PARLIAMENTARY DEBATE
Childcare: Affordability and Availability - 21 February 2023 (Commons/Westminster Hall)

I beg to move,

That this House has considered the affordability and availability of childcare.

It is a pleasure to serve under your chairmanship, Mr Davies, and we hope that Sir Christopher, who was due to chair this debate, is okay. I sought this debate because we face a crisis in childcare. I have heard from nursery providers, parents, national experts and my local council about the scale of the crisis, which I doubt even Government Members will try to deny.

The universal availability of good-quality, affordable childcare really matters: it matters in the early years, it matters at the start and end of the school day, and it matters at half-term and in holidays. Why? It matters to children and to their development, because it helps them to learn social skills and how to interact with those around them. Yet, according to the Sutton Trust, too many children are now starting school without these basic skills, and more of those children are at schools with the most deprived intakes.

Adequate and affordable childcare enables parents—mothers, in particular—to return to work and to work full time, yet many mothers, regardless of what they earn, are deciding to delay going back to work, or have to work part time, because of the affordability crisis or the lack of availability locally.

This crisis must surely also add to the gender pay gap. Groups such as Pregnant Then Screwed have been tireless campaigners on the issue, and over the past week I have heard from many women about it. Sadly, I am not able to quote them all, but I will share some of their experiences. Katerina, a teacher, said:

“As an educator, it’s mind-boggling that my monthly take-home earnings barely meet our childcare costs. We are forgoing many other purchases and necessities, and have no plans for the future.”

Steph said:

“The cost of nursery would be two thirds of my take-home salary. This is not financially sustainable, especially with the increase in bills.”

She also said:

“The possibility of equality is dangled in front of us, only to be systematically taken away.”

Ellie messaged me to say that the cost of childcare is preventing her from working more than three days a week and from having further children.

The unaffordability of childcare is driving a bulldozer through the last 100 years of progress on women playing an equal part in the workplace and in our economy. I want today’s debate to be a chance for the voices of those women to be heard.

I thank the hon. Lady for bringing forward this debate, and I apologise that I cannot be here for the whole of it. In Northern Ireland, a full-time childcare place is £170 a week, which equates to £680 a month or £8,000 a year. For a working family with two children, we are talking about an extortionate amount of money. These families are often forced to rely on grandparents or to cut their hours accordingly. Does the hon. Lady agree it is time for the Government and the Minister to look at the cost of childcare not just in England but across the UK and to take the steps necessary to ensure that working parents can afford childcare without being plunged into poverty?

I thank the hon. Gentleman for that excellent point. This is a universal issue across the UK and affects people at all income levels and in all areas.

I recently spoke to a friend who has a young baby and who is planning her return to work, having struggled to find a nursery place. She told me that Sweden, where her brother lives, pays £100 per month per child for a nursery place. However, across England, childminders are packing up and nurseries are closing or cutting places.

I thank the hon. Lady, my constituency neighbour, for giving way, and I congratulate her on securing this extremely important debate. On the supply of childcare, does she share my concern that Ofsted figures show that 10,000 childcare providers closed last year alone and that there was a net reduction of 4,000 overall? Analysis by the London Early Years Foundation shows that many of those providers are in disproportionately poorer areas, where people cannot afford to pay for childcare.

By highlighting those shocking Ofsted figures my neighbour from Twickenham has powerfully expanded on the point I was making.

The Minister will no doubt describe the various Government support mechanisms for childcare, but they are not working. Government per-place funding for funded places is falling further and further behind the cost to providers. Providers in less well-off areas are struggling because they cannot rely on fees to top up their income. That means that places are hit even harder—yet another example of the Government levelling down.

Then there are the estimated 15% to 20% of children with special educational needs, who face further inequality due to the lack of specialist childcare. As documented by Coram, there is inadequate funding for SEN childcare. A survey by the Early Years Alliance found that 92% of childcare providers have to fund additional support for children with special educational needs and disabilities out of their own pockets.

[Yvonne Fovargue in the Chair]

On the challenges that childcare providers face, I met local early years leaders in my constituency in November. They told me that, although the pandemic had affected their viability, the cost of living and the funding crisis are having an even bigger impact and are doing even more damage. Their food costs are up 40%, their energy costs have more than doubled, even after Government support, and their business rates are up—a triple whammy. Those cost increases have not been met by an increase in the funding rate for so-called free places. Providers cannot afford to keep passing on the increasing cost of delivering high-quality childcare and education to parents. The Government need to see the huge cost to parents and the huge cost to providers as two sides of the same coin. It is creating a perfect storm, which is causing a crisis.

This crisis is not the fault of the childcare providers, who are working tirelessly up and down the country. It has been fuelled by 13 long years of a Conservative Government who have failed to act.

I thank my hon. Friend for bringing this important debate to Westminster Hall. I want to pick up her point about covid. Last year, research on the impact of the covid pandemic on early childhood education and care revealed that considerably more children from ethnic minority and disadvantaged backgrounds have missed out on formal early learning. It will surprise no one that, as a result, the inequality gap has widened, and the attainment gap is also likely to widen. Does my hon. Friend agree that, if we want this trend to be reversed—and I think everyone across the House does—the Government need to focus on ensuring that disadvantaged children have equity of access to quality early years education?

My hon. Friend is absolutely right: the inequality in the provision that does exist means there are stark differences within different communities and between families in different situations. The poorest and most disadvantaged children are the ones who need good-quality childcare from day one, as soon as they leave their parents. They need it more than anyone.

In low-income areas, providers are even less able to cross-subsidise free hours with fees, so there is a disproportionate loss of places in those areas. The poorest families are ineligible for the free 30 hours, and those families who are eligible face barriers to participation.

This is a hugely important debate, and I congratulate the hon. Member on securing it. In Scotland, we have the same issue in deprived areas. Recent figures uncovered by the Liberal Democrats show that only 43% of families who are entitled to the free childcare for two-year-olds are taking it up, specifically because of the problems she mentions. Should we be doing more to make families aware of the support available to them and of how they can get it, as well as improving that support?

The hon. Member makes an excellent point and anticipates what I was going to say. The provision for two-year-olds, which is specifically there for the most disadvantaged, is complex and difficult to apply for, so it is underused. The families who need it most are not getting it, so I thank the hon. Member for that point.

There is a simple problem here. For some families, having childcare is the difference between being able to work or not. What should those families do with a child that is perhaps between the ages of six months and two years when there is no support at all? A six-month-old baby could be left in a cupboard at work, I guess, if that is the logic behind this. By the time they are one year old and they are crawling and walking around, that is not feasible, yet the subsidies kick in only at two years old. It makes no sense at all.

My hon. Friend is absolutely right. I could not take my babies around to meetings and so on after about four months. At that point, I needed either not to attend and not to go to work or to make sure that they had childcare.

Research in this week’s Guardian shows that there are fewer places in less affluent parts of the country. The settings are also more likely to be lower quality.

If I might add to my hon. Friend’s point, one woman wrote to me saying that she is a high earner and that when she got pregnant she worked out she could just about afford to go back to work—until she discovered she was expecting twins. Because of the cost between six months and the two or three years when funded provision comes in, which would help her a bit, she was in a desperate state.

The cost to parents and providers is rising, the funding for the free entitlement does not cover providers’ costs, and the current system of Government support is complex and leaves many gaps. There is also a quality gap affecting less well-off areas and poorer families. This crisis has been fuelled by 13 long years of this Government not acting. Before I finish, I want to ask the Minister a few questions.

The hon. Lady is making a good speech and some fair points, particularly about the difficulty people from poorer backgrounds have in accessing childcare. If we look at costs internationally, the cost of childcare in the UK is among the highest—if not, the highest—in Europe and by many international comparators. The Government often talk about wanting to get people economically active and back into work, but unless we sort this issue out and people are properly supported to have access to childcare, many people will not be able to afford to work and may have to forgo their careers to take the most economically viable option: looking after their children at home.

Yes. The hon. Member makes an excellent point. Depending on how it is measured, the UK has the third highest or the highest childcare costs to parents in the OECD countries. I ask the Department and the Treasury to look at how and why different Governments do things differently. In particular, the Canadian Government have recognised the economic benefit of properly organised and funded childcare.

Here are my questions to the Minister. Do the Government understand the importance of good-quality, affordable childcare? Do they know the difference it makes to education outcomes, women remaining in the workforce, inequality, the cost of living and the economy? We are not sure whether the Government are considering extending the free childcare option to one and two-year-olds, so we look forward to hearing what the Minister says on that. If they do, will that scheme and the current ones be adequately funded to cover the cost of provision? Will any extension include funding the reopening of settings that have closed and reskilling the workforce, as the current staff and managers will have moved on to other jobs, as they are already doing?

In conclusion, it is clear that the childcare system is broken. For many parents, the current provision is neither affordable nor available. The Government do not always like international comparisons, but they have to be made. I look forward to hearing from my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes), who I know will set out in further detail the difference a Labour Government will make. We desperately need a change, because the current system is broken, and parents, providers and children are having to live with the consequences. Back in November, more than 15,000 people took part in the “March of the Mummies”. Surely they should not have to march again this November. Surely we can see some action, rather than yet more dither and delay.

I remind hon. Members that they should bob if they wish to be called. I call Justin Tomlinson.

It is a pleasure to speak in the latest debate on this subject. This is almost a weekly occurrence, which makes speech writing quite easy—we can just dust off our previous versions.

First, I want to put on record my tribute to my hon. Friend the Minister who, within days of being in post, was willing to visit the fantastic Imagination Childcare nursery to meet Becky Cruise—the owner—and her team, as well as my daughter, who loves every minute she spends there. She also attended a roundtable with a number of nursery providers—experts in the field—who were able to have a frank, candid and wide-ranging discussion. They were extremely grateful for how engaged the Minister was, and Councillor Jo Morris, who runs Playsteps and does a lot of national campaigning, has certainly felt empowered to feed in the challenges. And it is the challenges that I will focus on.

To provide balance to what I thought was a very good opening speech, let me offer a proviso about the 13 years of Conservative Government. During those 13 years we have doubled the money spent on childcare. We brought in and extended the provision of free childcare, which my eldest daughter now benefits from. There is more to do, but we have been transformational in supporting people. What a contrast to the nonsense and bureaucracy of the tax credit system, which was a true blocker to working parents, particularly working mothers, being able to fulfil their potential.

The big step forward on childcare provision was in part thanks to the Liberal Democrats in the coalition Government. Does the hon. Gentleman accept that, setting core schools funding aside, the Department for Education’s day-to-day spending, which includes early years, is set to be cut by £500 million under last November’s autumn statement? Does he not agree that, if early years funding sees that day-to-day spending cut, it will be very short-sighted and very damaging for families?

We are all passionate about early years funding; we would not be here supporting this debate if we were not. I pay tribute to a predecessor in the hon. Lady’s party, David Laws, who was Minister for schools and early years. He also made a productive visit to my constituency. He was meant to be there for about 30 minutes and he stayed for more than three hours; he had to send his officials home. He learned some really good lessons, particularly about the significant difference that childcare can make to development in those early years—a point that was made powerfully in the opening speech. If we are to prioritise an area, those early years make a genuine difference.

As I said, I need to raise the challenges. It is important to keep the Minister absolutely focused, as I know she is. We have lost 500 childcare settings since 2019, with 300 in the last year. The main challenge impacting capacity fundamentally comes down to the fact that the increase in the national living wage, which is above inflation year in, year out, outstrips the set funding given for the 15 and 30 hours, and that makes viability an increasing challenge for nurseries. While we all support the increase in the national living wage, we all want the Minister to be empowered by Treasury to increase the funding provided for the 15 and 30 hours to match the national living wage increase. Then nurseries can worry about whether or not they make a profit on the non-free provision. We have to make it sustainable, because if we continue to lose capacity within the system, that will be an obstacle to people either returning to work or extending their hours.

I know that the Government are looking at different ways to try to provide financial support for nurseries. I know they are looking at ratios. I do not support lowering or changing the ratios because of the impact on quality, and I do not think there is support from parents. From our roundtable, I know that aside from balancing the increases in the national living wage, the other issue is staff retention. If we increase the workload, we will speed up the process of people leaving, which in itself is counterproductive. However, I think we could look at the qualified staff ratios that are needed to be legally compliant with Ofsted. In some cases, people who are in training could be counted for that ratio as well as those who have completed their training, but with Ofsted still keeping an overall view of the quality within the setting. That could be used in either good or outstanding nurseries, which would help.

I know that the Minister is particularly interested in the anomaly around business rates, which we have discussed in previous debates. A nursery within a school setting does not pay business rates, but a stand-alone nursery—like the one the Minister visited, which was about 50 metres away from a school—is subject to business rates, which equate to around £100 a child. If that £100 went back into the childcare provision, it would make a huge difference.

I speak to my final point as a former disability Minister. Society’s awareness of additional needs for young people has increased significantly, which is good and welcome. This was also brought up in the roundtable. Nurseries are about not just putting on fun arts and crafts and play sessions, but providing social care and support for special educational needs and disabilities, parents, communication and language and mental health. We want them to do well with all those extra responsibilities. It is no easy thing for a Minister—every Minister feels that their area should be looked after by Treasury, but Treasury simply cannot say yes to everything. One thing the Minister could do is to make the case for ringfencing additional premiums for those areas; in some cases, that will mean cash. We also heard at the roundtable about the ability to get quick advice. We had one example where a nursery had to wait six months to get advice—a relatively basic piece of training that ultimately was potentially life-saving—which meant that a child had to miss out for six months, because the nursery could not risk taking that child on until the training had been given. The support is partly around the money, and partly around being able to quickly get the staff.

I would not swap this Minister for any other to lead this fight. I know that she is working extremely hard, and she will have our full support if she can unlock any of those challenges.

I remind right hon. and hon. Members that a number of people wish to speak. If they could keep within six minutes, that would be very helpful. I call Tim Farron.

It is a great pleasure to serve under your chairmanship, Ms Fovargue. I congratulate the hon. Member for Brentford and Isleworth (Ruth Cadbury) on introducing a really important debate; it is one that I, like all Members present, am passionate about. The hon. Lady made an excellent speech. I just want to say a few words—I will hopefully take less than six minutes—to contribute to the debate.

The Government’s position on childcare is clearly that the best way to tackle poverty is to have people in work, and therefore providing childcare is about making sure that people can work. It is also about the vital importance of early years, and how we develop young people from their earliest point so they can have the advantages that many would like in later life. I do not need to go into it now, but all the evidence suggests that the first two years of education are more important than any other part. Although it is about allowing people to go to work, it is not just that; it is about ensuring that every young person has the same chance in life, whether they are from a difficult background or a privileged one.

Looking at the stated objective of tackling poverty by getting people into work, and therefore allowing parents to work, the extremely high cost and limited availability of childcare is making work unaffordable for many people. I have a few examples from my constituency in the last week. A constituent who contacted me has a five-year-old and an 18-month-old. She is a teaching assistant and wants to return to work, but childcare for the 18-month-old is so expensive that there is simply no point. The childcare cost would be more than her wage. That speaks for many other people and their experiences, too.

Another mum got in touch with me, telling me that she spends more on childcare than she does on her mortgage. She calculated that she will spend about £63,000 on childcare for her two children before they go to school. That includes the 30 free hours and a couple of days a week covered by family. She works for the NHS, but she is considering leaving her job. Another constituent was a nurse at Westmorland General Hospital. She wanted to return to work after having her daughter, but her pay would not be enough to cover the childcare bill. She would earn less money if she returned to work. If we want people to be in work, childcare must be accessible and affordable.

The Government’s approach is hugely damaging for the families concerned and for the children who miss out, but their failure to keep up with the necessary funding is also massively damaging the providers. Good people who provide good childcare places are determined to meet all the requirements, ratios and everything else, and yet they are being hit. In a March 2022 survey of early years providers, 88% said that the funding they receive from the Government for free childcare provision does not cover the cost of delivering childcare places.

Thanks to the hard work of the Early Years Alliance, a freedom of information request in 2021 found out that the Department for Education had confessed that a funded place for three and four-year-olds would cost an average of £7.49 per hour. That was two years ago. The actual rate paid to providers was only £4.89. Even the Government know they are massively short-changing our providers, and therefore our children and their parents.

We have seen closures in my constituency and throughout the rest of Cumbria. In the last seven years, six childcare providers have closed down in Kendal alone, and we have a childcare provider suspended in Appleby. The consequences for people who are trying to work and for their children are enormous. The maximum monthly cap for the childcare element of welfare benefits has not risen since April 2016. If it had risen in line with consumer prices index inflation, which is the usual mechanism, the maximum childcare cost cap would be 22% higher than it is currently. That equates to £145 more per month for one child, and £249 more for two children.

I will make a few recommendations for the Government before I shut up and sit down. First, we could increase the child element of universal credit by at least £15 a week and abolish the benefit cap. We could offer free, high-quality childcare for every child aged two to four, and for children aged between nine and 24 months whose parents or guardians are in work 35 hours a week, 48 weeks a year. That will be in the Liberal Democrats’ manifesto. We could overhaul the annual uprating of benefit levels so that rates always keep pace with prices and living standards. Childcare support through universal credit needs to be paid up front, because that is what excludes so many people from making use of it.

We have heard that there is a cost incurred in funding childcare provision. Yes, there is, but by not doing so we incur a bigger cost. In my constituency, we have a limited workforce with a high average age, and yet we have huge demand for work, and lots of people are not able to be in the workforce simply because of this issue. For a variety of reasons, including this one, 63% of all employers in hospitality and tourism—the biggest employer in my constituency—were working below capacity last year because they could not find enough staff. There are other factors behind that, but one factor is that people desperately want to work and cannot afford to. Can we afford to cover the cost of decent childcare? I argue that we cannot afford not to.

It is a pleasure to serve under your chairmanship, Ms Fovargue. I have been talking about childcare and coming up with proposals for some time now, but I will try to find new things to talk about because the Minister is probably sick of hearing from me.

The childcare juggle is extremely stressful. It is not just about the day-to-day management of children and organising what is going to happen, but about costs, as we have heard today. We are in second mortgage territory for many families and it is not sustainable. I have not just been gabbing on about this; I have put some effort into trying to provide evidence for the Government to look at and have worked with the fantastic super-brains at Onward to come up with recommendations in a report. The top recommendations are: supporting parents through a new system of childcare credits and providing more flexibility and choice; considering early years, and especially thinking about what the Princess of Wales is so fantastically doing and bringing a focus to; front-loading child benefit payments; expanding family hubs; and introducing some provider-side reforms, including boosting childminder agencies.

It is difficult to try to work through all the complex reasons why we have some of the highest childcare costs in the world—if not the highest, behind only Japan. We have looked into various reasons. First, the level of public subsidy is fairly low. As a share of GDP, the UK spends 0.56% compared with 0.7% across the OECD. Secondly, we have an extremely complex system comprising eight separate schemes. It is confusing for parents, costly to administer and leads to irregular outcomes. Thirdly, the principal offer of 15 to 30 free hours is underfunded, as we have heard, which means either that providers are cross-subsidised by charging parents higher fees for extra hours or that they simply close the doors altogether.

The Government must be given credit for coming up with the scheme for free hours, and it is a tribute to them that people want to extend it into other areas. We can all agree that childcare support should kick in earlier. It is barking mad that parents have to wait until a child is three. The support should be there earlier if that is what the family chooses. I am cautious about expanding free hours schemes without fixing the existing scheme and making sure that the hours are funded properly. Unless the Government do both, I worry about that being sustainable for the childcare sector—we have heard about that from my hon. Friend the Member for North Swindon (Justin Tomlinson)—or for parents. We need something that they can rely on, and we need to make sure that it is fair for the taxpayer as well.

Together with Onward, I have proposed clear provider-side reforms to stimulate the childcare sector and make sure the early years experts have our full support and can motor ahead. If, as we expect, the UK finances are not exactly as we would want them to be at the spring Budget, I want to make sure the Chancellor of the Exchequer does not feel that childcare can be put in the “too expensive to tackle at all” box. There are options for him.

I am keen, as the Minister knows, to think about lots of different options for parents. It is fair that there is a lot of flexibility in the market, and we need to build in more flexibility and bring down costs. I have not previously raised in a debate the option of home child carers. I have made a strong case for stimulating the childminder market, because we have lost 50% of childminders in the last decade—the Minister knows my arguments on that—but home child carers are an interesting class. We take our children to a childminder’s house, but home child carers can come into our homes. They can work on a part-time basis, and they can do wraparound care. For people such as nurses, who work in shifts, it becomes a really good option.

I want to thank Rachel from Koru Kids, who is the most fantastic entrepreneur and a really great brain. She has recognised that there are Ofsted regulations and barriers to bringing more home child carers into the market, but when she goes out to the market and says, “Would you like to be one of these?” she is flooded with applicants. I believe that, working with Ofsted, we can make changes to the regulations that do not undermine children’s safety and security but that bring more home child carers into the market. I want the Minister to look closely at that, alongside my other proposals, and I am happy to provide her with a note on it.

Thank you for coming in at short notice to chair this debate, Ms Fovargue. It is hugely appreciated, I suspect, by the thousands, if not millions, of mums who are just fed up. Because we are: we are fed up. For generations, we have debated this issue in Parliament as though people are talking Klingon—as though it is something that is beyond our reach or our capacity to resolve. I think the dads are pretty fed up, too, because they are not getting to be with their kids. Outside this place, that is the norm: parents want to spend time with their children and find ways of working that allow them to do so. Our childcare system, unlike those in many other countries, militates against that.

There is no other area of public policy where we accept—nay, celebrate—the idea that there will be a struggle and a juggle. Nowhere else do we think that if people are not struggling and having a miserable time—unless they are incredibly wealthy and have multiple nannies and people to stay at home with them—they are doing it wrong. Let us change that; let us have a different debate in this place. Let us come together across political parties to say that is it not enough to keep talking about this and worrying about extra hours here and there. I agree with the hon. Member for Stroud (Siobhan Baillie) opposite that tinkering around the edges will not do. It is time for a fundamental rethink of how we do childcare in this country, not least because of the impact on children themselves. That was pointed out by my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury), who secured this debate, for which I thank her.

The very simple question we all need to ask ourselves is: at what age do we think children start learning? When I look at my 18 month-old son and what he can do with an iPad, I know that it is very early on. We invest in children because they are our future, and yet our system does not reflect that thinking. We cannot solve the cost of living crisis unless we solve the cost of childcare. As we know, multiple families are now spending more on childcare than on their rent or mortgages. The number of women in this country who are economically inactive because of caring responsibilities is increasing; it has risen by 53,000 in the last year alone. Those women cannot get the decent childcare they need to be able to make it work for their families, and the economic impact of having them out of work is felt by us all.

That is the argument we need to take to the Treasury. With the greatest respect to the Minister, who I have no doubt is doing that, I want to see Treasury Ministers here, explaining why we are not investing in economic infrastructure—because that is what childcare is. Just as good roads get people to work, so too does good childcare. Yet, too often, we act in this country as if the opposite is true; as though we are doing mums a favour by providing childcare, giving them a couple of hours to go to baby yoga, rather than recognising that it is about how families balance their different commitments.

That is why I encourage the Minister to support the amendment that is being supported by Conservative colleagues of hers in the Lords right now, to make sure that we treat childcare as infrastructure and that local authorities are able to invest in it. Over the last five years, only 0.06% of developer contributions have been spent on childcare—that is just £1 in every £1,167 spent —yet we all know that when we build new flats, we are going to bring in new families. What are we supposed to do with them?

I encourage the Minister to take up the point made by the hon. Member for Stroud about the eight separate schemes. Of course, there is money there that could be better spent. I think of the 1.4 million children who are eligible for 20% off their childcare via the tax system but for whom it is not claimed. I do not think that is just because the system itself is completely bonkers; it is because so many families who want the help the most cannot afford to stay in childcare to the point where it is subsidised.

Of course childcare should kick in when a child is born, so we need to reform our maternity provision, but we also need to look at provision for children from six months on. We need the system to be universal, because that is when it pays for itself. The evidence from other countries makes it incredibly clear that it can help more families to stay in work, and it can help more women to keep their career and keep their caring commitments.

Some 85% of providers of childcare in this country are operating at a loss. This is not an industry that needs us to tinker around the edges. It needs investment to get us to a point at which there is a return. There is no area of economic policy in which investing leads to saving so clearly as in childcare, yet in this country we still act as if it were an optional add-on to an economy that is already struggling with productivity issues.

The fact that there are 5,500 fewer providers than a couple of years ago attests to how the system is not working for anybody. It does not work for the industry: these wonderful people caring for our children are professionals, so we should value their professionalism rather than playing it down. It does not work for the mums and dads who are looking at astronomical costs. It does not work for our economy. It certainly does not work when we tinker around with ratios or when the Secretary of State for Work and Pensions sends a letter to women who are out of work, telling them they really ought to think about going back.

What works is investing early. The £2.8 billion that is sitting unused and unclaimed in the Treasury’s coffers, just for the tax-free childcare system, could be spent right now on childcare. It could be invested in getting early years right so that in the next five to 10 years we will have a universal system that matches those of our economic competitors.

I say thank you to Pregnant Then Screwed and Mother Pukka—to the people who have refused to let politicians take the issue off the agenda. During the pandemic, when we were patting parents on the back but investing in potholes, the message from those mums was, “Up with this we will no longer put.”

In my final 15 seconds, I want to let Ministers know that “This Mum Votes” is not just the name of a campaign; it is a statement of intent. If we do not get this right, mums and dads around this country will not forgive the political party that has yet again put childcare in the box marked “Too difficult to deal with”. Children who deserve the best future need us now to stop messing around and start investing.

It is a pleasure to serve under your chairmanship, Ms Fovargue. As my parliamentary neighbour in the borough of Wigan, you will be very familiar with some of the issues I will speak about. Some 514 members of the public in my constituency have signed the petition to extend the 30 hours of free childcare to one and two-year-olds. That does not surprise me, but it links to the contributions that a number of colleagues have made.

As some hon. Members may know, Leigh is one of the poorest seats in the country. The average wage is 20% lower than the national average, so for many people in my constituency—and I suspect in yours, Ms Fovargue—the exorbitant childcare costs simply make it sub-economic to go back to work. That leads not just to harm to families, but to economic harm. It should never be sub-economic to go back to work.

I do not have children myself, but I understand how important childcare is. I wish to speak very briefly and personally about my experience. My parents were both working farmers. Animals do not feed themselves, so farmers cannot just not go to work. I was lucky enough to go to a nursery in the village where I grew up; when I was not able to go to the nursery, I stayed with family members, including my grandmother and grandfather and my great-aunt and great-uncle. Those options are obviously not available to everyone.

Having grown up on a farm, I know that my parents often worked incredibly long hours and, at times of economic difficulty, for incredibly low wages. That is important to how we approach provision. The hon. Member for Walthamstow (Stella Creasy) made a salient point about considering childcare as part of infrastructure spending. I have made a broader point to my council about development in the borough: when we put in a large number of houses, we should make sure that provision is there. We do it for schools, so we should do it for nurseries and other childcare providers. Land is in great demand and property is expensive, so we cannot expect these things to just spring from the ether. We have to make provision, and it would be sensible to do it as we do for schools.

In terms of how we address this issue, there is a strong case for extending provision for low-income households. I am not necessarily convinced of the case for universality—it would be wrong to give a childcare subsidy to people on wages like ours—but we have a number of problems in respect of low-income households, because the current state of affairs means that it is, as I have said before, sub-economic to return to work. I hope the Minister will take a look at this issue and see whether we can find a way forward.

I thank the hon. Member for Brentford and Isleworth (Ruth Cadbury) for securing this debate. It has been an informative and timely debate that really ticks the boxes of many of our constituents, who want to see real change on this issue. As an active constituency MP, probably one of the issues on which working families lobby me the most is the cost of childcare and how prohibitive it makes it to get back into work, particularly for mums who have just had their baby.

I suppose my mantra for this debate would be that work must always pay. It is important that the Government make it pay for those who want to get back into or continue in the world of work following the birth of a child, yet across the UK people are opting out of work because it does not pay to work. Their monthly childcare bill cancels out their net pay or leaves them with an amount that makes it not really worth the effort to work.

I want to mention a couple of Northern Ireland specifics. In 2021, the average cost of a full-time childcare place was £170 per week, while it was £186 per week for a day nursery and £166 per week for a childminder. Day nursery costs as high as £245 per week were recorded, with a range of childminders costing up to £300 per week. However, the median gross weekly earnings for full-time employees were £575. The Minister will be able to do the maths: for an average family with two kids, what is left is not enough to provide even a basic standard of living for a family.

We all know that the situation has got worse and been made more difficult in the past 18 months because of inflation. Indeed, providers themselves are feeling the pressure because of the increased costs that are in some instances leaving their businesses unviable. The situation is not helped by the bureaucracy and red tape they face on a daily basis.

The figures I have cited come from a local charity that operates in Northern Ireland called Employers For Childcare, which does an immense amount of work lobbying on childcare and supporting us politicians with data to prove that dealing with this issue will help the long-term economics of the country.

The most recent Employers For Childcare report, from 2021, cited some personal examples that speak even more powerfully than the figures. Let me read a couple of short quotes:

“Both my husband and I work full time. My husband is on minimum wage and so his entire wage goes on childcare. It is unaffordable when you have no alternative support. I have sleepless nights worrying about the cost of childcare. It is soul destroying.”

Another respondent said:

“Childcare needs to be more affordable. I’m in a reasonably paid part-time job but I couldn’t afford to go full-time as 90% of my wage would go on child-care costs which is pointless. One parent (usually the mother) of most families has to work part-time as they can’t afford full-time childcare.”

Those testimonies raise serious questions, including about alternative support. Throughout the debate, hon. Members have mentioned the importance of grandparents taking up the mantle in the home and having to step in, as my own grandparents did on many occasions, yet they do not receive a benefit for that. My ask of the Government is to support grandparents in that role, so that they can provide that wraparound service for working parents. Grandparents Plus has some superb ideas about helping grandparents in that way.

In many cases, it is the female in the family unit who sacrifices her career progression to stay at home in order to reduce childcare costs. Is that fair? No, it is not, and it comes back to the key point that work must pay. As we search for equality of opportunity in the workplace, that issue must be addressed.

The Government say they are on the side of working families. The forthcoming Budget offers the Chancellor an opportunity to demonstrate that, and I call on him to increase the tax-free childcare allowance. That would not only make a significant difference to the household finances of families across the United Kingdom, but encourage more people back into the workforce. That would be particularly beneficial to our public services, such as schools and hospitals, where it is simply not affordable for a parent to work. It would be making work pay—and we know that the money is there to do it.

I will finish by saying that our childcare providers are superb. As I stand here today, my son is being looked after by his childminder—she is an absolute star. I am so thankful for the support childcare providers give us as working parents. It is time to make childcare work for working families, and actually make work pay.

It is a pleasure to serve under your chairship, Ms Fovargue.

It is worth mentioning that many of the MPs here—perhaps all of us—have children. In fact, many of us have quite young children. The hon. Member for Stroud (Siobhan Baillie) has had a baby since she became an MP, my hon. Friend the Member for Hampstead and Kilburn (Tulip Siddiq) has had at least two children while being an MP—[Interruption.] Of course, I could not forget my near neighbour, my hon. Friend the Member for Walthamstow (Stella Creasy)—I was just coming to her. I have seen a number of us, at different times, going through the Division Lobby holding small children. I believe that many MPs care about this issue, beyond any slogans or stories they have heard from their constituents; balancing being a good parent and giving your child the best start in life with representing up to 100,000 constituents, who often have far greater problems, is a real concern.

I think everyone in the House would agree that early years education is essential in supporting children’s development and ensuring that every child is given the best start in life. For many children, nursery is the most important source for learning vital social skills and understanding the world around them for the first time. The benefits for children starting their education of an early introduction to reading practice and letter recognition cannot be overstated. Children from disadvantaged backgrounds, including many in Ilford South, start falling behind their peers before they can even start school.

A decade of Government austerity and under-investment has allowed early years education and provision to fall by the wayside. Parents and carers of all descriptions have had to pick up the bill. The OECD says the UK now has the second highest childcare costs among leading economies. That is no good. We are also one of the most faltering G7 economies in terms of growth and the state of our economy.

Since 2010, over 1,300 Sure Start centres have been closed. In some areas, those centres have been slashed by 85%. All the while, the Government’s so-called free childcare offer is, in my view, desperately underfunded and excludes many of the most disadvantaged children from receiving the support they need. As a result, recent studies have found that parents are putting off having more children due to excessive childcare costs. Put simply, families have been priced out of having children.

Since the Conservatives took office, average nursery costs have increased by 44%. According to Pregnant Then Screwed, the financial burden of childcare has meant that 17% of parents have had to leave their job, and 62% say they work fewer hours because of childcare costs. As many hon. Members have said, it is primarily women who bear the brunt of those costs, which further increases the motherhood penalty and the gender pay gap.

Many parents with pre-school-aged children are now locked into what the TUC refers to as a Catch-22: as a result of the UK’s miserable statutory maternity pay, mothers face immense financial pressure to return to work early, leaving them to cope with those sky-high childcare fees. The current basic statutory maternity and parental pay rate equates to 47% of the national living wage. Statutory maternity pay was £151.97 in 2021-22—a £5-a-week real-terms fall since 2010-11. Parents are now forced to choose between staying at home to look after their children or working just to cover the exorbitant childcare costs, and that hits women, in particular, incredibly hard.

The impact on children of this failing system is also immense. Young children with complex needs require one-to-one support when they join settings, but they are often forced to wait months even to meet an occupational therapist, let alone to receive the dedicated support they require. Too often the nurseries I have spoken to have to fund that out of their already stretched budgets so they can put in place childcare for children with special educational needs and disadvantaged children. That poor access to good childcare is clearly a significant driver of inequality throughout a person’s life.

I recently spoke to Leah from Barney Bear’s Nursery in Ilford. She has three nurseries in my vicinity, and at least one in my constituency, which I have visited on a number of occasions. It is a brilliant childcare provider in my constituency. I talked to her about the current state of play in the sector, and she told me that she knows of three local nurseries that have been pushed to the brink of closure by the lack of sufficient increases in the hourly funding rate. Those Ilford nurseries cannot come close to covering their overheads or providing the quality of childcare that future generations deserve. She said:

“More and more nurseries are closing; it is a worrying time for nursery owners and staff…Our children are our future, and Early Years development is crucial…This Government need to do more! Help our nurseries thrive, provide free training, increase the funding rates, remove business rates, and bring back sure start centres.”

I hope the Minister will consider those things as we work together to tackle this problem.

The expected announcement on extending free childcare in the upcoming Budget is welcome, but without significant investment it will fail. Joeli Brearley, the CEO of Pregnant Then Screwed, said:

“The 30 hours ‘free’ scheme does not currently work for providers as it is knowingly underfunded by the Government. Providers must make up this shortfall by charging more for younger children.”

The massive staffing vacancies have to be addressed at a national level, and a national pay scale for childcare workers should be introduced. That is not an optional extra, as some in Government would have us believe. It has to be part of our national economic infrastructure.

Under the circumstances, it is a relief as well as pleasure to see you in the Chair, Ms Fovargue. I congratulate my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) on securing this important debate and on her excellent speech. The availability and affordability of childcare is a pressing issue for families right across our country.

I am grateful to all hon. Members who contributed to the debate. There has been a great deal of consensus. The hon. Member for North Swindon (Justin Tomlinson) highlighted the challenges facing families with children with special educational needs and disabilities in accessing childcare that is suitable for their needs. The hon. Member for Westmorland and Lonsdale (Tim Farron) highlighted the challenges in rural areas. The hon. Member for Stroud (Siobhan Baillie) pointed to the lack of subsidy for childcare for children under the age of two—a critical challenge for many families. My hon. Friend the Member for Walthamstow (Stella Creasy) spoke passionately about the need for fundamental reform of our childcare system.

The hon. Member for Leigh (James Grundy) highlighted the economic harm in his constituency caused by a lack of available affordable childcare. The hon. Member for Upper Bann (Carla Lockhart) highlighted the extortionate costs in her constituency. Finally, my hon. Friend the Member for Ilford South (Sam Tarry) highlighted the importance of high-quality early years education in closing the disadvantage gap for the poorest children.

Childcare is vital social and economic infrastructure. It helps parents to work, it delivers early education to the youngest children and it underpins the growth of our economy. However, under this Government we have seen the cost of childcare rise, increasing numbers of providers closing their doors and an increasingly complex funding system for parents to navigate, resulting in low take-up of both subsidised places for two-year-olds and tax-free childcare.

The UK has the most expensive childcare in the OECD. The latest release from Coram reports that the average cost of 25 hours a week in a nursery in England for a child under two is over £140. The average cost for the same amount of time with a childminder is over £124. The average cost for a child aged two and above is more than £135 at a nursery and £122 with a childminder. I emphasise that these costs are averages, so actual costs can be significantly higher, particularly in London.

Analysis by the TUC estimates that the cost of childcare for a child under the age of two has increased by £2,000 a year on average since 2010. A survey of 27,000 parents by Pregnant Then Screwed found that three in five reported that their childcare costs are now the same as, or more than, their domestic costs, rising to three in four for lone parents.

A recent survey by Mumsnet illustrates the extraordinary challenges faced by many parents, with almost 20% of respondents saying that they have given up work or are considering giving up work due to the costs of childcare. Also, 38% of respondents said they were working at home or considering working at home without childcare, and 43% said they could not afford the monthly costs of childcare without help from family, taking on debt or dipping into their savings. Finally, one in four resorted to informal arrangements, such as childcare swaps, to save money.

The Women’s Budget Group estimates that 1.7 million women are being held back from taking on more hours at work by the cost of childcare, and recent data from the Office for National Statistics has shown that for the first time in decades the number of women leaving the workforce to look after family members is increasing; it was up by 12.6% last year over the previous year. The unaffordability of childcare is also placing strain on grandparents, many more of whom are now giving up work or reducing their hours not simply to enjoy spending time with their grandchildren but effectively to step in to provide formalised childcare. The CBI agrees, stating that childcare in the UK is in crisis, which contributes to labour market shortages, exacerbates the cost of living crisis, dampens economic output, slows down social mobility and increases gender inequality.

The Government’s funding model is undoubtedly part of the problem. Parents can access help with childcare costs from a wide range of sources. The subsidy for two-year-olds is means-tested, but some of the subsidy for three and four-year-olds is applicable only to working households. Some funding is provided through the benefit system and some through the tax system. There is significant unclaimed funding for childcare because the system is so complicated and confusing for parents to navigate. The recent report on the issue by the Work and Pensions Committee highlights serious flaws with the universal credit childcare costs element, which in February 2022 was only claimed by 13% of potentially eligible families. The amount of funding claimed through tax-free childcare is far lower than the amount that was previously spent through childcare vouchers.

The system does not work for childcare providers either. The Government have admitted that they do not pay providers what it costs them to provide the so-called “free” two-year-old places and the places for three and four-year-olds. They have effectively created a cross-subsidy model for childcare, which is driving up the cost for parents of under-twos and leaves childcare providers struggling in areas of deprivation, where parents of very young children simply cannot afford to pay higher rates.

Providers are facing rising energy costs, wage bills and food costs, and many find it hard to recruit the staff they need. That led to a tsunami of nursery closures last year. During the summer term of 2022, from April to July, 65% more nurseries closed than in the same period in 2021. The situation is set to get far worse following the withdrawal of support for energy costs at the end of next month.

I pay tribute to everyone who works in childcare and early years education. They are highly skilled professionals to whom we entrust the most precious people in our lives, yet they are under-recognised for the work they do. Working with very young children should be a rewarding vocation and a lifelong career. It should offer staff the opportunity to develop expertise and specialisms, and to progress accordingly. Yet all too often, there is no opportunity for development or progression, and nurseries report that they end up competing with better-paid roles in retail or distribution.

The lack of workforce development contributes to a situation that is particularly challenging for parents of children with special educational needs and disabilities. A recent survey of parents with disabled children found that 87% of mothers could not work as much as they would like to because of a lack of suitable childcare. After nearly 13 years of Conservative Government, our childcare system is failing families, failing children, failing providers and failing our economy. It is holding back parents from succeeding and progressing at work.

What is the Government’s response to this situation, which is of such central importance to our economy and family life? Silence. There was not a singular mention in the Chancellor’s Budget statement in November of the affordability and availability of childcare. When parents, providers, the TUC and the CBI all agree, yet the Government continue to do nothing, it is the Government who are completely out of touch.

Labour recognises the fundamental importance of childcare to parents, children and our economy. We also recognise that childcare costs do not stop when a child starts school. That is why we have announced our plan to introduce fully funded breakfast clubs for every primary school in the country, supporting parents to work and helping to address food poverty. We will make sure that every child, wherever they are in the country, starts school ready to learn. We will address disadvantage and prevent it from becoming embedded for a lifetime.

Breakfast clubs are just the first step on the road. We are committed to building a childcare system that supports children and families from the end of parental leave until the end of primary school, as part of the vital infrastructure that underpins our economy. The Government must step up and act to deliver childcare that works for children—

This is a point of genuine interest, not a political point. Has Labour costed those policies? I am having lots of conversations with Ministers about this issue. I am really interested in the points that the hon. Member is putting forward, but I have not seen any costings, such as for full universal childcare from nine months. Have they put any numbers behind that?

I am grateful for that intervention in the last sentence of my speech. As I just said clearly, Labour’s announcement so far is our fully costed pledge to deliver free breakfast clubs to every primary school child in the country. At the moment, we are working through the substantial, comprehensive reforms that we will bring forward for the childcare system in due course. We are absolutely committed to not making pledges until we have done that work, and that work is ongoing.

As one contributor said this afternoon, this is work that we cannot afford not to do as a nation. Hon. Members can rest assured that Labour will deliver the comprehensive reform that is lacking from this Government.

On that point, I think the Minister is starting to talk about one of the challenges: where money has been set aside for childcare, but has not been spent. She spoke earlier about the not-100% take up from those who are entitled. Since the scheme began to give parents 20% off their childcare costs, an average of £2 billion to £3 billion a year has gone unclaimed. Given that it started in 2017, we are talking about a possible £17 billion that could go into tackling these challenges with the cost of childcare. Before she sits down, what conversations has the Minister had with the Treasury about getting our £17 billion of tax that parents have paid into the system back, so we can put it into paying those who care for our children properly?

I thank you again, Ms Fovargue, and I appreciate that you and Mr Davies have stepped into the Chair at short notice. We wish all the best to Sir Christopher and hope he is okay. I would like to finish by thanking the many people and organisations that have helped me and others in this debate with facts, research and the views of their members and others, which have contributed to our speeches: the Early Years Alliance, Coram, Women’s Budget Group, Pregnant Then Screwed, Marie Curie and Mumsnet. I also appreciate Angela Doidge-Nelson at Hounslow Council and the group of nursery managers in my constituency who have been so supportive of me and who have opened my eyes to the challenges in the sector ever since I was first elected. We have had a great number of excellent, thoughtful, insightful and factual speeches from many Members, many of whom were speaking of their own experiences. As my hon. Friend the Member for Ilford South (Sam Tarry) reminded us, many Members—mothers and fathers—have had children while Members of Parliament. I was a councillor and took my babies to council meetings.

I also want to acknowledge and appreciate childminders, as the hon. Member for Upper Bann (Carla Lockhart) did. My childminder is sadly no longer with us, as she died a few years ago. She was a rock to our family—the grandma around the corner, because my son’s grandparents were not local. We cannot forget childminders, and it is very worrying to hear that childminders are walking away from the profession at an even greater rate than nurseries are closing.

I still look forward to hearing from the Minister, in more detail, the answers to some of the questions raised today—particularly an acknowledgment that full funding, for any free places, must be there, because, otherwise, the system is imbalanced. We want to hear about what the Department and the Government are doing about the underspend that appears to be there. That is actually there because too many disadvantaged and low-income families are not applying. Why is that? We need to understand why that is, and we need the Government to address the complexity in the system, because otherwise too many children and parents will not benefit from it.

Question put and agreed to. 

Resolved,  

That this House has considered the affordability and availability of childcare.