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Madam Speaker: With this, it will be convenient to discuss the following: New clause 2--Eligibility criteria for childcare tax credit--
'.--In respect of the childcare tax credit component of working families' tax credit and disabled person's tax credit the Treasury shall, before this Act comes into effect, publish eligibility criteria as to what constitutes qualifying expenditure on childcare and the conditions that must be fulfilled for a childminder to be registrable for this purpose.'.
New clause 3--Eligibility of relatives and guardians as childcare providers--
Government amendment No. 14.
The Paymaster General (Dawn Primarolo):
I beg to move, That the clause be read a Second time.
I am delighted to be able to move the new clause, which will extend the range of eligible child care for the child care tax credit. There was much discussion in Committee about the eligibility of child care and it is the subject of the other new clauses grouped with new clause 5.
The current rules on eligible child care focus almost entirely on child care for the under-eights, but we have raised the children's age limit to help with child care costs for children up to 14 years, in line with the national child care strategy, and to 16 years for disabled children.
There is little in the current rules to cater for child care for the older age group, whose needs are different from those of younger children. That older group need breakfast clubs, after-school clubs and holiday clubs. Such child care is increasingly available, but the clubs are no longer limited to those run by schools or on their premises, which is what the current rules envisage. They can be organised by commercial organisations or voluntary groups, by voluntary management committees of parents and teachers, or independently from any school. The diversity of the ways in which child care is provided for those older children means that there is currently no common feature that would distinguish the appropriate good-quality providers from the inappropriate ones.
The clause enables us to create such a category of good-quality providers. That category can then be used in the tax credit rules as a definition of eligible child care. The clause is the joint work of the Inland Revenue, which administers the tax credits, and the Department for Education and Employment, which is responsible for the regulation of child care in England; it was drawn up in consultation with the Scottish Office, the Welsh Office and the Northern Ireland Office, which are responsible for child care in their areas.
The clause enables the Secretary of State to set up a two-tier approval scheme. The Secretary of State would accredit appropriate organisations to administer an approval system for child care providers. The details of the scheme would be contained in regulations made by the Secretary of State, as would the criteria for organisations to become accredited so that they can be approved providers.
Subsection (1) sets out the general principle, purpose and limits of the clause. It enables the Secretary of State to make regulations for a scheme to establish a new category of child care provider, the costs of which would be taken into account in calculating the maximum working families tax credit and disabled persons tax credit.
Mrs. Jacqui Lait (Beckenham):
I am grateful to the hon. Lady and to the Government for taking up one of
Dawn Primarolo:
The hon. Lady asks a number of questions and I shall do my best to reply. If I miss one out, I shall be happy to give way to her again on this important matter.
The draft regulations will be available at about the same time as the clause is considered in detail in the other place; a memorandum is now available in the Vote Office. There will be an opportunity to comment on those draft regulations and we shall seek views, especially from the child care sector, and from others who have an interest in these matters, before the draft regulations are laid before the House.
Mr. John Bercow (Buckingham):
Will the right hon. Lady give way?
Dawn Primarolo:
If the hon. Gentleman can hold on, I shall finish answering the questions of the hon. Member for Beckenham (Mrs. Lait) and then give way to him.
The hon. Lady asked who the providers would be. We shall be looking to existing recognised child care providers. It would be invidious for me to give a long list, but one current provider is the Kids Club Network, which I shall talk about later in my speech. We shall require that such providers meet a quality threshold and there will be an assessment before accreditation is granted. The child care provider will have to fall within the definitions that I mentioned--for example, breakfast, after-school or holiday clubs. I hope that that has answered all the hon. Lady's questions.
Mr. Bercow:
Does the right hon. Lady agree that the regulations should be as succinct and intelligible as possible? If she does agree, will she take account of the fact that the president of the CBI, Sir Clive Thompson, has referred to the creeping paralysis of regulation currently afflicting this country? In the light of that statement, will she give a pledge to the House this afternoon that the final form of the regulations will be shorter than the 72 pages of the working time regulations and the 112 pages of the regulations relating to the implementation of the national minimum wage?
Dawn Primarolo:
I assure the hon. Gentleman that we will endeavour, through the consultation process, to ensure that the regulations are clear and precise and assist those who seek to provide this type of child care. As to the length of the regulations, I am sure he accepts that it is crucial that the quality of the providers is set at a high standard. The regulations must provide guidance in that area, and the providers will be assessed according to that criterion. We are talking about people who will care for children, and parents have a right to expect that tight provisions will apply.
We do not seek to write regulations that are of no use--that do not help people and do not achieve their objective. We intend to ensure, through consultation, that the regulations in this important area of child care are as clear as possible.
Mr. Steve Webb (Northavon):
We have just passed the money resolution that pays for the implementation of the new clause. As is the nature of such things, it provides a blank cheque. Can the Minister give the House an idea of the sorts of sums the Secretary of State might spend? How many clubs are we talking about--is it tens, hundreds or thousands? How much money will be spent on accrediting them?
Dawn Primarolo:
The hon. Gentleman is always keen to encourage Ministers to cite figures in the House. I do not wish to say that X number of organisations will qualify under the regulations. Many organisations may apply, but the test will be whether they reach the quality threshold. I cannot make an assessment of the numbers at this stage. However, child care provision in many sectors--for instance, Kids Club--is of a high standard, and I am sure that the number of accreditations will reflect demand.
The Secretary of State for Education and Employment will draft and lay before the House the final regulations governing assessment. An assessor appointed by the organisation seeking accreditation will undertake the assessment and then report to the Secretary of State. As to whether there will be any extra burden, I think it is fair to say that we are talking about tiny amounts of money.
Mrs. Lait:
I am sorry to pursue the right hon. Lady on this narrow point, but it is best to clarify the matter. Did she say that only current providers will be able to bid for accreditation? Will new firms that pass the quality threshold be able to enter the market?
Dawn Primarolo:
I do not wish to mislead the hon. Lady. It is a question whether a provider satisfies the assessor. Accreditation will not be limited only to current providers. I said earlier that there are a huge number of existing providers, but their accreditation is a matter for the assessor. That decision will be made on the basis of the quality threshold. The hon. Lady tried in Committee to ensure that payment for child care could not circulate within family units. Such arrangements should not be viewed as providing quality child care as defined in the eligibility criteria of the regulations.
'.--In respect of the childcare tax credit component of working families' tax credit and disabled person's tax credit, the Treasury shall publish guidelines as to whether a person who is
(a) the parent or relative of a child;
(b) has parental responsibility for a child; or
(c) is a foster parent of a child
may, for the purposes of this Act, qualify as a provider of eligible childcare for which relevant childcare charges are payable.'.
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