Free Childcare

Debate between Catherine McKinnell and Vicky Ford

Monday 9th March 2020 Westminster Hall

[Vicky Ford]

My hon. Friend absolutely hits the nail on the head. I have been in my role for two weeks and one day, and the issue of education, health and care plans has been raised a number of times. SEND review is right at the top of my list of priorities. The plan is meant to cover education, health and care—that was a huge step forward in the 2014 reforms—and it needs to ensure that they are all delivered. I have a meeting scheduled with my counterpart, the Health Minister, but the Health team seems rather busy at the moment. However, it will happen, and we will look at those plans as part of the review.

My hon. Friend also raised the important issues of the school forums, which I will look into, and of tax-free childcare. I was quite disappointed that neither of the two Opposition speakers mentioned tax-free childcare, because it is an important introduction that helps up to 1.3 million families whom we estimate could be benefiting.

[Catherine McKinnell]

Will the Minister give way?

[Vicky Ford]

Let me go through the availability for the record. Tax-free childcare is available for all parents who work more than 16 hours at the national minimum wage or above, and who earn up to £100,000. For every £8 that parents pay into an online account, the Government will pay £2, up to the maximum contribution of £2,000 per year for children aged under 12. Parents with disabled children will receive extra support worth up to £4,000 per child each year until their child is 17. More and more families are benefiting annually from tax-free childcare. I asked to be updated on the latest numbers. The numbers benefiting have more than doubled since this time last year: 205,000 families used tax-free childcare for 243,000 children in December 2019, compared with 91,000 families for 109,000 children in December 2018. I accept the points made about the bureaucracy sometimes, but the scheme is more targeted and fairer.

[Catherine McKinnell]

To correct the record, I did not specifically reference the tax-free childcare scheme; I referenced the Government’s interventions, which very much included the tax-free childcare scheme. The Treasury Committee’s conclusions were that the scheme is not as targeted a use of Government resources as it could be; it results in those already in work benefiting much more than those looking to re-enter the workplace, and that is the subject of the petition.

[Vicky Ford]

I am sure that the hon. Lady will welcome the news that the number of people using the tax-free childcare scheme has more than doubled. The scheme benefits the parents of very young children, which is the entire point of the debate, and it is more targeted and fairer. Unlike vouchers, which were mentioned, it is available to everyone who meets the eligibility criteria, including those earning the minimum wage and the self-employed. Often, vouchers were available only to those employed by larger organisations. This scheme is available per child, whereas childcare vouchers were available per parent. Therefore, parents with younger children, disabled children or multiple children, whom the hon. Lady mentioned and who are likely to have higher childcare costs, will be better off under TFC.

[Catherine McKinnell]

Clearly, any support for childcare is welcome, but the Government’s so-called tax-free childcare scheme benefits most those who are wealthier and earn more. The petition focuses on those on lower incomes who consider themselves to be caught in the middle: people who do not earn enough to get the maximum benefit from that scheme, but who are not eligible for the free element of childcare. It would be helpful if the Government recognised that squeezed middle.

[Vicky Ford]

Let me get on to those who are sometimes on lower incomes. As I hope the hon. Lady is aware, eligible families can now get help with 85% of their childcare costs through universal credit, compared with 70% under the previous tax credit system. That is the highest ever level of support. Furthermore, we committed in our manifesto to creating a £1 billion fund to help with high-quality, affordable, wraparound childcare for the holiday, before-school and after-school periods. We have already started working on the details of that, which will be rolled out from 2021.

I understand that some working families who contribute hugely to our society face additional pressures. I am thinking in particular of people such as nursing students, who work shifts, and armed services families, many of whom move around regularly. That is why the Department of Health and Social Care has already announced that, from September this year, it will increase the parental support allowance for students of nursing, midwifery and allied health professions from £1,000 to £2,000 per year. That is on top of the additional £5,000 that all students on those courses will get access to, whether or not they have children.

The Ministry of Defence is setting up a childcare support team, the aim of which will be to work at fulfilling the manifesto commitment and ensuring free wraparound childcare for four to 11-year-old eligible children from armed services families. That team will also look at other areas of potential disadvantage that service families face when trying to access appropriate childcare, whatever the age of their children.

I am extremely grateful to the hon. Member for Newcastle upon Tyne North for raising this important issue. I listened carefully to the debate and noted all the contributions. I am honoured to be responsible for this extremely important part of the Government’s agenda to support parents and children. I am proud of the significant range of childcare support that the Government offer families, and of the improvements that have been made over the past decade. As Members will know, a spending review is due this year. I cannot make any commitments ahead of that about the shape or amount of the Government’s childcare funding, but I will ensure that the points raised today feed into the Government’s evidence base for that spending review.