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Child Care
6. Ms Oona King (Bethnal Green and Bow) (Lab): How much extra money he is making available for child care in the next spending review period. [164986]
The Paymaster General (Dawn Primarolo): The Government announced the 2004 spending review settlement for the Sure Start unit, which includes child care, in the Budget on 17 March. It allocated an additional £669 million in funding by 2007–08, compared with 2004–05. That is spending that the Opposition will cut.
Ms King : I thank my right hon. Friend for that reply. May I tell her, the Chancellor and the rest of the Treasury team that at a recent big conversation event on child care that I held in my constituency, the top priority that emerged was the need to encourage employers to provide more flexibility and family-friendly working? I know that the House of Commons will be unable to do that until the 23rd century or so, but if we could achieve it for the rest of the country in the next spending review, that would be fantastic. Will she also consider the fact that families eligible for tax credits lose eligibility for free school meals, which is a big symbolic problem for many in my constituency?
Dawn Primarolo: I am sure that the whole House will agree that more needs to be done to make sure that child care places are available through nursery education providers and employers. As my hon. Friend will know, the Government have announced the introduction from 2005 of a £50 a week voucher, which employers will be able to give to their employees, and a number of employers engaging in the debate acknowledge that that
will help them with training and retention. I encourage all Members to publicise the development to their employers and in their constituencies.My hon. Friend will also be interested to know that child care through tax credits is now worth £700 million a year. The idea of extending eligibility through registration schemes, so that more child care can be paid for through tax credits, is being developed by right hon. Friend the Minister for Children. We will discuss my hon. Friend's point about free school meals with the Secretary of State.
Mr. George Osborne (Tatton) (Con): The availability of affordable, high-quality child care is very important, not least to working mothers trying to balance the many pressures in their lives. Has the Paymaster General read the National Audit Office report that was published in February, which pointed out that half those mothers said that their ideal type of child care was a playgroup or a pre-school? Will she explain why, despite all the extra money that she has just talked about, the number of playgroup and pre-school places has fallen by 22 per cent. since Labour took office?
Dawn Primarolo: The hon. Gentleman has a bit of cheek raising questions about child care at the Dispatch Box, given that the Conservatives propose to spend less on it. I remind him that more than 920,000 new places have been created since 1997 as a direct result of this Government's policy, and there will be a further 300,000 places and 1,700 children's centres by 2008. He may be aware of the announcement by the Minister for Children that the Government have introduced free part-time early-years education for every three-year-old, six months in advance of our target. All those things have been achieved through this Government's policies, which Conservative Members tried to frustrate at every opportunity.
Ms Sally Keeble (Northampton, North) (Lab): I assure my right hon. Friend of the enormous support in my constituency for the progress that this Government have made in financing child care. Does she recognise, however, that more money is needed for the children's fund, which ran into difficulties this year, and that it is extremely important that funding be provided for contact centres? Will she consider providing extra funds for centres such as that at Headlands primary school in my constituency, where people can get before-school, after-school, pre-school and holiday care? People sign up for those centres when they are thinking of having a family. Women need such secure, high-quality child care schemes if they are to have real choices in life.
Dawn Primarolo: I congratulate my hon. Friend on her pursuit of the development of child care policies during her time in the House. I can reassure her in that, as I said, 1,700 children's centres are planned for 2008. In partnership with the extended schools initiative that my right hon. Friend the Minister for Children is developing, each centre will be a single place for five key services: early-years education, child care, health, family support and help into employment for parents. The intention is to provide a comprehensive service, not only developing the child's educational needs, but ensuring that parents are able to develop their potential, particularly to return to work.
Exports
7. Mr. Nigel Beard (Bexleyheath and Crayford) (Lab): What assessment he has made of the impact on United Kingdom exporters of the value of the pound against the dollar and levels of growth in the eurozone. [164987]
The Financial Secretary to the Treasury (Ruth Kelly): Export growth is expected to pick up significantly throughout 2004 and 2005. The lagged effects of sterling's weakening against the euro since 2002 and the expected pick up in euro area GDP growth are likely to boost UK exports to EU countries over the period ahead. UK exports are also being boosted by strong demand from the United States, albeit dampened by the recent weakness of the dollar.
Mr. Beard : I thank my hon. Friend for her reply. Does she agree that it is desirable for the UK to reduce its persistent deficit in traded goods? Does she view increased exports to China, India and south-east Asia as a means of augmenting our capacity to do so?
Ruth Kelly: My hon. Friend is right to point to the recent strong and rapid growth in far eastern countries, but the primary effect on export growth in the coming years is likely to be as a result of strengthening growth in the euro area and strong demand from the US economy. If he consults the Red Book, he will see that the Treasury has predicted that exports will pick up and grow from 5.25 to 5.5 per cent. this year to 6.75 to 7.25 per cent. next year.
Sir Peter Tapsell (Louth and Horncastle) (Con): Does the Chancellor have an exchange rate policy of his own, or is he happy for it to be decided by the Monetary Policy Committee?
Ruth Kelly: The hon. Gentleman should know that the best way to deliver a stable and competitive exchange rate over the medium term is to have a strong macro-economy, which is exactly what the Government have delivered.
Mr. Stephen McCabe (Birmingham, Hall Green) (Lab): What would be the effect on exporters of any recession engineered by reckless public spending cuts? Is that not exactly what the west midlands experienced in the early '80s?
Ruth Kelly: My hon. Friend might also like to consider what happened during the recession in the early 1990s. Clearly, the way to deliver a stable exchange rate is to deliver the lowest interest rates for 50 years, the lowest sustained level of inflation for 40 years and the highest level of employment that this country has seen since the 1970s.
Mortgage Regulation
8. Mr. David Kidney (Stafford) (Lab): What arrangements he has made for the transfer of responsibility for the regulation of mortgages from the Mortgage Code Compliance Board to the Financial Services Authority. [164988]
The Financial Secretary to the Treasury (Ruth Kelly): The Treasury, the Financial Services Authority and the Mortgage Code Compliance Board have worked closely together to achieve a seamless transition from the mortgage industry's voluntary arrangements to the new statutory regime.
Mr. Kidney : While others argued about whether and how there should be statutory regulation of mortgages, the industry got on with establishing voluntary regulation through the Mortgage Code Compliance Board, which had the good sense to locate its offices in Stafford. Does my hon. Friend agree that it is to the board's great credit that, in just three years, it has brought 67,000 mortgage professionals up to fully qualified status? Does she agree, as it prepares to pass the baton to the Financial Services Authority later this year, that the FSA's job will have been made so much easier as a result of the board's great work?
Ruth Kelly: My hon. Friend makes an excellent point. As he knows, FSA mortgage regulation will benefit millions of consumers by ensuring that they receive clear and comparable information and appropriate advice about mortgages. He points to the record of the Mortgage Code Compliance Board in raising standards, and it is right to pay tribute to its work in that regard. I believe that the board also managed to improve the reputation of the industry, as a result of which the FSA has said that it can grant due credit to the firms that have been in good standing with the MCCB.
Mr. Mark Field (Cities of London and Westminster) (Con): We all accept that there has been a certain level of regulation in respect of mortgages and other matters. The Financial Services Authority investigates a range of matters affecting the industry, and it is important to restore full consumer confidence in it. We have heard about the 67,000 people who have fully fledged qualifications to deal with mortgages, but does the Minister believe that the principle of caveat emptor has been ignored for too long and needs to be re-established more firmly in her negotiations with the FSA—on mortgages and, indeed, on other financial products?
Ruth Kelly: We are practically in a unique position on mortgage regulation. It was called for not merely by the Treasury and the FSA but by consumer associations and, indeed, the industry itself. I think that everyone agrees that mortgage regulation will benefit millions of consumers. The FSA has approached the matter in line with its statutory objectives, on the basis of a cost-benefit analysis, to introduce a process that will benefit everyone.
Mr. James Plaskitt (Warwick and Leamington) (Lab): My hon. Friend will know that the Treasury Committee has been looking into endowment mortgages and the mis-selling in the 1980s and 1990s that was unchecked by any appropriate regulation. We concluded that, despite FSA regulation,
- "buying any with-profits policy remains an 'act of faith' for consumers".
Ruth Kelly: We welcome the Treasury Committee's report on endowment mortgages. Mortgage regulation is an important component in restoring trust in the industry. Looking more broadly at endowment mortgages and other aspects of the financial services industry, people can have confidence that the FSA is one of the leading regulators in the field and that, as firms move to the realistic accounting regime this year and next year, they will become soundly capitalised. We can look forward to a future in which people really have trust and confidence in the financial services industry.
Mr. John McFall (Dumbarton) (Lab/Co-op): The regulation of the mortgage industry from October is a welcome step, but the Financial Secretary knows that the home reversion or equity release scheme is wholly unregulated. I am aware that the Treasury is holding a consultation exercise on that, but may I gently remind my hon. Friend to get a move on? There is an impending crisis in that field, and elderly people will be the most vulnerable in a market crying out for regulation. Will she take one step ahead of the game and ensure that such regulation is introduced timeously to tie in with the mortgage regulation starting in October?
Ruth Kelly: I congratulate my hon. Friend on his continued and sustained interest in an issue that I have discussed with him on several occasions. As he is aware, mortgage-based equity schemes can be, and are, regulated by the FSA. However, home reversion plans, which are not mortgage-based products, do not fall into the same category. When we first considered the issue, in November last year, we asked the industry for evidence of consumer detriment and it did not have sufficient to hand; so, aware of the risks involved in the selling of those products, we launched a formal consultation process to gather evidence. The consultation closed on 13 February, by which time more than 50 responses had been received. I am aware of the intense interest in the subject and I hope shortly to announce a decision on regulation in that field.
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