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Child Care Costs

2. Mr. Andrew Rosindell (Romford) (Con): What estimate he has made of the cost of his new proposals for supporting family child care costs. [205211]

The Chief Secretary to the Treasury (Mr. Paul Boateng): The proposals set out in the pre-Budget report for supporting family child care costs will cost an additional £400 million in 2006–07. The total additional cost from 2007–08 will be £600 million.

Mr. Rosindell: I thank the Minister for his response, but may I move from costs to benefits and ask him what advantage people earning up to £50,000 a year will receive from his new £50 employer voucher? This appears to be a case of one arm of the Treasury not talking to the other. Is it not true that people will lose out on tax credits and receive little or no benefit, or even be worse off?

Mr. Boateng: The benefits are real and practical across the income range, not least because of the £125 million transformation fund, which is designed to support capacity in the child care market. On the hon. Gentleman's constituency in particular, under Labour the Clockhouse lane early years centre stands to become a children's centre; under the Tories, were they ever to achieve office, it would be lost. That is the choice—between child care with Labour, or no child care with the Tories.

Mr. Peter Pike (Burnley) (Lab): Is it not wrong to look at this issue as simply one of cost? As a result of this positive policy, are there not benefits not only to families, but to the nation? Is it not negative to look at this issue in the manner adopted in the question?

Mr. Boateng: Having recently visited Burnley, I know that my hon. Friend takes a real interest in this issue, and he is absolutely right. This is not just about benefiting families and enabling them to choose how they balance work-life responsibilities; it is also about a flexible labour market and the benefits to the economy that come when all those who have the potential to contribute to it are involved in it. Child care should support that; under the Tories, it detracted from it.

Miss Julie Kirkbride (Bromsgrove) (Con): What plans does the Minister have to make his Government's child care plans more flexible for working mothers? While many mothers are happy to take their children to school early or leave them there late or with a child minder in another house, many other mothers will, because of their working pattern, want them looked after in their own homes. What is the Minister going to do to make the Government's plans more flexible?

Mr. Boateng: The plans are flexible and have been recognised as such by all the charities working in this sector. What has really introduced flexibility to the market—the facts speak for themselves—is that 525,000 child care places have been created as a result of
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this Government's policy since we came to office. The real flexibility is provided by having a child care policy. The Tories never had one and the result was an inflexible and rigid labour market and a lack of choice for hard-pressed, hard-working parents.

Children's Services

3. Linda Perham (Ilford, North) (Lab): What assessment he has made of the economic impact of the Government's planned investment in children's services and nursery education. [205212]

The Chancellor of the Exchequer (Mr. Gordon Brown): As a result of the pre-Budget report, investment in child care and nursery education, including Sure Start, will rise from £1.2 billion in 1997 to £4.5 billion in 2008, as we invest in the potential of every child to the long-term benefit of the whole economy.

Linda Perham: I thank my right hon. Friend for that answer and I look forward to having a Sure Start scheme in my constituency. I recently attended the launch, under the neighbourhood nursery initiative, of a new learning centre in Hainault in my constituency. Such a provision, which opens between 8 am and 6 pm, is particularly helpful to lone parents. Can the Chancellor explain how the investment that the Government are planning in under-fives services will impact on the participation of lone parents in the labour market and on Government targets for reducing child poverty?

Mr. Brown: The number of lone parents who are employed has risen from 45 to 55 per cent. or so over the last few years. We believe that there is considerable scope for that to continue to rise if adequate child care places as well as training are made available. That is why we made an offer in the pre-Budget report to 250,000 lone parents. If they take up the offer of jobs, they will receive an additional £40 a week allowance for a year—a £2,000 a year bonus for taking on a job.

The combination of the measures in the pre- Budget report, the additional help on maternity pay, the increased number of hours in nursery education, the growth of children centres—they should average about five per constituency by the time our programme is finished in 2010—as well as the wraparound school care that my hon. Friend talks about, under which schools are open from 8 am to 6 pm, all mean that the choices available to parents are immeasurably enhanced from where they were in 1997. At the same time, our children's benefits are attacking child poverty. I shall give my hon. Friend one more figure. In 1997, the child care tax credit went to 45,000 people; it now goes to almost 300,000. That shows how many more mothers have got more effective choices as a result of our policies.

Dr. Vincent Cable (Twickenham) (LD): I warmly welcome the increased investments in children's services and nursery education—so much so, that on these Benches we believe that it would be a far better use of taxpayers' money to spend £250 million on early-years provision, rather than on the Government's baby bond to provide cash for 18-year-olds to pay their student tuition fees. After yesterday, does the Chancellor accept that it is not just the Liberal Democrats who have
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doubts about the child trust fund? The City does, too, as the leading retail provider has now withdrawn all support for the fund. Is it not now inevitable that the Government will have to exercise their expensive default option?

Mr. Brown: It is a very weak-minded Liberal party that is put off the child trust fund just because one of many providers says that it will not be involved. Retail stores, assurance societies, insurance societies and friendly societies are all involved in the child trust fund. I just hope for the sake of children and the future of our country that the Liberal party reconsiders its ridiculous policy. According to the hon. Member for Yeovil (Mr. Laws), who I see in his place next to the Liberal shadow Chancellor,

This is a measure to encourage savings by all—it gives every child some assets and it ensures that we have a wealth-owning democracy as well as rising incomes for families. I just wish that the Liberal party would, at some point, support a sensible policy. The fact is that, because of the success of our economic policies, we can both expand child care and have a child trust fund, whereas the Opposition would cut public spending by £35 billion.

Angela Eagle (Wallasey) (Lab): May I congratulate my right hon. Friend on his concentration on child care as a way of providing opportunity for people? I welcome the opening of a Sure Start centre in the Seacombe ward in my constituency, which, even as we speak, is providing extremely effective help to 480 families. I look forward to another pioneering children's centre opening in Leasowe. Those two centres are transforming the lives and opportunities of many of my constituents. I, for one, welcome that.

Mr. Brown: I have visited many of the Sure Start centres around the country. What is really encouraging is not only the benefit provided for children, but the fact that parents who might feel isolated otherwise can meet at these centres. That benefits the children and the whole family life of the community. Increasingly, Sure Start centres are at the heart of every community. If we can have 3,500 of them by 2010—at an average of five per constituency—there will be a very great benefit to family life. However, it would be disastrous if we took the advice of the Liberal party to scrap the child trust fund, or of the Conservative party to scrap the Sure Start children's centres. What future do the Conservatives offer children in this country? None.

Mr. Paul Goodman (Wycombe) (Con): With reference to what the right hon. Gentleman has just said about children's centres, child care providers have to negotiate their way through 28 separate funding streams and application processes. Will he have a word with the Chancellor of the Duchy of Lancaster, who is responsible for co-ordinating Government policy, to ensure that that complex structure is simplified and that some of the barriers to child care supply can be torn down?
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Mr. Brown: This is indeed very interesting—the hon. Gentleman wants Sure Start centres in his constituency. I shall take up his suggestion and make it easier for him to have them, but he had better start talking to the shadow Chancellor, who wants to abolish Sure Start children's centres.

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