Equality Act 2010 and the Children and Families Act 2014, as well as through other practice and policy.

Photo of Sylvia Hermon Sylvia Hermon Independent, North Down

I appreciate the Secretary of State’s allowing me to intervene on her. I am curious. The consent motion has just been passed to say that this is an exclusively English measure, but I would like the Secretary of State to take a moment to explain what is in the Government’s mind in clause 1(8), which states:

The Secretary of State may by regulations make provision about the circumstances in which a child is, or is not, in England for the purposes of this section.”

If the child were in Northern Ireland and this Bill applies to them, surely it is not exclusively English.

Photo of Nicky Morgan Nicky Morgan Minister for Women and Equalities, The Secretary of State for Education

I thank the hon. Lady very much indeed. I think that that is a matter for the authorities. I will happily write to her, but Mr Speaker has certified that the Bill applies to England. My understanding is that it is not a devolved matter, but I am very happy to write to her to provide any clarity she might require.

After Opposition Lords’ attempts to delay the Bill—

Photo of Nicky Morgan Nicky Morgan Minister for Women and Equalities, The Secretary of State for Education

I will give way briefly but I want to make progress on the substance of the Bill.

Photo of Sylvia Hermon Sylvia Hermon Independent, North Down

With the greatest respect, this is a matter of substance in this Bill. I emphasise that I do not wish in any way to challenge the certification by Mr Speaker. He certified clauses 3 and 5 of the Bill as exclusively English. This is a question about clause 1 and a child being in England.

Photo of Nicky Morgan Nicky Morgan Minister for Women and Equalities, The Secretary of State for Education

My understanding is that clauses 1 to 5 relate to England only. I am happy to write to the hon. Lady and clarify the point, but this is a matter that Mr Speaker has certified as applying to England.

After attempts to delay the Bill, I am glad that the Labour party has recognised the demands of parents who want to see it become law and to have the opportunity to access the 30 hours entitlement without delay. I am pleased that amendments to clause 1 which could have set back the implementation of the free entitlement by months have now been removed.

Lucy Powell is on the record as saying that she wants to see our childcare policies become a reality. I hope that she is pleased to see the progress made with the Bill and its speedy implementation, which is due to benefit 390,000 three and four-year-olds.

The importance and impact of quality early education and childcare are beyond dispute, which is why my party has put it at the heart of our agenda for government over the past five years. In that time we have introduced the two-year-old offer, supporting more than 157,000 two-year-olds from disadvantaged backgrounds to access 15 hours a week of quality early education. We have extended the universal three and four-year-old entitlement from 12 hours to 15 hours, with 96% of three and four-year-olds now taking up a place. We have introduced the early years pupil premium to target additional resources at children from disadvantaged backgrounds. We have legislated for tax-free childcare, under which up to 2 million working families can benefit by up to £2,000 per child, per year. We have also increased the direct support for childcare costs under universal credit from 70% to 85% from April this year.

Now we are going even further by doubling the 15 hours entitlement for working parents, which represents a substantial commitment to childcare by the Government. That commitment is backed up by the investment and funding it requires. As the Chancellor announced in the autumn statement, and, as I confirmed straight afterwards on Second Reading, by 2019-20 we will be investing over £1 billion more per year to fund the free entitlements. That includes £300 million for a significant increase in the hourly rate paid to providers, delivering on the commitment the Prime Minister made during the general election campaign.

Those funding levels were directly informed by the review of the costs of providing childcare published on 25 November last year. I am sure that the House will agree that this is a significant piece of research and a sound evidence base on which to ensure that the childcare market is properly funded.

It is worth reiterating to the House that we have been able to make this extra investment only because of the difficult decisions we have taken elsewhere in government as part of our long-term economic plan, a further reminder that we can only have strong public services if we have the strong economy to support them—[Interruption.]I shall say it again, shall I? Perhaps it will get a bigger cheer this time. I thank the Opposition Front Bench for inviting me to make the point about our long-term economic plan again—[Hon. Members: “Hear, hear.”]

The next stage of our funding reforms will be to ensure that funding is being allocated fairly across the country and that as much as possible is reaching childcare providers on the frontline.

Photo of Graham Stuart Graham Stuart Conservative, Beverley and Holderness

Does my right hon. Friend agree that one of the greatest achievements of the last five years has been the reduction in the number of workless households? Research shows the scarring, long-term negative effect that research they have on children. This is another step to build on the already strong foundations we have put in place to make sure that fewer children are brought up in workless households, with all the negative results that follow.

Photo of Nicky Morgan Nicky Morgan Minister for Women and Equalities, The Secretary of State for Education

I thank my hon. Friend, who is a former Chairman of the Education Committee, and he is absolutely right. At least 300,000 fewer children are living in workless households this year than in 2010. I had a conversation in my constituency on Friday with the local co-ordinator for those at risk of being excluded from school, and he said how much of an impact seeing a parent or parents getting up and going out to work has on children, their work ethic and their ability to think about their work and career choices in the future.

We will consult on the proposals on the early years funding formula in due course. We are lucky to have in this country a thriving childcare market that is well placed to begin delivering the 30 hours entitlement. The market showed with the introduction of the two-year-old offer that it can respond quickly and effectively to deliver increased places and meet parental demand. That is why we have felt able to bring forward by a year the introduction of the extended entitlement for early testing in a series of areas. However we are not complacent about ensuring that sufficient places are available and are taking further steps to build capacity. That includes creating nursery provision as part of new free schools, and an additional £50 million of capital funding to support the creation of early years places for the free entitlement. We are confident that the capital investment, combined with an attractive, increased rate to providers, will also enable them to seek further investment to expand their offer.

We are committed to ensuring that the free entitlements are flexible and can be accessed in a way that fits with parents’ working patterns. The early implementation areas will look at ways to encourage different and diverse types of providers to enter the market and will incentivise innovative approaches to providing flexibility in terms of the type and timing of childcare on offer. Alongside that, we are consulting on a new right to request for parents. That right will allow parents to request that their children’s school makes their premises available for providers to offer childcare. That will not only ensure that parents who already have children of school age do not have to move their children between different places, but will also lead to an increase in the number of childcare places on offer.

Throughout the passage of the Bill through the House and the other place, there have rightly been lengthy discussions about the issues that matter most to parents—flexibility, quality and access for children with special educational needs and disabilities. I am clear that the Bill and the subsequent roll-out of the extended entitlement will be better because of that scrutiny. Parliament’s scrutiny will not end with the Bill: as agreed in Committee, regulations made to support the 30 hours free entitlement will be debated and approved by both Houses on their first use, ahead of early implementation later this year. Ahead of bringing the regulations back to Parliament, my Department will run a full consultation on the regulations and statutory guidance for local authorities. I look forward to engaging with providers, local authorities and parents over this period so that we can be certain we are getting it right and ensure that parents get what they need from this offer.

Before I conclude, let me thank all hon. Members who served on the Bill Committee and all those who provided written evidence. I would also like to take this opportunity to thank the Under-Secretary of State for Education, my hon. Friend Mr Gyimah, for steering the Bill through the House and his work on the childcare task force to prepare for implementation. I also thank officials in my Department and here in the House for their support.

As I said earlier, the Bill starts with one goal—to help working families with the cost of childcare. I hope that the Bill will now make further progress quickly so that early implementation of 30 hours free childcare can begin and parents across the country can start realising the benefits that this significant offer provides.

Photo of Lucy Powell Lucy Powell Shadow Secretary of State for Education 6:47 pm, 25th January 2016

I rise to support the Bill on Third Reading.

I welcome my hon. Friend Jenny Chapman to her new role as our early years spokesperson. She is a passionate campaigner for social mobility, and she has done a brilliant job today on Report, raising several important issues. Of course, I also pay tribute to my hon. Friend’s predecessor, my hon. Friend Pat Glass. She did a fantastic job on the Bill in Committee and she will be missed by our team, but she goes on to fight a great cause for this country.

Opposition Members have long campaigned for and supported more investment in childcare. Childcare is an investment in our economic success. More childcare means more opportunities for families and it may begin to reduce the growing gender pay gap. Better childcare can also do a great deal to give all children a better start in life. Far too many women are still priced out of work by the high cost of childcare, particularly those on low and middle incomes. Childcare can help women into work and enable them to work more hours. That is why in government Labour introduced the original 12.5 hours free childcare for all three and four-year-olds. We created the Sure Start centres, massively extended maternity leave, introduced paternity leave and developed the first, and only, 10-year childcare strategy.

Our introduction of free early years education was designed to help to support child development and enable children with disadvantages to attend a high-quality early years setting in an attempt to close the school-readiness gap that is so present by the age of five.

Aside from our specific concerns about the deliverability of the scheme, which I will come on to, there is a larger problem with the Government’s approach to childcare: the widening attainment gap between children on free school meals and their peers. The Government seem focused only on the maternal employment needs of childcare—important as they are—while having no vision or action plan for narrowing that gap. My hon. Friend the Member for Darlington made a powerful case, based on the recommendations of the Social Mobility and Child Poverty Commission, for a comprehensive and joined-up approach to early years to address this issue.

It is the job of the Opposition to scrutinise the Government’s plans and try to make them better, but the Government have not really listened to many of the points we raised in both Houses. I will give it one last go and set out the measures by which we will judge the success or otherwise of the scheme. The detail of the policy and the Government’s legislative approach have not been the best. Ministers have failed to give us, parents or the House confidence that their plan to extend free hours is deliverable, affordable and sustainable. Even now, so many months since it was announced, we are none the wiser on how the extra hours and the necessary expansion of places will be found, funded and facilitated.

A key concern about the policy is whether it is adequately funded. There are three key funding issues: whether the overall budget is sufficient; whether the new hourly rate is sustainable; and the scaling back of the eligibility criteria. Before the general election, the Early Years Minister said that Labour’s plans to extend free childcare from the current 15 hours to 25 hours would cost an additional £1.5 billion, yet the pledge of 30 hours in the Conservative party manifesto was costed at just £350 million. That was then revised to £650 million, once Ministers returned to the Department. That still leaves a massive funding shortfall, which the Institute for Public Policy Research identified as £1 billion. This gives a whole new meaning to back-of-the-fag-packet policy making and I hope Ministers will be able to provide us with some reassurance on that. An extra £300 million was allocated in the autumn statement to increase by 30 pence the hourly rate paid to providers, less than half of which will go on the new offer. I welcome that, yet even with that review, independent analysis for the Pre-School Learning Alliance shows there is still a £450 million shortfall, over the course of this Parliament, for providers in meeting this offer. I will say more on the consequences of that in a moment.

It seems to me that the Government made all those figures add up by slashing eligibility. We now know that one in three families who were promised more childcare at the election will not get it. Ministers had said that all families in work would gain an extra 15 hours of childcare if they had three and four-year-olds. Their original press release said that this would mean 630,000 three and four-year-olds. That figure has now been slashed to 390,000. Of course, parents earning over £100,000 a year do not need extra help with childcare and we agree it is right to reduce eligibility at the top end. However, the Government have now taken their offer away from many low-paid families at the bottom end of pay scale.

The new offer is intended to support parents returning to work or support them to work more hours. Both parents, or a lone parent, need to work the equivalent of 16 hours a week at the minimum wage to qualify. Those in low-income jobs are more likely to lose out under these eligibility rules. For many parents on the edge of the labour market, short hours, part-time work and zero-hours work are often the first and best route back to work. The Government have cut those parents out and damaged the scheme as a work incentive for them. For example, an investment banker or a lawyer would earn eligibility for the extra hours by working one day a week—or one hour a week, in some cases—whereas someone on the national minimum wage would have to work for 16 hours.

There is an inherent unfairness here. Strivers will be working longer to get free childcare than people higher up the income scale. That is not something that Government

Members should be proud of. The cost of childcare is a big barrier to parents; we know this for a fact. A low-income second earner would have to find an extra eight hours of work to gain from this new benefit. The policy will hit women particularly hard. Gingerbread says that 20,000 lone parents will now lose out.

Another key issue with the Bill is the lack of capacity in the system, and key question marks remain about the sustainability of the scheme. These could lead to a shrinkage in the market and we have not received sufficient reassurance on that. Some 40,000 early years childcare places have disappeared on the Government’s watch. To deliver this offer is not as simple as saying that eligible three and four-year-olds will just stay in the same setting for an additional 15 hours in the afternoon. In many cases, the afternoon sessions are full of children who are eligible for the 15-hour offer only. We have seen the problems Ministers have had in expanding provision for two-year-olds, particularly in schools where space is at a premium. With three and four-year-olds, the problems will be greater. Facilities will need kitchens to serve lunch, and some settings currently providing 15 hours will not be able to expand because they are sessional and taken up by other community groups at other times. This is not just about money, albeit the £50 million is welcome; it is about logistics and practicalities.

There are issues, too, in the private and voluntary sector. Many say that offering 30 hours to parents would leave their businesses on the brink of collapse. Currently, many providers are only able to offer the 15 hours free childcare by cross-subsidising with full-paying parents. This is why so many providers say that doubling the free offer to 30 hours a week would make their businesses unsustainable. The Government face a big task in convincing parents that providers will actually offer the extra 15 hours without caveats and in real terms. The overall impact of this market intervention without a proper strategy could lead to an exacerbation of trends that we have already seen over this Parliament and the last—a reduction in childcare places and an increase in cost to parents. For parents not in receipt of free hours, the mix of complicated cross-subsidy and price inflation will mean that the cost of childcare could rocket further. What plan do Ministers have to ensure that that does not happen? We still need reassurance on that.

As my hon. Friend the Member for Darlington so eloquently said on Report, the Government seem to have no strategy for raising quality in childcare, or for reducing the stark gaps in development that exist by the age of five. Indeed, with the decimation of early intervention, early years support services and the virtual disappearance of Sure Start children’s centres from our communities, and with family support services impossible to access, the Prime Minister’s latest speech, in a long line of speeches, on the importance of family frankly rings hollow.

The Government urgently need to turn their rhetoric into reality. Not only are they not doing enough; it is quite possible, for the reasons outlined this evening, that only focusing on maternal employment drivers could damage the objectives of raising quality and of encouraging disadvantaged families to access high-quality early education. I ask the Secretary of State once again to bring forward a comprehensive long-term strategy for reducing early years inequalities and thereby give a step change to social mobility.

In conclusion, as I have made clear, we support the Bill. We want parents of three and four-year-olds to have an additional 15 hours of free childcare, and for this to be a real offer that helps parents to find and afford childcare, so that they can do well for themselves and their families. I worry, however, that the Government will turn a deaf ear to constructive concerns. I fear Ministers are going in the wrong direction if they continue to ignore the problems this policy could have for the childcare market, and for families if they fail to act. We need a bigger vision for childcare: a system that delivers flexibility, price and stability for parents, while providing the best start for children and closing the developmental gap that already exists in pre-school.

Childcare is too important to get wrong—[Interruption.] Would the Minister like to make an intervention? No, he is just chuntering from a sedentary position. As he admits in private, he is concerned about the developmental gap but he has no strategy to deal with it. Childcare is too important to get wrong, yet the Government’s piecemeal approach endangers the market and the efficacy of the system. We stand willing to work with the Government to secure a winning approach for parents. We will support the Bill in that spirit, and we will keep a watchful eye on delivery as the scheme progresses.

Question put and agreed to.

Bill accordingly read the Third time and passed, with amendments.

Photo of Sylvia Hermon Sylvia Hermon Independent, North Down

On a point of order, Mr Deputy Speaker. I might have misunderstood, but when last autumn we discussed the new certification process for English votes for English laws, it was my understanding that it would be used only rarely. Since the House returned from the Christmas recess, however, we have used it on the Housing and Planning Bill, on a statutory instrument last week and on the Childcare Bill this evening. Have you, or has the Speaker’s Office, had any indication of whether this dreadful procedure will become routine, or will it be used only on rare occasions—all the rare occasions having occurred this month?

Photo of Lindsay Hoyle Lindsay Hoyle Chair, Panel of Chairs, Deputy Speaker and Chairman of Ways and Means, Chair, Panel of Chairs, Chairman of Ways and Means

The trouble is it depends on the Bills. Standing Orders dictate when the procedure is used. We could go a long time without it being used or it could be used every day. I am not sure. The procedures are laid down in Standing Orders, but the hon. Lady has now put her point on the record.

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

Further to that point of order, Mr Deputy Speaker.

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

I am sometimes a bit naughty.

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

The hon. Lady should not get too worried, because EVEL will not change a single part of a single Bill in this or any other Parliament. There is an overall Conservative majority in this one, and, as all the other parties are opposed to it, if we do not have a majority next time, they will cancel it.