Backbench Business committee debate (Commons) on Early Years Childcare - Oct 16

Mr Robin Walker (Worcester) (Con)

I beg to move,

That this House has considered support for childcare and the early years.

I am grateful to the Backbench Business Committee for granting this debate early in this parliamentary sitting period and for allowing the Education Committee to continue its work on this vital area of policy. I am also grateful to my right hon. Friend the Member for Aldridge-Brownhills (Wendy Morton), recognising the pressure on parliamentary time today, for having withdrawn her equally important debate. I hope that she secures another one on that subject.

When I ran to be Chairman of the Education Committee, I proposed an inquiry into early education and childcare, and I was very glad to get the support of a substantial majority across the whole House, as well as from individual members of the Committee in pursuing that. As the parent of a five-year-old and two-year-old, I should perhaps declare a special personal interest in this area, but there is probably no single subject more vital to the future success of our children than their earliest experiences of education, and the stimulation, engagement and support they can receive through high-quality early years education and childcare.

As many others have argued, there is enormous economic benefit from investment in this space. However, the last time I troubled the Backbench Business Committee for time to debate it was in advance of the last Budget, when I was very glad that the Treasury accepted the case for major new financial commitments in this area. I said then that investment in childcare and early education would benefit multiple groups: parents who wish to work; schools to have properly socialised children ready to learn; children who benefit from better stimulation; and those with special educational needs with earlier identification. It is a win to the power of four.

Our inquiry was launched before the very significant expansion in the Government’s childcare offer and their plans for substantially increasing investment in the funded hours. It is important to note, however, that our oral evidence was taken both before and after the detail of the announcements became known. We heard both the relief of the sector at the scale of the commitment being made and also many of its ongoing concerns about the complexity of the many schemes of funding, the overall level of funding going into childcare, particularly for three and four-year-olds, and the many serious and ongoing pressures facing providers.

I am enormously grateful to the many expert witnesses, parents, providers, academics, campaigners, childminders and nursery practitioners who gave evidence to us. Indeed, it is worth noting that this inquiry received more written submissions than any other in the life of my Committee and, in so far as my Clerks recall, any other inquiry in the history of the Education Committee. I put on record my thanks to the Clerks of the Committee and their apprentice, who had to handle an unprecedented quantity of material with calm determination and expertise.

Due to the very important list of other debates that have taken place today, I will not have time to re-present every one of the 21 recommendations that we made in the report on the back of the more than 10,000 pieces of evidence. However, I want to remind the Minister of the pressing nature of the challenge, reflected in the enormous public response to our call for evidence, and I will focus on three key recommendations.

The affordability of childcare is a key concern for parents, and before the Budget it was becoming clear that the sector was facing a crisis of both affordability and availability. I have no doubt that the additional hundreds of millions in funding this year and next will make some difference, and that the roll-out of funded hours for the under-threes over the next few years will make a big difference for working parents, but I urge the Government to consider very carefully recommendations 6, 8 and 11, as well as overarching recommendations 1 and 2 on the need to work across Government to ensure adequate funding. The additional billions that the Government have committed over the long term will succeed only if the sector is properly supported in the short and medium term and if we continue to have strong and thriving early years education across the public, private and voluntary sectors.

I know the Department for Education is not able to make decisions on taxation, but I urge my hon. Friend the Minister to consider very carefully the case for our recommendation on exempting childcare providers from business rates and the payment of VAT on building costs. Not only are these taxes a false economy for the Treasury, as the DFE’s evidence admits these costs have to be taken into account in a setting’s funding rates, but they are a barrier to much-needed expansion to meet the Government’s own ambitions. Worse, many childcare businesses pointed out to the Committee that the size of their premises is a matter not of choice but of meeting regulatory standards required by Government and Ofsted guidelines. They therefore find themselves having to pay more in business rates not as a result of a commercial decision to expand but as a result of wishing to meet the space standards set by public bodies.

I raised nurseries’ pressing concerns about their rapidly increasing business rates bills in a previous debate but, as our unanimous recommendations suggest, fixing this problem and creating a level playing field among providers on rates and VAT should not be used as a cost-saving measure; it should be used to ensure that more resources are available for paying, upskilling and retaining expert staff. In support of this recommendation, written evidence from the National Education Union said:
“Business rates for nursery schools can be over £100,000 in some areas, so the absence of a rebate is a significant pressure on already overstretched budgets.”

Written evidence from the National Day Nurseries Association said:

“Business rate property revaluation from April 2023 has seen providers report bill increases of 40-50%.”

In a survey of NDNA members, 782 nurseries across England were asked what they would do if they no longer had to pay business rates: 61% said they would increase staff salaries; 49% said they would reduce losses in their business; and 40% said they would mitigate fee increases to parents. If affordability and quality are as important to the Government as availability, I believe that they should take account of this evidence. I know my hon. Friend the Minister is passionate about social mobility and the benefits of early years education, and I urge him to ensure this continues to be pressed with the Treasury.

We have heard strong arguments from the Treasury about the benefit to parents of being able to work, where there is affordable childcare provision. This has been a key rationale for the expansion of so-called free hours, which we have recommended should be called “funded hours,” down the age groups. It was a key rationale behind the very welcome changes to childcare costs within universal credit. However, in that context, I urge the Minister to press his Treasury colleagues on recommendation 11 for a fundamental review of the tax-free childcare system to improve both understanding and uptake.

Her Majesty’s Revenue and Customs tax-free childcare report and survey of 2021 found that 43% of people found the name confusing or unclear. Of these, 58% said it prevented them from looking into tax-free childcare and 54% said it prevented them from signing up to the scheme. The Institute for Fiscal Studies said that

“in the four years after introducing tax-free childcare, the government spent £2.3 billion less on the scheme than it had planned.”

In the written evidence we received from parents, they said:

“The tax free childcare system is confusing and onerous to use, and complicated to calculate.”

Childminders told us:

“Not enough parents know about Tax-Free-Childcare, especially not the self-employed. Many parents also find it…difficult to set up the payments.”

My biggest disappointment with the announcements made at the Budget is that the tax-free childcare system was not touched, yet we know that the theoretical benefits of this policy are not reaching a very substantial proportion of the parents it was designed to help.

Worse, in answer to my written parliamentary questions, we have seen that even those who have gone to the trouble of registering or re-registering for support through the current cumbersome system, only around half actually claim anything from it, which does not suggest a system that is living up to its promise.

The Select Committee made a number of other suggestions for supporting affordability for parents, not least our call in recommendation 13 for better support for stay-at-home parents.

The last area I want to press particularly hard with my colleague on the Front Bench is the logic of our recommendation on offering funded support to parents in training or study. The logic is that elsewhere across education policy the Government are going out of their way to encourage people to upskill, supporting lifelong learning and investing in the long-term productivity of our country by ensuring people are better skilled. It is, therefore, counterproductive to disincentivise parents from pursuing higher qualifications by making 30 hours of childcare available only to working families on a particular income, and explicitly not to those in study. The recent report by the all-party parliamentary group for students on the cost of living and its impact on students highlighted the severe challenges facing parents in study. Addressing that, as part of our recommendation 18, would make a massive difference to that group of parents.

Supporting the workforce, expanding family hubs, not just in some areas but across the whole country, expanding the early years pupil premium and investing in early intervention and training to identify and meet special educational needs are among the other key recommendations of our report. I could speak passionately in favour of every single one of our key recommendations and, when the Select Committee meets tomorrow, I look forward to the detailed consideration of the Government’s response, but I know many other Members want to speak in the debate.

I end by commending the whole report of my Committee to my hon. Friend the Minister. Having served in the Government, I appreciate that he may not be able to accept every one of our recommendations straight away, but I hope he will recognise the weight of evidence that sits behind them, the incredible importance of getting policy in this area right and the immense value of continuing to invest in our children.

Our Prime Minister has described education as

“the closest thing we have to a silver bullet”

for improving productivity. I welcome his commitment to making education the main funding priority in every spending review—early years education needs to be at the forefront of that. Having worked with my hon. Friend the Minister over a number of years, I know how passionate he is about evidence-based policy to improve life chances for children, closing the attainment gap and tackling disadvantage. There can be no greater impact on each of those than investing effectively in early years.

I am hugely grateful to colleagues from across the House who have supported the debate and I am delighted that we have a maiden speech to look forward to from one of the House’s newest Members. I commend this report and debate to my hon. Friend the Minister.

Mr Speaker

I remind Members that this is a maiden speech and there will be no interruptions.

9.01pm
Keir Mather (Selby and Ainsty) (Lab)

I thank the hon. Member for Worcester (Mr Walker) for securing this important debate on support for childcare and the early years.

In my constituency of Selby and Ainsty enormous challenges exist for children who have additional needs and who sit at that critical juncture between the early years and key stage 1. One reason for that is the failure to build a special educational needs and disabilities school for the Selby area of my constituency, despite Department for Education funding having been allocated since 2019. That forces parents to make an impossible choice: they can place their children in mainstream schools that do not suit their needs, educate them at home with little support or have them travel for hours a day to attend schools in Harrogate or Scarborough. This outrageous situation cannot continue and, as Selby and Ainsty’s Member of Parliament, I will fight tirelessly for spades in the ground to provide the SEND school those children so desperately need.

If you will permit me, Mr Speaker, I would like in my maiden speech to tell hon. Members about my beautiful constituency of Selby and Ainsty, but before I do so I too condemn the barbaric attack by Hamas terrorists on Israel last week and send my profound condolences and personal solidarity to all innocent civilians caught in the terrible violence that has engulfed Israel and Palestine.

I would also like to take a moment to welcome another new Member to their place: my hon. Friend the Member for Rutherglen and Hamilton West (Michael Shanks). He is a person of integrity and intelligence, who I greatly look forward to working alongside, as we learn to navigate this formidable place together and show our constituents the difference that a hard-working Labour MP can make.

People in my constituency of Selby and Ainsty represent the best of Yorkshire. They are community-orientated, but personally resilient; hopeful and proud, but grounded and pragmatic; willing to give people a fair hearing, but never afraid to speak truth to power. It is that independent-minded outlook that I believe explains the most exciting political moments in our area’s past, because I am not the first by-election candidate to cause a national upset in our part of the world.

Back in 1905, Selby residents, much like their modern compatriots, had suffered through over 10 years of Conservative Government. Britain languished under the rule of an unelected Prime Minister, Arthur Balfour, too weak to govern and too lacking in authority to lead a broken Tory party, divided, unsurprisingly, by Britain’s trading relationship with the outside world. The residents of Selby looked at this Tory melodrama and said enough, using a by-election to send a Liberal, Joseph Andrews, to represent them. I am proud, Mr Speaker, that some 118 years later, local people in Selby have not lost the defiant spirit of their forebears, this time voting Labour for a brighter future for their community.

In modern times, the Selby constituency has mirrored the national picture, remaining Labour from 1997 to 2010 before being Tory-held from 2010 to now. I would like to take a moment to talk about my predecessors. My immediate predecessor is Nigel Adams, who had the privilege of representing the seat where he was raised and educated. Mr Adams deserves credit for his support for local charities such as Selby Hands of Hope, and his work to secure funding for Tadcaster’s flood-alleviation scheme. In his maiden speech, he said that there was

“no greater honour, privilege or responsibility”[—[Official Report, 9 June 2010; Vol. 511, c. 395.]](/search/column?VolumeNumber=511&ColumnNumber=395&House=1)

than representing Selby and Ainsty. I echo those sentiments and thank him for his contribution.
I now turn to Mr John Grogan, who began the tradition of Labour MPs representing the Selby area. John and I both fought our first elections in Selby as younger men, myself at 25 and John at 26, though I am pleased to say that I had a little more luck on my first attempt. I can only hope that the similarities continue, as John’s achievements for our area were phenomenal. He secured the Selby bypass, oversaw the creation of modern flood defences, and achieved funding for Selby War Memorial Hospital, a pillar of our community upon which so many continue to rely. John was an empathetic and tenacious constituency MP, and will be so again when he returns to this place at the next election.

Selby and Ainsty is a vast rural constituency, with no one single centre of gravity. Instead, ancient patterns of agriculture, river trade and commerce have created a complex tapestry of villages and towns, each with its own unique attributes. Selby itself has always been on the national map, passing the centuries under the shadow of our magnificent 11th-century abbey as a prosperous market town. It played its part in the industrial revolution with a thriving shipbuilding industry, and in recent times boasted the largest coalfield in Europe, powering Britain for decades through the hard graft of ex-mineworkers and their families, whose interests I look forward to defending and advancing. It is also clear that our town has a bright future ahead as a regional tourism centre, an emerging hub for doing business, and in its continuing role as Great Britain’s energy epicentre.

To the west of Selby lies Sherburn in Elmet, a town fired by community spirit and people determined, in the best Yorkshire sense of the phrase, just to get on with it. The place is powered by fantastic community groups such as We Are Sherburn, the Old Girls’ School, Elmet Lions and the annual Scrapper’s Cup, stewarded by fantastic local leaders. To the north lies Tadcaster and its surrounding villages. Tad is a brewing town with formidable heritage, and those Members who enjoy a Madrí, a John Smith’s, a Foster’s or even a Newkie Brown are likely to be sampling the produce from that beautiful part of north Yorkshire.

However, like so many other northern villages and towns, the success of communities in my constituency has been in spite of a Government who have consistently failed to get the basics right. In our part of north Yorkshire, it is hard to stay healthy when a GP appointment or a timely ambulance is a thing of the past, and when dental provision is so poor that one resident told me that she had had to pull out one of her own daughter’s teeth. It is hard for people to keep their head above water when average mortgage payments in our area have increased by thousands of pounds a year, and when those trying to build a life on newbuild estates are fleeced by the very companies that are meant to provide them with a decent place to live. It is hard to get on as a region when broken bus networks isolate the elderly, stop people getting to work, stifle small businesses and cut us off from the outside world.

I have no doubt about our future success, but local people know that we deserve better than what we are forced to settle for now. That hope for a fairer future is what I will fight for every single day that I am in this place, and I am grateful that constituents have provided me with this opportunity to serve, because for me, the need to right those systemic wrongs is not just about productivity, health outcomes, or pounds and pence. It is about values—Labour values—and the conviction that residents in Selby and Ainsty have a right as British citizens not just to survive but to realise their full potential, and to live decent, happy and fulfilled lives that allow them and their families to flourish.

I hold those convictions not only as a Labour Member of Parliament, but as somebody who is deeply patriotic, who believes that Britain should lead the world and set an example for what it means for the Government to serve their citizens. That belief in progressive patriotism is defined by my experience as a young person. I am the first Member of Parliament to have been born after the last Labour Government took power in 1997. I know that some Members may want to close their ears at that fact, but it means that I have grown up in a world destabilised by the technological revolution, climate crisis and war, and I will live through a century of unparalleled global upheaval.

In the face of those challenges, myself and other young people believe that Britain has a duty to become a leader again. When globalisation has failed to solve challenges such as the climate crisis, British business and British workers must lead the world in securing green prosperity and winning the race to net zero. When the age of peace on the European mainland is over, and America’s ability to provide stability is in question, the UK must lead in NATO, support our European partners, and enhance our armed services’ ability to defend our interests. When democratic ideals are threatened, either by autocratic regimes or the destructive power of terrorist organisations such as Hamas, the UK must defend our allies overseas, uphold international law and human rights, and strengthen our democracy at home, protecting civil liberties, enhancing trade union rights, and pursuing meaningful devolution of powers across our United Kingdom.

As young people, this is the future we choose. We are clear-eyed about the challenges that lie ahead but determined to play our part in realising our country’s promise. As I said on the night of my election, I hope to be a representative of that power of young people to make a difference. But we will not do it alone. I was sent to this place by a constituency whose population is older than the national average but who put their faith in me to defend their interests. That is because, in spite of the divisive politics that seeks to pit one generation against the other, in Selby and Ainsty we share our ambitions for our community and our country, and are committed to realising them together.

It will be the privilege of my life to play my part in this work, working in our Parliament, which I revere so deeply, to give back to my community and country, which I love so very dearly. Thank you.

Mr Speaker

I am now putting a four-minute limit on speeches.

9.11pm
Cherilyn Mackrory (Truro and Falmouth) (Con)

I warmly welcome the hon. Member for Selby and Ainsty (Keir Mather) to his place. I am sure that he is going to be an absolute asset to his area. Not many people may know that, although I am a Member of Parliament in Cornwall, I was born and raised in North Yorkshire. I therefore wonder why none of the children in his constituency wants to go to school in Scarborough, because I thought it was a fabulous place to go to school. I understand his campaign, however, and I admire his confidence and desire to stop older people and younger people being pitted against each other. He made me feel incredibly old, because I left Scarborough to move south before he was even born, and I had thought that I would live my whole life there. I genuinely welcome him to his place.

I thank my hon. Friend the Member for Worcester (Mr Walker) for securing this debate, and I also thank the whole of the Education Committee. This is a truly important debate and I agree with most of his recommendations today. This Government have made strides in improving the quality of childcare. As a parent with a young child at home—she is nine now—it was not that long ago that I also took an interest in these matters. It is important for all working parents and all parents who need to go into training to improve their lives that we take this sector very seriously and see what we can do to make things better.

During the spring Budget statement, I was incredibly proud to sit on these green Benches as part of a Government who were supporting childcare and early years, putting them at the heart of their long-term economic strategy. It is something that I have long campaigned for. With the Chancellor pledging to double the Government’s support from £4 billion to £8 billion by 2027-28, there is no doubt that we are serious about getting to grips with this issue. I feel that I can hold my head up high at my daughter’s school gates, in the knowledge that working parents in Truro and Falmouth will save, on average, up to £6,500 a year on their childcare bills. This really matters to all the people in my constituency.

It is never going to be straightforward to expand on that scale in what is a predominantly private sector-led service. That is why I also appreciate the pragmatic steps that the Government are taking to ensure the deliverability of promises and to try to take the sector with them. The necessary changes being made to the staff-to-child ratios, which can be controversial, are actually bringing them in line with those in Scotland and other countries. I believe that gives childcare providers the freedom necessary to deliver 30 hours of free childcare in the short term, while knowing that perhaps we need a longer-term solution. That is combined with the Government’s work to encourage people back into the childcare sector. I am excited by that expansion, which will have a positive effect on the people of Truro and Falmouth.

I am going to skip quite a lot of my speech, because we are running out of time. I want to add to what the Chair of the Select Committee has said. Perhaps this issue will be for another day, but I have campaigned on it before. I have further ambitions for the sector. Eventually I would like early years educators to be given the same pay, status and training as primary school teachers. It is my belief that the work done with under-fives is every bit as important as—if not more important than—what primary school teachers do. There would be a cost and an upheaval to the sector to bring that into reality, but it is important. It would help to solve some of the issues with the growing SEND sector. When things are a little more calm, I would like real thought to be put into bringing early years educators in line with primary school teachers, particularly in training but also in their all-important career status.
9.15pm
Stephen Farry (North Down) (Alliance)

I warmly welcome this debate. There may well be a few speakers from Northern Ireland today, which illustrates the fact that there is a real crisis in Northern Ireland, where we are being left behind. The Government talk a lot about so-called super-parity measures in Northern Ireland, but this is an example of a super-disparity that urgently needs to be addressed. We do not have a devolved Assembly functioning in Northern Ireland. That is an ongoing crisis, but this is a crisis for households and families, and it needs to be addressed urgently by someone with Government authority of some kind.

Parents are really struggling with childcare costs—in many cases, they are greater than their mortgage costs, which we know are challenging. That puts into context the sheer scale of the problem that families face. Childcare is vital infrastructure, both social and economic. It is a form of early intervention, early education, an anti-poverty measure and a means to improve economic activity, long-term productivity and gender equality. The Government have rightly addressed those things, but we need an affordable and high-quality childcare policy.

We have concerns about the 30 free hours scheme that is in place in England. We do not feel that it is appropriate—it is certainly not the measure we want in Northern Ireland. Last week, my party published a paper on childcare and what we could do differently in our region. We have listened to expert evidence—some of which is reflected in the Select Committee’s report and recommendations—that the free hours approach fails children in low-income households; distorts the market for childcare, creating issues in the sustainability of supply; and centres on parental employment rather than on the child. We need to do things differently around universal benefits, which will help to stabilise and enhance the sector and provision.

The sustainability of the sector is an important factor. We should not be in denial about the fact that a lot of labour from other parts of the world, including the European Union, was vital in sustaining the childcare sector. That is also a pressure point under the new dispensation. This is a key investment that we want to make in our future, and one that the Government have to make—preferably through a restored Assembly. In the absence of that, I call on the UK Government to intervene, because the parents and children of Northern Ireland cannot wait any longer for a properly resourced childcare scheme.

9.18pm
Greg Smith (Buckingham) (Con)

I congratulate my hon. Friend the Member for Worcester (Mr Walker) on securing this important debate. At the outset, I should declare that two of my three children are below school age. We are very lucky that we have found an exceptional childminder and a superb pre-school that my two sons enjoy every day of the school week. However, from talking to many mums and dads around my constituency, I know it is not always easy to find the right childminder, nursery, pre-school or whichever setting they want and is right for their child. When they do find it, it is even more difficult to pay for it and to meet the high costs of childcare.

I warmly congratulate the Government on the massive increase in spending on subsidised childcare that will apply from 2025 to children as young as nine months old, and when the Chancellor announced it, I welcomed it. However, whenever there is a great announcement such as that, there needs to be significant scrutiny of the detail. We need to iron out any of the gremlins that might be in there. In the limited time we have, I want principally to outline two points through the lens of a wonderful childcare setting in my constituency, Big Top Nursery in the village of Waddesdon, which I visited earlier this year.

The first point relates to the funding rates that we have as of this academic year. I would really appreciate it if the Minister could meet me at some point to go through the detail further. However, I inform the House that, on the current rate the Government will pay, compared with what it costs Big Top Nursery to provide childcare, it is currently losing £1.40 an hour on a three-year-old, which equates to £14 a day. For a child who goes to Big Top for 22 hours a week, which is a standard placement for that setting, the nursery is making a loss of £30.80 per week, which across those 22 hours-a-week children adds up to a loss of £1,500 every single year. That amount of money is not sustainable if that private nursery is going to remain in business and provide the excellent childcare that it does in the long term. Either we need to find a way to ensure that nurseries can charge a top-up, with the “free hours”, as they are badged, actually rebadged as subsidised childcare—not creating the expectation that everything is free, welcome though the funding is—or there needs to be another model that recognises that such a gap exists across thousands of settings across the country.

The other point I wish to mention very briefly is the way Ofsted treats pre-school and childcare settings. Big Top Nursery was subject to a report from Ofsted that it deems deeply unfair. Questions to staff were so unclear that staff had to ask the meaning of them, and the inspector then gave them a report that was not fitting for the setting, which had parents up in arms. My challenge to the Minister is to find a way to fix that when every single parent wants the setting to remain open and to be where their children go. As yet, there is no mechanism for parents to feed into such a process.

9.22pm
Alex Cunningham (Stockton North) (Lab)

I congratulate my hon. Friend the Member for Selby and Ainsty (Keir Mather) on a full political speech delivered with real energy, style and passion, though I could have done without the age joke.

I sat on the last Childcare Bill Committee seven years ago, and I warned then that the plans would not fly because of lack of investment. We have just heard an example of that from the hon. Member for Buckingham (Greg Smith). The Minister all those years ago said that the market would create itself. It did not, and costs remain high while the number of places available is restricted. The spring Budget was an opportunity to get that right, and I welcomed the announcement of a funding package as well as the extension of the subsidised 30 hours entitlement—it was a step towards helping parents and providers with affordability and sustainability concerns—but this investment was too long overdue, and more will be needed to address the structural problems in the early childhood education and care system if the funding increases are to be implemented effectively.

Years and years of underfunding early years entitlements has left providers unable to invest in development and straining to survive. Children and families in my constituency and across the country deserve equal opportunities to thrive and fulfil their potential. The new clauses I moved all those years ago in that Bill Committee are still relevant today, but they are not on the statute book. One would have mandated the Government to ensure that all three and four-year-olds had access to high-quality, flexible and accessible early education and childcare provision, delivered by well-qualified, confident and experienced practitioners and led by an early years graduate. Sadly, that did not happen.

Childcare settings in disadvantaged areas are the least likely to be of high quality, which is why I argued during that Bill Committee for the Government to have the power and the responsibility to ensure that all our children are cared for and taught by highly qualified professionals. Instead, we have a situation in which nurseries are unable to pay the wages needed to attract early years teachers because of the chronic underfunding of the free education entitlement by the Government. At the same time, universities are withdrawing their early years teacher training courses because they cannot attract applicants.

It is widely recognised that effective early intervention and support is vital to improve the outcomes for children with special educational needs and disabilities. Such children have the same aspirations for the future as other children, but they face more barriers. Across education, health and care, we need to know that these children’s needs are being met and not missed. Despite their failures and initiatives, the Government still lack the ambition necessary to focus on those children whose life chances are being blighted from their earliest years, in order to close the attainment gap.

Last week, I was delighted to hear my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) set out Labour’s plan for the ambitious reform of childcare. With a taskforce chaired by Sir David Bell, Labour’s early years plan will ensure that we have a childcare sector that works for families, children and the economy, and that high standards are not just for those families who can afford them. The chief executive of the London Early Years Foundation responded to the policy, saying:

“As children from disadvantaged backgrounds struggle to find access to quality nursery education—thereby increasing the attainment gap even further—we welcome Labour’s new ambitious review to fix what is currently a broken childcare system.”

The Tory Government have broken the childcare system, from axing huge numbers of Sure Start centres to misunderstanding how they would deliver the promised provision seven years ago. There was no plan then and there is none now. It is time for them to move on.9.26pm
Siobhan Baillie (Stroud) (Con)

I join in the praise of my hon. Friend the Member for Worcester (Mr Walker) and his Committee’s comprehensive report. We have 30 to 40 years’ worth of evidence about the benefits of early intervention and improving the first 1,001 days of a child’s life. The report adds to that evidence base.

All too often, we have a debate focused on getting mums and dads back into work, when actually the early years should always be about families. We should never forget that for some children, good early years care—being able to go to a nursery—is a lifeline. It is a chance to escape a violent home, to learn, to have some routine and to eat regularly. I had quite a chaotic home life myself and know all too well how that can affect people. The report’s focus on the quality of early years and childhood care is imperative, as is the focus on making sure that parents have parental choice, which is something we should all strive to achieve.

On parents, let us be honest: we love our kids but they are hard graft. This morning, I said to my daughter that she needed to drink her water like mummy, and she looked me square in the eyes and said, “But I don’t want to be like you.” Then my baby threw her Weetabix at me and snotted down my top—and that is before I came to this mad place to deal with thousands of emails.

Parents are quite literally on the edge because having little children is hard work, but add in mortgage-level childcare costs, the daily juggle, things going wrong—my mother-in-law has broken both her ankles—and finding childcare and it all adds up to quite a lot of pressure. The transition to parenthood is excruciatingly tough on relationships. We should not forget that it is one of the few life stages in which relationships are likely to break down, causing family breakdown.

I did a comprehensive report with Onward, which gave evidence to the Select Committee, and in our recommendations we focused on families and talked about reducing complexity, as there are currently eight childcare schemes; front-loading child benefits; sharing parental leave; subsidising support in training; and really focusing on the whole family existence and what we know about the weird and wonderful lives of families.

One of my girlfriends who is currently in the trenches with a new baby sent me an article about the South Korean Government, who are basically subsidising mortgage rates—people get lower mortgage rates if they have children—because they are trying to deal with their low birth rate. Governments all around the world are trying to think creatively.

For the first time we have a Government in which the Prime Minister and the Chancellor of the Exchequer have put the early years at the heart of a growth agenda. I take issue with the remarks of the hon. Member for Stockton North (Alex Cunningham). The Labour party does not have a plan; it talks about having a review and about talking a bit more. I put it to Opposition Members that they have in the Committee’s work a review and all the details.

We give the workforce the most precious things in our lives, yet they feel undervalued and underpaid. There is a litany of recommendations in the report. I look forward to the Minister’s comments on the recruitment campaign. We must stop calling the hours “free”; they need to be funded or subsidised. The early years premium, for example, is £376 per annum, and £1,400 for primary schools. We need to see tax changes on business rates and VAT. I could go on and on, Madam Deputy Speaker, but I will not.
9.30pm
Claire Hanna (Belfast South) (SDLP)

I congratulate the hon. Member for Worcester (Mr Walker) on securing the debate, and the hon. Member for Selby and Ainsty (Keir Mather) on an excellent maiden speech. It reminded me that my maiden speech as a Member of the Legislative Assembly some years ago was on childcare. I hope that he is slightly more successful than me in achieving his political aims.

Members across the Chamber have made excellent points about the chronic failure to think big on the issue of childcare, and about the series of minor interventions to tinker with a sector that is struggling under the weight of complex funding streams. Such interventions have increased demand on the sector, as various promises of free hours are made without any meaningful work on the supply side and so do not add up to any sort of solution. As we have heard, the UK has the highest childcare costs in the OECD. Northern Ireland is falling even further behind because, as my colleague the hon. Member for North Down (Stephen Farry) said, successive Executives have failed to take sufficient interest in the issue.

The crisis is not new. As I said, I addressed it as an MLA back in 2016, and I subsequently established an all-party group, which has driven quite substantial policy change and ideas. However, when government is down more than it is up, implementing those things is difficult. There has been quite a bit of progress in people’s understanding of the issue, and I credit Northern Ireland groups such as Employers For Childcare and Melted Parents NI, as well as the Federation of Small Businesses, with correctly framing the issue as one of gender equality in the workplace, of outcomes for children and, fundamentally, of economics. The issue is crucial in tackling Northern Ireland’s chronically low productivity and high levels of economic inactivity.

In January, my Social Democratic and Labour Party colleagues in the Assembly set out a plan for a two-stage rescue plan to address the acute cost of living pressures that families face, including gargantuan—and growing—childcare bills, which, as Members have said, dwarf housing and other costs; and to address the recruitment and retention crisis that the sector faces. We also had a longer-term strategy that would borrow from successful—and usually social democratic—economies around the world. We noted at that time the inverted pyramid of funding that means that 10 times more is spent on post-primary education than on early years education, despite all that we know about the impact of a child’s first 1,000 days.

Nobody is pretending that this is a simple issue, but the necessary fixes for childcare start from the principle that it is a common good. Yes, having children may be meaningful in our lives—I think back to being asked by an indignant morning radio presenter whether this was not just chronic self-interest on my part because I had big childcare bills—but fixing childcare starts with an acceptance that, as well as being a meaningful experience, parenting is necessary for the replenishment of the human race and the workforce of the future, so providing for childcare is a matter for us all. It starts from the knowledge that more equal societies do better. That means affording everyone an equal opportunity to thrive in the workplace, and understanding that giving children a better and more equal start in life is good for the public purse and for society throughout their lifetime.
9.34pm
Danny Kruger (Devizes) (Con)

I thank the Chairman of the Select Committee for opening the debate. I also add my congratulations to the hon. Member for Selby and Ainsty (Keir Mather), who gave an absolutely tremendous speech, full of patriotism and love of community, which is just what we need to hear from the Labour party. He is already an asset to this place, so I welcome him and look forward to the contribution that he will make.

It is a very good thing that the Government are committing such a significant amount of money to the early years. Normally, I do not want to boast about Government spending as if it is a sort of proxy for good work on its own. In this case, however, doubling the contribution that is being made, from £4 billion to £8 billion, is a tremendous demonstration of the Government’s belief in early years and family policy, so I welcome it.

I echo the point made by my hon. Friend the Member for Stroud (Siobhan Baillie) about the importance of the birth rate and fertility, which is a great challenge facing countries around the world, and something that our country will have to grapple with. With that in mind, it is very important that we do put money into families. My anxiety, though, is about the method of implementation and the effect on pre-schools. We are talking about institutions that deliver perhaps 30 hours of education and childcare per week. Increasing the funded hours effectively makes the state the sole buyer of those places at pre-schools. Effectively, we are nationalising these schools and making them clients of the Government. That might be okay. There is nothing wrong with that in principle, except for the fact that the Government are traditionally not very good at setting prices. If, as we see in Wiltshire, the price that is set is way below the actual amount of money that it costs to run the pre-school, then we have a problem. We are distorting the market to the point of destruction. I am very concerned about the effect of that on pre-schools.

Nurseries are able to do better. They run throughout the year and are able to cross-subsidise and to charge for private places. I am afraid the effect might well be that we are driving parents into nursery provision, which is often of a lower quality and out of the pre-school sector. I received a letter from Little Dragons pre-school in Devizes, which I went to see the other day. It said that the current direction of Government policy is towards the state-funded, impersonal supervision of children by profit-motivated businesses from the age of two. I am not saying that is the case for all nurseries, but it is a concern.

I just want to make a simple suggestion—probably an oversimplistic one—to the Minister. We massively over-complicate the provision of childcare and the way that funding works, to the great distress of families and, of course, these providers. We are now putting £8 billion a year into early years. That is £6,500 per family. Why do we not just give that money, by some means or another, directly to families to use as they see fit? In the very early years, up to the age of two, I think that could be in the form of cash—a direct entitlement to parents to spend as they see fit, whether in a formal or informal setting. For three and four-year-olds, there could be a voucher system, redeemable at any registered institution, and it should be allowed to be topped up.

It is wrong that there should be a complete monopoly of state funding in these institutions. Why can a charity like Little Dragons not charge a bit extra if it needs to? Of course, it will also provide a free place to a child of a family who could not afford any additional fee. These schools should be allowed to work that out themselves with their community. Of course there is also quite a significant universal credit childcare entitlement that should enable people to support that cost.

I think we can be more imaginative, more flexible and more respectful of the choices that parents themselves want to make, both for the sake of their own family finances and the way they want to live their lives, but also in order to sustain a healthy and vibrant early years sector.

9.37pm
Taiwo Owatemi (Coventry North West) (Lab)

I thank the hon. Member for Worcester (Mr Walker) for securing this important debate, and I welcome my hon. Friend the Member for Selby and Ainsty (Keir Mather) to his place. I commend him for his outstanding maiden speech—he has made his constituents very proud tonight.

Throughout this cost of living crisis, countless nurseries in my constituency of Coventry North West have struggled to keep up with ever-rising prices. At Georgie Porgie’s pre-school, Katie, the director, fought to keep her nursery open after her utility bills tripled. She was lucky and was able to save her business, but countless other nurseries across the country have been forced to close. We need only look in the faces of the nursery workers who have lost their jobs, and their security, to see that our current system is failing. The inadequate levels of state funding offered per child leaves nurseries to struggle with insufficient funds and inadequate support.

The system fails not only our nurseries, but the parents and carers who use them. Closing nurseries means less space for their children, packed waiting lists and longer morning commutes. But a financially struggling nursery almost always means a rise in fees. It is not surprising that Britain now has the third most expensive childcare system in the world, with more than one in five households spending more than half their income on it. For women who wish to return to work soon after the birth of a child, those costs crush their aspirations. Three in four mothers say that childcare fees are so significant financially that their best option is to stop working altogether. I know from speaking to many families on the doorstep that this is an issue that many of them raise with me. Our system hinders the opportunities and, ultimately, the freedom of women who wish to return to work, and we cannot continue to allow that to happen.

I strongly support my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) in her plan for an extensive review of the system. I believe that any reform we implement must move us closer to the examples of countries such as Finland or Estonia, where there is a better-funded, expanded system of care. As the shadow Secretary of State has suggested, that should involve empowering local councils to deliver their own childcare, filling the gaps in provision. But it should also include more substantial grants offered to nurseries, which could stabilise the industry, while also potentially adopting a Finnish-style tiered system, where each family’s fees are far more closely linked to their income.

While I welcome the Government’s plan to expand childcare provision to children as young as nine months old, those changes are simply not enough to tackle the challenges in our system. If we seriously wish to give our businesses and parents a system that works, we have to go for far more substantial reforms. Sticking-plaster solutions just will not work. I urge this House not to turn a blind eye to our childcare system, but to press ahead with the meaningful, long-term changes that this country desperately needs.

Madam Deputy Speaker (Dame Rosie Winterton)

I will call Jim Shannon, but I do need him to sit down at 9.44 pm so that I can bring in the Front-Bench speakers.

9.41pm
Jim Shannon (Strangford) (DUP)

Thank you very much, Madam Deputy Speaker; it is a pleasure to speak in this debate, and I congratulate the hon. Member for Selby and Ainsty (Keir Mather) on his excellent speech.

Two women in my life have made a big difference. The first is Sandra, my wife, who I have been married to for 36 years. She brought up our three sons; she looked after them, she reared them and she is the person who can take the credit. Not only that, but she is now a grandmother and looks after our six grandchildren, with a stint at 5 o’clock in the morning and numerous stints in the afternoon. I mention that because that is the difficulty with childcare and early years: without my wife’s assistance, my boys and their wives could not afford to go to work. What was easily afforded 10 years ago is not afforded the same way today, particularly when parents are working beyond 65 years of age.

I think it is important, in my contribution to this debate, to say that we cannot talk about support for early years and children without highlighting the Government’s determination not to raise child benefit thresholds since 2013. From 2013 to now, the average increase in the UK consumer prices index has been 25.9%. How can any mother and father afford childcare and early years care? They quite simply cannot. If the boss gives them an extra £2,000 on their wages, that does not help, because it puts them over the threshold and they do not get the benefit. I want to put that case on the record.

With that 25% increase in CPI, a family who paid £98.15 per week for 25 hours of childcare in 2013 would now pay £285.31 per week. That is massive. For any mum and dad with a family to rear, there is no way they can do that—and if they earn more than £50,000, they do not get a tax credit to help them. These are people in ordinary jobs, trying their best to make their mortgage payments, heat their homes and educate their children, and they are not getting one penny from the Government in child benefit. That is why an uplift of that threshold is so important.

I will quickly give the House the example of the second woman I want to mention—not the second woman in my life—my parliamentary aide, who writes all my speeches. She leaves work, collects her children from the childminders, helps them with their homework, prepares their meals, gets their lunches ready and makes sure they are healthy, as they are not allowed any unhealthy food until Friday, which means peeling carrots, making fruit salads and cubing cheese. She does the housework, including the washing, and puts her children to bed, making sure to spend at least 20 minutes reading with them. The point I am making is that the pressure on her day is phenomenal.

I finish with this point: we must do something now before a generation of families are submerged in debt and stress and cannot recover. They need help with childcare, help with finances and help to manage expectations. A message must be sent to working families, as well as to single-parent families: “We see you, and we will support you.” That is what this debate is about.

9.44pm
Helen Hayes (Dulwich and West Norwood) (Lab)

I congratulate the Chair of the Select Committee, the hon. Member for Worcester (Mr Walker), on securing this important debate today and on the Committee’s excellent report on support for childcare in the early years. I am grateful to all hon. Members who have spoken in the debate, and I particularly congratulate my new hon. Friend the Member for Selby and Ainsty (Keir Mather) on a truly outstanding maiden speech. He has shown what a brilliant champion he will be for his constituents on the local, national and international issues that shape their lives. We are so glad to have him with us in this place.

I do not have time to mention specifically all the other contributions, but we have heard from hon. Members across the House about the eyewatering childcare costs that families face. We have heard about the deficit in Government funding for the so-called free hours. We have heard about the recruitment and retention problems faced by early years providers and about a sector that is under unbearable pressure.

Children’s earliest years are crucial to their development and life chances. Many of the factors that contribute to the education attainment gap are already present by the time children start school. Early years education and childcare should be focused on ensuring that families have the early support they need to give their child the best start in life and education, while also delivering affordable childcare to enable parents to work.

The current hours-based model for childcare funding is fundamentally not working for providers or for families. For families, it is inaccessible and complex and does not reflect the reality of their lives and working patterns, nor does it deliver affordability. At the same time, 4,800 providers were forced to close their doors last year due to rising costs. The current model is not working for them either.

Parents have seen rising costs year on year, and growing childcare deserts where they cannot access the childcare they need. There are now two children for every Ofsted registered childcare place in England, creating a barrier to parents, particularly women, taking on employment. We are seeing women leaving the workforce for the first time in decades, priced out by the costs of childcare. It is parents of children with special educational needs and disabilities who find it hardest of all to find childcare places.

The Government have delivered a triple whammy—the most expensive childcare in Europe, an unviable financial model for providers and significant childcare deserts. It is a colossal failure for both families and the skilled professionals who work in early years. The policies that the Government have introduced in response to the crisis, after 13 years of failure and only because of intense pressure after the Chancellor spoke a year ago about the need to expand the labour market but mentioned the role of childcare only once, will not fix the problems. Additional funding is welcome, but pumping it into a system that is already broken will not deliver the change families need.

Childcare providers are clear that, as things stand, they cannot deliver the expanded entitlement. A survey of 800 providers by the Early Years Alliance found that only 20% of providers who currently offer places to two-year-olds plan to deliver additional places under the expanded entitlement. Another 33% said that they were unsure whether they would deliver places under the new scheme. That is because the Government have no plan for expanding the workforce to deliver an expanded entitlement in a sector already struggling to recruit and retain staff, no plan for premises for which there are rightly strict requirements in the early years sector, and no vision for quality in the early years.

Childcare must be about more than just minding children while their parents work. It should be able to provide every child with high-quality early years education. A Labour Government will be driven by our mission to break down the barriers to opportunity at every stage, including by boosting child development with 500,000 more children hitting the early learning goals by 2030. Labour is determined that childcare should offer more flexibility, better availability and high standards for children and families. We will draw on the best practice internationally to drive an ambitious and coherent programme of reform, with higher standards for early education, better availability, stronger regulation of the financial sustainability of providers and a clear strategy for the childcare workforce. We have commissioned former Ofsted chief inspector Sir David Bell to undertake a full review of the early years sector and help to develop the detail of our early years plan.

A Labour Government will work with the early years sector to build capacity, including by removing the legislative barriers to local authorities opening new provision. We will also work with the sector to ensure that there is a plan for the early years workforce that offers more opportunities through high quality training and recognition for the skilled work of early years practitioners. We will also recognise that childcare does not end when children start school. We will deliver funded breakfast clubs in every primary school to help parents work, provide opportunities for children to play, learn and socialise at the start of the school day and ensure that every child is able to access a healthy, nutritious breakfast and start the school day ready to learn.
The Government’s record is the most expensive childcare in Europe, childcare providers closing their doors and childcare deserts across the country. They have always regarded children as an afterthought, and in doing so they have failed children and their families. After 13 years, their sticking-plaster solutions will not fix things now. A Labour Government will deliver a childcare system that works for children and their families from the end of parental leave to the end of primary school. We put children at the heart of our programme of government from 1997 to 2010, and we will do so again.

9.51pm
The Parliamentary Under-Secretary of State for Education (David Johnston)

May I first congratulate my hon. Friend the Member for Worcester (Mr Walker), the Chair of the Education Committee? He has helped with the development of our policy in this area, and his Committee produced a good report that we have responded to. I am also grateful to him for relinquishing his time so that I have longer to respond to some of the points made in the debate.

I also congratulate the hon. Member for Selby and Ainsty (Keir Mather) on giving his maiden speech, which I thought he delivered with aplomb. He gave us a lovely portrait of his constituency, which I visited—on the losing side—a number of times earlier in the year. I have no doubt that he will be a strong advocate for his constituents.

May I also take the opportunity to pay tribute to the hard work and dedication of our early years and childcare workforce? Through challenges from the pandemic to the rising costs of living, they have worked tirelessly to provide care that allows children to flourish. Extensive evidence makes it clear—a number of hon. Members touched on this—that high quality early years education has a positive effect on the cognitive, behavioural and social development of children in both the short and long term. Building a strong foundation for every child is at the heart of the Government’s agenda, and it is critical to enabling children to succeed both at school and later in life. That is true for all children, but as hon. Members will know I have a particular interest in disadvantaged children, having run charities for them before I became an MP, and it is especially important to try to ensure that they get the right support in their earliest years, as my hon. Friend the Member for Stroud (Siobhan Baillie) touched on in her excellent speech.

High quality childcare is also fundamental to building a strong economy, allowing parents to enter employment, take on more hours or choose from a wider range of jobs. That is particularly important for mothers, whose employment rates and pay have been and continue to be disproportionately impacted by having children.

The Government have a strong track record of supporting parents with the cost of childcare, supporting disadvantaged children and ensuring that childcare is of high quality. In September 2010, we extended the three and four-year-old entitlement that parents typically take as 15 hours a week for 38 weeks of the year. In 2013, we introduced 15 free hours a week for disadvantaged two-year-olds. In 2017, the three and four-year-old entitlement was doubled to 30 hours a week. Now, recognising that childcare is one of the biggest costs facing working families today, the Government are making the largest single investment in childcare ever.
This investment—an additional £4.1 billion—will double the amount being spent by the Government on childcare so that by September 2025 all eligible working parents will be able to claim 30 hours of free childcare—I will come back to the word “free” in a minute—from when their child is nine months old until they start school. As hon. Members know, that will be rolled out in stages. From April, eligible parents of two-year-olds will be able to access 15 free hours. From September, eligible parents of children aged nine months and upwards will be able to do likewise. The full 30-hour entitlement will come in from September 2025.

Alex Cunningham

We are all going to welcome additional funding within childcare and the expansion of services, but surely we need a very clear workforce plan if we are actually going to deliver all this.

David Johnston

I am grateful to the hon. Member, because I am about to come on to workforce. However, just before I do so, alongside this we want to increase the supply of wrap-around care to enable families to work more, or flexible, hours. We are investing £289 million in start-up funding to provide local authorities with funding to set up wrap-around provision from 8 am to 6 pm in their areas. More broadly, local authorities are critical to delivering this expansion of childcare, and we are working closely with them to understand the challenges they face and ensure they have sufficient places to meet parental demand. We will shortly be appointing a contractor to support them in that work.

There have been some key themes in this debate, beginning with funding rates. By 2027-28, we expect to be spending more than £8 billion every year on childcare. We have already increased the funding paid to nurseries for the existing entitlement by £204 million this year, rising to £288 million next year. That means that the national average rate for three and four-year-olds has gone up to £5.62 an hour, and for two-year-olds it has gone up to £7.95 an hour from £6—an increase of a third. Those rates are informed by a survey of more than 10,000 providers that we carry out in order to understand the funding pressures they face. That said, I am very happy to meet both my hon. Friend the Member for Buckingham (Greg Smith), who raised issues in his constituency—there has been a 10.1% increase for providers there—and my hon. Friend the Member for Devizes (Danny Kruger), where there has been a 6.8% increase. I am happy to continue that discussion.

On quality and flexibility questions, it is worth first noting that we have some of the highest-quality childcare in the world, with 96% of early years settings rated good or outstanding. However, we are working with the sector to increase flexibility and remove unnecessary burdens. In September, as my hon. Friend the Member for Truro and Falmouth (Cherilyn Mackrory) touched on, we changed the ratios for two-year-olds. We are pushing landlords to be more flexible and to allow childminders to operate on their premises, and we will shortly announce our response to the recent consultation with the sector about the early years foundation stage, where we are hoping to make a series of changes to help practitioners more easily do their jobs while maintaining higher standards.

Delivering expansion is going to require a significant boost to the workforce, so it is key that we are able to encourage more people into this sector—to raise its status, as my hon. Friend the Member for Truro and Falmouth touched on. In the new year, we will launch a big recruitment campaign to encourage people to consider working in a nursery school or as a childminder. We are expanding the early years professional development programme: nearly 25,000 people are already undertaking apprenticeships in this sector, but we are looking at accelerated apprenticeships and degree apprenticeships and will also be running early years skills bootcamps from next year to try to get more people into the sector. A start-up grant scheme for childminders, which will provide £600 for those registering with Ofsted and £1,200 for those registering with a childminder agency, will also be starting shortly.

Very briefly, I will touch on some other points made by the Chair of the Select Committee. Our funding rates do take business rate costs into account, and in the autumn statement the Government announced a freeze to the business rates multiplier, a tax cut worth £9.3 billion over five years. Small business rate relief exists, as does relief for charities, but I am happy to look at the extreme cases that my hon. Friend set out. He is right to flag the issue of tax-free childcare, which can save parents up to £2,000 per year on the cost of childcare, or up to £4,000 for children with disabilities. We are trying to drive up the take-up of that through our Childcare Choices website. As for people in education and training, a big part of this offer is to try to encourage people into work: students are eligible for the universal 15 hours for three and four-year-olds and for the 30 free hours if they meet the income criteria, and there is also the childcare grant and the parents’ learning allowance. However, I have heard the point that my hon. Friend has made.

I think I have covered most of the points that people have made. A number of Members from Northern Ireland have spoken: obviously, this issue is devolved in Northern Ireland, but I will just say that next week, I am chairing a meeting of the British-Irish Council on the topic of childcare. I am sure we are going to discuss childcare in both Northern Ireland and the Republic.

I think I have covered most of Labour’s commentary. I would be a lot more amenable to criticism from the Labour party if it had any policy whatsoever in this area. As it does not and all it has done is commission a taskforce to tell it what to think, I will close the debate there.

Question put and agreed to.

Resolved,

That this House has considered support for childcare and the early years.