Free Childcare: Costs and Benefits — [Geraint Davies in the Chair]

Part of the debate – in Westminster Hall at 9:30 am on 19th February 2019.

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Photo of Darren Jones Darren Jones Labour, Bristol North West 9:30 am, 19th February 2019

I declare an interest because there are two islands within my constituency—Steel Holm and Flat Holm. One of them officially belongs to Wales, so I class myself as a Bristolian and a Welsh MP. I take great pride in joining my hon. Friend in recognising the achievements of the Labour Government in Wales and I long for such achievements in Westminster too.

One issue with the Sure Start centres was that some data suggested that they were being utilised most by more middle class families, although the policy intention was to tackle the inequality gap that I have referred to. My argument is that a fully funded childcare system, because it is considered a public service, is not seen as a nanny state or someone trying to intervene to tell people how to parent; it is just available and it is what it is. We could have a more mainstream application of early years intervention in this type of system, which would tackle some of the challenges of the past.

I return to my soapbox on maintained nursery schools, which I and my hon. Friend Thangam Debbonaire, and other hon. Members, have talked about frequently. We have some excellent maintained nursery schools in Bristol, which have the costs of and are regulated as schools, but which are funded as private childcare providers. Some of the Minister’s colleagues have recently responded about them in the House of Commons.

The evidence from maintained nursery schools clearly shows that putting in the intervention and assistance before mainstream school has a huge impact on bringing those children up to the average when they get to mainstream education, which helps to tackle the inequality gap. We should take that evidence seriously and apply it to our public policy, to show that it could be done not just in cities and regions that still have maintained nursery schools—they do not exist everywhere in the country—but across all the regions and nations.

On happier families, the Resolution Foundation produced an interesting report last week that looked at wellbeing markers for the happiness of families. To no one’s surprise, it concluded that being in meaningful work and having more disposable income generally makes people happier. It specifically showed that an extra £1,000 a year of disposable income can have a measurable impact on the wellbeing and happiness of someone’s family life, especially for those on the lowest incomes. To perhaps no one’s surprise, as income gets towards £100,000 a year, extra disposable income has less of an impact, but it can have an enormous impact for someone on £13,000.

Helping parents to be in work and providing fully funded childcare could have an impact on the average cost of £10,000 a year for working families. One of the consequences of reading a speech from an iPad, Mr Davies, is that pressing the wrong place on the screen returns the speech to the start, rather than staying where I was speaking from. Reducing the amount of disposable income that working families spend on childcare, especially those on the lowest incomes, would have a measurable impact on their wellbeing and happiness. In many situations, parents are having to trade off between each other’s jobs, after-work arrangements, work trips, having to look after children, who does the school run and all those things. We could make a difference not only to family life planning, but to their income.

I do not have any evidence for this, and I would be interested in the Minister’s view, but surely fully funded childcare is an investment in the country. If we allow parents to work, reduce the amount of disposable income they spend on childcare, give them more money to spend on the high street or elsewhere in the market, allow them to pay taxes and VAT on the products they buy and fund properly paid childcare providers which then pay their own income tax through their workers in a fully funded childcare system, that money will not just go into a black hole, but will create a system that could help us achieve public policy priorities on gender, class, economic productivity and all the issues I have raised today. It seems an obvious thing for the Government to want to look at and reform, because it will mean something to so many people across the country, while also stimulating all those important factors.

In conclusion, it is clear that the current childcare system is too complicated, does not work and is not sustainable. When we speak to anyone involved, that is what they say. Parents are not aware which system is most relevant to them. It is very confusing. People might think they are on a better scheme with childcare vouchers, which are easily done through work, and they are being told that is coming to an end and they should consider tax-free childcare, but then the IT system does not work and they cannot calculate which scheme is better. If someone is about to be or has already been pushed on to universal credit, they are told they cannot get tax-free childcare, even though they may have been able to get childcare vouchers if they were on working tax credits. It just does not work.

As a consequence, the Treasury has been saving money. The budget allocation for tax-free childcare alone—that is just one aspect of this complicated service—went from £800 million to £37 million. The Treasury has made a saving of hundreds of millions of pounds. Where has that money gone? Why is it not being invested back into reforming childcare systems? The fact of the matter is that while the Treasury is clawing back this money and spending it on God knows what—ship companies with no ships, or whatever it might be—childcare providers are having to charge parents on top of the already expensive price of childcare, whether it is for food, activities or private hours outside of the hours provided by the system.

We see that time and again. Whether it is policing, council services or childcare, the Government cut the funding to public services and those who provide for our constituents, and then push those costs on to hard-pressed families, whether it is through increased council tax to pay for the police funding that the Government have cut or to cover their cuts to the core grants to councils, or passing on more costs to parents from the attempt to save money on childcare systems. Enough really is enough.

We should be aiming for a fully funded childcare system, with qualified and decently paid childcare professionals. It is an investment in our future. It will break down gender and class inequalities and will help foster happier and healthier families right across our country. I do not see why it is even a debate. I hope that the Minister will set out today what he will do to make it a reality.