Derek Twigg (Halton) (Lab): In order to compete better globally, we need to do something about our productivity problems—a subject to which my right hon. Friend the Leader of the Opposition referred earlier. How does

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having so many people on low pay and in insecure jobs with falling living standards address that productivity problem?

The Prime Minister: We first need to recognise that this year has seen the largest fall in unemployment in Britain since records began, and it is a complete fiction to say that all those jobs are low paid. That is not the case. A lot of those jobs are in more skilled professions where the pay levels are higher. On productivity, it is of course an important challenge for the UK, but I would say that one hopeful sign is that the increase in business investment—a key component of GDP—has rapidly increased this year and it can lead to an increase in productivity.

Dr Julian Lewis (New Forest East) (Con): Would it not send a very bad signal to President Putin when he is eyeing up the Baltic states if Britain fell below the NATO recommended minimum of 2% of GDP going on defence? Will the Prime Minister give an undertaking not to do that as long as he is in office?

The Prime Minister: We have set out our plans for this Parliament, and we will have to set out our plans for the years ahead at the next election. As I said, we have maintained a £33 billion defence budget—one of the top five in the world. The most important message for the Baltic states is that they are full members of NATO. I think they are very grateful for that when they see the destabilisation that is taking place in other parts of the world. We need to guarantee to them that being full members of NATO means just that.

John Woodcock (Barrow and Furness) (Lab/Co-op): Does the need for these measures signal that the United Kingdom’s budget deficit will take even longer to clear?

The Prime Minister: We have set out our plans in Budget and autumn statements, we have cut the budget deficit by a third, and we will be setting out the figures later in the month in the normal way.

Martin Horwood (Cheltenham) (LD): The Inter-governmental Panel on Climate Change has warned of the terrifying prospect of global warming nearly 5° above pre-industrial levels, which would spell not just catastrophic but irreversible climate change. Will the Prime Minister play his part in ensuring that the third great economic bloc in the world, the European Union, is as committed as the United States and China to sealing a global climate change deal in Paris next year?

The Prime Minister: To be fair, I think that the European Union has been the leader in all this. We should note what Britain and other European countries are doing in terms of the commitment to reduce carbon emissions, and the fact that we have legal frameworks in place. There has just been an EU agreement on that. I think that we need other countries to come forward and put on the table measures such as those that we have already taken.

Alison McGovern (Wirral South) (Lab): Immediate action on the Ebola crisis is important. I know that the Prime Minister will join me in thanking the British people for their characteristic generosity, but may I press him

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on the medium and long-term response to the crisis? People need health services, so will he campaign globally for an international goal of universal health coverage?

The Prime Minister: The hon. Lady is absolutely right. As we look for a replacement for the millennium development goals, we should bear it in mind that health provision is key to that. We also need to recognise that the global response to Ebola was too slow. Ebola could have been put on a downward path much earlier if more effective action had been taken more swiftly. While I do not blame the World Health Organisation, I think that we need to look into what immediate resources are available so that we can get stuck into countries where these issues arise, and where there are no health services.

Mr Andrew Robathan (South Leicestershire) (Con): Following the Russian invasion of eastern Ukraine, it is important for the international community to carry a big stick and to be resolute, steadfast and very firm with Russia. It may be necessary to increase the sanctions rather than decreasing them. However, no one in the world wishes to see a new cold war. Is there any way in which my right hon. Friend and the international community can speak softly in pointing out to President Putin and, indeed, to the Russian people that the west is no threat to them, and bring Russia back into a more stable community, perhaps a community of nations? That is where we would all like to be.

The Prime Minister: My right hon. Friend is absolutely right. We—Britain and the European Union—do not seek a confrontational relationship with Russia. What we have set up with the EU-Russia discussions and the NATO-Russia Council is a way of having proper discussions and proper relationships with Russia. What has changed is Russian behaviour in Ukraine. I think that if Russia could genuinely do what it says that it wants to do—recognise that Ukraine is a single political space and should be respected, and that it does not want a frozen conflict—and if it could make those pledges real, we could have the relationship of which my right hon. Friend speaks.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): The Prime Minister seemed to be confident that the EU-US trade deal would not adversely affect the national health service, but there are some legitimate concerns. Will he be more precise about what has led him to be so certain that that will not happen?

The Prime Minister: What has led me to be so precise about this is the very clear statement by the EU Commissioner concerned that it is absolutely within our gift to leave parts of the public sector without these arrangements. I think that many people are raising concerns about the transatlantic trade and investment partnership which simply do not apply. I think that we, as elected politicians, should take on the arguments and deal with them one by one. Otherwise we shall face the risk of not receiving the benefits of TTIP, which could lead to growth and jobs in all our countries.

Craig Whittaker (Calder Valley) (Con): Given that nearly 20% of my working constituents work in manufacturing, and given our low unemployment rate of 1.8%, I think it is safe to say that Calder Valley is

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punching well above its weight in terms of helping the UK economy. How worried need we be about the current slowdown in the world economy?

The Prime Minister: Our economy is performing well. We have seen growth of 3% this year, a fall in unemployment, the establishment of more businesses, and good business investment figures. However, I think we should be concerned about the situation in the eurozone. According to the most recent statistics, in the third quarter of 2014 Italy’s economy shrank by 0.1%, Germany’s grew by just 0.1%, and the euro area as a whole grew by 0.2%. Those are very soft and worrying figures. We need to see not just the United States growing, but the European Union—which is one of the engines of the world economy—firing up properly.

Let me return to the issue of TTIP. It is notable that the former EU Trade Commissioner Karel De Gucht said this in a BBC interview:

“Public services…there is no problem about exemption. The argument is abused in your country for political reasons but it has no grounds.”

I think it is important that that has been said.

Ian Lucas (Wrexham) (Lab): If our economy is performing so well, why has the Budget deficit increased by over 10% during the course of the last year?

The Prime Minister: The Budget deficit has fallen. It has come down by a third since this Government came to office, and we will see the figures at the autumn statement in the normal way, but we should not forget what we inherited, which was a forecast for a Budget deficit at 11% of GDP. That was the highest of any country anywhere in the world. We will not forget that inheritance, and it is one we are dealing with.

Mr John Baron (Basildon and Billericay) (Con): Is not the danger with the policy of talking loudly but carrying a small stick that it eventually gets found out by the bullies in the playground?

The Prime Minister: I have great respect for my hon. Friend, but I just do not understand how it can be argued that a top five defence budget with £33 billion spent is not a big stick. The fact is we have some of the most capable armed forces anywhere in the world, and because of the difficult decisions we have taken we are going to see two new aircraft carriers, the new Type 45 destroyers coming out of our shipyards and the new global combat ship—the frigate. We have already got—based in my constituency—a superb fleet of the A400Ms now coming in to join the Voyager aircraft and all the Hercules we have. We have, of course, the joint strike fighters coming to back up our extraordinary Typhoon force. Britain has a full set of capabilities, including a nuclear deterrent, and I think that is absolutely right, and we should not talk down the scale of military commitment that we have; it is a very important part of our country.

Ms Margaret Ritchie (South Down) (SDLP): Given that the Prime Minister announced at the weekend that he wants to put rocket boosters under the TTIP agreement, will he give a clear yes or no answer as to whether, under the agreement, a state or devolved health service could be forced to pay for a private company under the investor state dispute mechanism?

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The Prime Minister: Again, on this issue of investor state dispute mechanisms, we have these in every single trade deal we have ever signed, and I think I am right in saying we have not lost a single case. Of course it is right that we debate all these issues but, as Members of Parliament we sometimes get a barrage of e-mails, that people have signed up to sometimes without fully understanding every part of what they are being asked to sign. People want to spread some fear about this thing, and I think we all have a role, as Members of Parliament, to try to explain properly why these things are good for our country.

Sir Edward Garnier (Harborough) (Con): As so many other economies are either faltering or declining and thus affecting our potential exports, will my right hon. Friend and the Chancellor of the Exchequer do all they can further to reduce business taxes in this country?

The Prime Minister: What we have said is that we want to maintain our ambition to have the lowest rate of business tax of the advanced industrial economies. We have achieved that under this Government through getting corporation tax down to 20% and I think that is a very good calling card for Britain in the world to get people to come and invest here. We have a 20% tax rate, but we do believe that it is important that companies pay their tax, so I think it is both a good advert for Britain, but also in the long term a good way of protecting and raising our revenue.

Fiona O'Donnell (East Lothian) (Lab): I am sure the Prime Minister agrees that we should judge the success of greater transparency in global taxation by how much it benefits those who need it the most—the poorest countries in the world. He said in his statement that £37 billion of extra tax was being paid by big companies. Can he now tell the House how much of that money has gone to developing countries?

The Prime Minister: I do not have those figures for the hon. Lady. They were figures produced by the OECD at the meeting, but she is completely right that if all that happens is that the richest countries of the world agree to exchange tax information with each other, that will help us but it will not help the poorest. That is why we have to get into these countries and help them build their tax authorities and their capacity. That is why we have not just proposals but actions like tax inspectors without borders where we actually put the capacity into other countries. I want them to benefit from the good work that is being done.

Mrs Cheryl Gillan (Chesham and Amersham) (Con): Against the background of an uneven and fragile global economic recovery, may I congratulate the Prime Minister on a successful G20? I was particularly pleased to see that the G20 leaders supported the World Bank Group’s infrastructure facility. Will he tell us what role the UK will play following the launch of the G20’s global infrastructure initiative and hub?

The Prime Minister: I think this hub can matter because an enormous number of huge infrastructure projects need to be built, particularly in the developing world. Those projects could have a transformational effect on those countries’ economies as well as helping

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us with our trade, but they often need pump-priming and guarantees in order to get going because they will not be financed solely by public sector banks or institutions. The hub will bring together the World Bank, the International Monetary Fund and regional investment banks such as the European Bank for Reconstruction and Development to try to get those projects going. British companies and British business will benefit from that, which is why I think this is an important part of global growth.

Sheila Gilmore (Edinburgh East) (Lab): A lot of people will like what the Prime Minister has said about TTIP and the health service, so what is his objection to incorporating an exemption in the treaty and campaigning with the other countries to ensure that that exemption happens?

The Prime Minister: As I said, these are all things that can be discussed and looked at. We should not be raising fears that our national health service is somehow going to be invaded when it is not. Let me quote the EU trade commissioner on this:

“Public services are always exempted—there is no problem about exemption. The argument is abused in your country for political reasons but it has no grounds.”

That is what was said on 13 September 2014.

Bob Stewart (Beckenham) (Con): President Putin has announced large increases in Russia’s armed forces in the past few weeks. As well as protesting about what has happened in Ukraine, did my right hon. Friend ask the G20 NATO members to stress to President Putin that hostile actions against any alliance member would be considered an act of aggression against all 28 members of the Atlantic alliance and possibly, as such, as an act of war, as per the NATO charter?

The Prime Minister: My hon. Friend knows these things well. President Putin is well aware that the NATO alliance has at its heart a clause on collective self-defence. That measure would be triggered if there were an attack on any NATO member. That is at the heart of our alliance, and it is obviously worth a huge amount to the Baltic states in terms of stability and security. This also shows how right we were to include those states in the NATO alliance.

Mr Frank Roy (Motherwell and Wishaw) (Lab): Will the Prime Minister confirm that the Government will donate £650 million to the green climate fund?

The Prime Minister: We will make funds available in the right way following a pledging conference, but we want to ensure that other countries put down their money. All too often in the past, Britain has put its money in first and wondered why no one else has contributed. I am clear that we want to see other countries stepping up to the plate.

Mr John Whittingdale (Maldon) (Con): Does my right hon. Friend accept not only that we are facing the threat of a further Russian military invasion of Ukraine but that we are in the middle of an information war?

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Will he consider what more can be done to counter the entirely false depiction of events in Ukraine that is being put out by the Russian media, both inside and outside Russia?

The Prime Minister: My hon. Friend is absolutely right. A number of leaders in the Baltic states have said how damaging it is that so much of their television consists of Russian-backed news channels pumping out a completely distorted picture of what is happening. It is vital that we play our part in putting forward correct and accurate information, and I have raised this issue with President Obama.

Diana Johnson (Kingston upon Hull North) (Lab): The current and former independent reviewers of counter-terrorism legislation are both calling for the relocation powers to be brought back. In the light of the Prime Minister’s announcement to the Australian Parliament, will he also make an announcement to this Parliament on this matter? Will the relocation powers that his Government scrapped be brought back—yes or no?

The Prime Minister: The hon. Lady will have to wait for the announcement of the anti-terrorism Bill, which, as I say, will be introduced in this House before the end of the month. But it is notable that the independent reviewer of terrorism legislation, David Anderson, has said:

“There is no need to put the clock back. The majority of the changes introduced by the TPIMs Act have civilised the control order system without making it less effective.”

That is important, and I think we should seek to proceed on the basis of consensus.

Richard Drax (South Dorset) (Con): May I congratulate my right hon. Friend on going to such a rough country without taking four warships with him? In all seriousness, Russia has stepped over a red line and the west is talking about sanctions. How long do we go on talking about sanctions? If they do not work, what does the west then do?

The Prime Minister: I do not believe that a military escalation is the answer to this problem. I think the answer to this problem is a robust, firm and united response from the countries of the European Union and from the United States to make it absolutely clear that if Russia persists in this destabilisation, its relationship with Europe, with Britain and with America, in terms of trade and normal contact, will be radically different in the future from what it has been in the past. I simply do not think that the idea that this cannot work or cannot have the effect is right; in the end, Russia needs the European Union and America more than America and the European Union need Russia. We need to make that relationship pay, and I think we can, therefore, get the right result.

Andrew Gwynne (Denton and Reddish) (Lab): As the Member responsible for introducing the Debt Relief (Developing Countries) Act 2010, I have a long-standing interest in tackling the vulture funds that prey on historical debts, often those of the poorest countries or countries in severe economic difficulty. Argentina is one of the latest being preyed upon and pursued. Will the Prime Minister set out for the House whether he fully supports

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the principles in the G20 statement on tackling this issue? Does it show a change in the UK’s position on vulture funds, after his Government voted against the United Nations resolution on sovereign debt restructuring earlier this year?

The Prime Minister: The hon. Gentleman raises a very important point, about which there was a long discussion at the G20. Of course I support what is in the communiqué—we fully agreed that. The problem we have is that there is sympathy for countries such as Argentina, which have tried to restructure their debt but then have vulture funds taking them to court in other countries and winning judgments that make it almost impossible for them to proceed and tip them into another technical default. The right position to take is not to override contract law and the way these things are dealt with in courts, because of course our whole system depends on that, but to try to find a workaround so that countries such as Argentina can get back on a proper footing.

Stephen Phillips (Sleaford and North Hykeham) (Con): If Ebola is going to be beaten, it will have to be beaten in west Africa. However, two things that provide a disincentive to medical professionals going and helping are the absence of direct flights and the imposition by some countries of quarantine requirements on asymptomatic patients. What discussions did my right hon. Friend have at the G20 with other countries on the re-establishment of direct flights and on quarantine requirements being based only on scientific fact?

The Prime Minister: My hon. and learned Friend makes an important point. On quarantine, we have said that countries should listen very carefully to their chief medical officers and follow medical advice. That is what we are doing here and we advise others to do the same, although, of course, different countries do have slightly different circumstances, because sometimes very long flights are involved. I do not think it is necessary to restore direct flights, for instance, between Britain and these countries. It is necessary for health workers to know that there will be both good facilities in country and medical evacuation available. That is what we have made available to our own health workers, and we are able to offer it to other health workers who take part in the facilities that we are providing.

Andy Sawford (Corby) (Lab/Co-op): Which Prime Minister showed up for the UK in the negotiations at the G20 on climate change—was it the Prime Minister who told the public that he wanted to hug a husky or the Prime Minister who tells his own right-wing Back Benchers that we ought to cut the “green crap”?

The Prime Minister: It was the Prime Minister who introduced the world’s first green investment bank, which is now being admired and potentially copied around the world; it was the Prime Minister who supported and helped to put on the table the legislation that made a big difference in this country and that is delivering cuts in carbon emission; and it was the Prime Minister who has restarted the nuclear programme, by going ahead with Hinkley Point C, after 13 years of a Labour Government who talked and talked about nuclear power but never did anything about it.

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Julian Smith (Skipton and Ripon) (Con): One myth about the trade deal with America is that it is a global stitch-up of big corporations. May I urge the Prime Minister to put his rocket boosters under the huge benefits of this deal for small and medium-sized businesses and for consumers?

The Prime Minister: My hon. Friend is right. Indeed, big businesses already have strong networks and lobbies in place to break into other markets, but it is the smaller businesses that we need to consider. When they look at whether they can export, they see all the difficulties and all the bureaucracy involved and sometimes decide against it. The transatlantic trade and investment partnership could make a particular difference to such enterprises.

Paul Flynn (Newport West) (Lab): In implementing the summit’s call, which said that developments in green energy will support economic growth, will the Prime Minister concentrate not so much on nuclear, which is always billions over budget and years late, but on the vast resources that this country has in wind, wave and tide. All are green, clean and eternal.

The Prime Minister: I think we should do both. We need a balanced energy policy that draws our energy from many different sources. I am proud of the fact that we have in Britain the largest offshore wind market of any country anywhere in the world. The rate of investment in green technology and green energy has increased under this Government. It is worth while looking at the proposals for Swansea, in which the hon. Gentleman takes an interest. There are opportunities in these green technologies, and if they can be made to pay, we should use them.

Mr David Nuttall (Bury North) (Con): Given Australia’s success in controlling immigration, did the Prime Minister pick up any useful tips?

The Prime Minister: I did discuss that issue with Tony Abbott, but Australia faces a rather different situation. Its focus has been on the problems of people potentially seeking asylum coming quite long distances across the Pacific ocean. Interestingly, if we look at immigration more generally, we see that there is quite a high level of immigration into Australia. Where there is real common ground is that both Britain and Australia can hold their heads high and say that we have created successful multi-racial democracies where people can come, make a home and a contribution and rise to the level that their talents allow.

Mr Andrew Love (Edmonton) (Lab/Co-op): Recognising the economic difficulties faced by the euro area as outlined by the Prime Minister, did he take the opportunity to speak to Mrs Merkel and other EU leaders on the matter? In particular, did he raise the possibility of a change of direction as recommended by the International Monetary Fund and other bodies?

The Prime Minister: There was a good discussion about what is happening in the eurozone. The European Central Bank is independent and cannot be given political direction in any way, but there is a growing global consensus that an active monetary policy is one part of a successful growth policy in the aftermath of a very

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severe crash and financial squeeze. The more widely that becomes understood, the easier it will be for the ECB to act.

Michael Ellis (Northampton North) (Con): It has been reported that there is a risk that money given to charities can end up in terrorists’ hands, helping them carry out their threats, some of which have been made clear recently. Will the Prime Minister ensure that the Charity Commission, which is led by the excellent William Shawcross, has the powers and resources that it needs to deal with that problem?

The Prime Minister: My hon. Friend is absolutely right to raise that matter. There is a problem with some organisations using their charitable status to support extremism or the extremist narrative. There are two things we need to do here, which we have been looking at through the extremist taskforce: one is to help organisations that might need to take on lawyers or legal advice to throw extremists out of their organisations; and the second is to ensure that the Charity Commission has the resources and the teeth that it needs, including possibly new legal powers, to take action, too.

Steve McCabe (Birmingham, Selly Oak) (Lab): If there is another global downturn, will the Prime Minister’s experience lead him to conclude that a fresh round of spending cuts is the best way forward?

The Prime Minister: One part of responding to these very difficult events is to ensure that one has a clear and sound fiscal policy, and that has involved making reductions in public spending. I think we should make it clear to members of the public that after the next election there will be further reductions in spending and that they need to happen as part of a long-term economic plan. We have started to set out the steps we are going to take, and it is important that we do so because the alternative of simply putting up taxes would destroy the recovery that is now gathering pace.

Mr Robin Walker (Worcester) (Con): I commend the Prime Minister’s leadership on international tax transparency and his earlier answer on the extractives industry transparency initiative. Let me draw his attention to the recent inquiry by the Business, Innovation and Skills Committee into the extractive industries, which found that the previous Government’s launch of the EITI but refusal to have Britain sign up to it discouraged many of the developing countries that would have benefited most from signing up. Since he has now reversed that policy and signed the UK up to the EITI, may I recommend that he take up the Select Committee’s recommendation that the UK should become a beacon of best practice and promote it using our soft power around the world?

The Prime Minister: I will certainly look at that report. I am convinced that it was the right thing to do. It is no good preaching to others about transparency unless we are prepared to put it in place ourselves, which is why I reversed the policy we inherited. Many countries have discovered mineral wealth but found it to be a curse rather than a blessing, and greater transparency

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is one of the key ways of ensuring that some of the poorest people can benefit from the resources their countries have.

Mr William Bain (Glasgow North East) (Lab): G20 countries have agreed to set out their post-2020 policies on climate change ahead of next year’s Paris conference on climate change. Does the Prime Minister agree that the UK’s position in leading that conference would be stronger if he adopted a 2030 energy decarbonisation target now?

The Prime Minister: I do not think that is necessary. We, along with the rest of the European Union, have adopted robust measures to cut carbon, but I believe that the right policy is to cut carbon at the lowest cost. Signing up to a complete decarbonisation target before we know that measures such as carbon capture and storage will work would be the height of irresponsibility, and politicians who propose this, like the hon. Gentleman, need to be honest with the public. If we cannot answer the question about where the cheap energy will come from, total decarbonisation will put money on people’s bills.

Stephen Barclay (North East Cambridgeshire) (Con): Foreign nationals who are major funders of terrorism are on the UK sanctions list, but the House of Commons Library has confirmed that they are not automatically on the UK travel ban list. Is the Prime Minister aware of any individual on the UK sanctions list having travelled to the UK during this Parliament?

The Prime Minister: I am not aware of any, but I shall have to go away and look carefully at the point my hon. Friend makes. He has been making a series of extremely worthwhile interventions on this subject. For instance, we should ensure that we act consistently with partners at the UN to list and put sanctions on individuals, but the point he makes about ensuring that the people we sanction are also on travel bans is very good, and I will look into it and write to him.

Mark Durkan (Foyle) (SDLP): Further to the Prime Minister’s point about the progress on corporate tax avoidance, he can acknowledge that many poor countries are unable to sign up for automatic exchange of information. Will his Government consider offering bilateral pilots to some of those countries, and will they also do a spill-over analysis, as requested by the OECD and carried out by the Irish and Dutch Governments, of the implications of the tax regime here for those poor countries? Would such an analysis consider the controlled foreign companies rules put in place by this Government, which are taking money away from poor Exchequers?

The Prime Minister: Where I would seek common cause with the hon. Gentleman is on the idea that poorer countries are often unable to take part in the tax exchange because they do not have the capacity to process the information and use it to raise funds. That is why initiatives such as tax inspectors without borders and putting resources into these countries to help with their tax regimes are important. I do not agree that what we have done to attract foreign companies is irresponsible. We charge our taxes properly, and it is good that some practices that were—let me put it this way—questionable,

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such as the so-called double Irish scheme, have been taken away. Low tax rates and the proper application of those tax rates are the prize we should be looking for.

Andrew Jones (Harrogate and Knaresborough) (Con): The easiest way for people to travel to or from our country to participate in terrorism is obviously by plane, so will my right hon. Friend explain what penalties airlines would face if they failed to comply with our measures, such as no-fly lists, which play a key role in keeping our country safe?

The Prime Minister: My hon. Friend makes a good point. The main penalty that airlines will face if they do not comply with no-fly lists, or with the screening and security measures that we insist on, is not being able to fly to the UK. It is not a series of fines that we are looking at, but a prohibition on their flights unless they meet these tougher criteria.

David Rutley (Macclesfield) (Con): What assessment has my right hon. Friend made of the UK’s readiness to face possible future international economic instability? How does it compare with the situation in 2008?

The Prime Minister: The point I would make is that to cope with instability, a country needs a long-term plan to get its deficit under control, and to live within its means. That is absolutely vital, and that is why the work that we have been doing for the last four and a half years, and will continue to do in the future, is so important.

Henry Smith (Crawley) (Con): In the past, I have fortunately been granted an Adjournment debate on G20 membership, in which I questioned the validity of Argentina’s membership of the organisation under the Kirchner regime. Did the Argentine representation at the Brisbane conference make any approaches to other members of the G20, or to the International Monetary Fund or the World Bank, for funding?

The Prime Minister: In terms of Argentine representation, Mrs Kirchner, the President, was not there because she is recovering from an operation. Argentina was represented

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by its Finance Minister. The only real discussion that Argentina proposed at the G20 was on the issue of vulture funds, the fact that decisions in US courts have triggered a technical default in Argentina, and its problems with these funds. That was the issue under discussion.

Mr Philip Hollobone (Kettering) (Con): ISIS is opposed to our way of life and hates everything that Britain stands for. Given that British jihadists are aiding and abetting the Queen’s enemies in Syria and Iraq, and that we have the appalling scenario of a British citizen beheading other British citizens and the citizens of our allies on international television, is it not time that we recognised that this is worse than murder or terrorism, and that British jihadists should be prosecuted for treason?

The Prime Minister: I absolutely agree with my hon. Friend: that sight, and the fact that people who were born, brought up, and educated in our country have been radicalised in this way and are murdering other British citizens in the deserts of Syria, makes me sick to the stomach. It is absolutely appalling that this is happening. It is not only the full force of the law that these people should face; they should also recognise that when they take up arms in this way in another country, they become enemies of the state. With our allies, we should do everything that we can to stop them carrying out their barbarity.

Mr Peter Bone (Wellingborough) (Con): I would like to thank the Prime Minister on behalf of the whole House, I am sure, for coming to update us. He must be a bit tired. I understand that President Putin, on the other hand, decided to leave the summit early on the grounds that he was tired and needed to catch up on his beauty sleep. Others say that he left because the Prime Minister stood up to him, and that, like most bullies, he ran away. Was President Putin looking tired at the summit?

The Prime Minister: I am not aware of exactly why President Putin left early, or what the circumstances were. My experience of these international meetings is that it is very important to stay right until the end, in case something gets agreed that you do not agree with.

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Avian Influenza

5.13 pm

The Secretary of State for Environment, Food and Rural Affairs (Elizabeth Truss): The chief veterinary officer has confirmed a case of avian flu at a duck breeding farm in east Yorkshire. We have taken immediate and robust action to control this outbreak and to prevent any potential spread of infection. My Department, which is responsible for animal and plant health, is working closely with Public Health England. which is responsible for human health, and the Food Standards Agency, which is responsible for food safety.

The Animal and Plant Health Agency laboratory at Weybridge—an internationally recognised avian influenza reference laboratory—has analysed samples from the farm and identified the presence of highly pathogenic H5 avian flu. They have ruled out H5N1, the virus that can cause severe disease in people who are infected through close contact with infected birds. Further tests are being run to identify the exact strain of the disease. Importantly, the chief medical officer and Public Health England have confirmed that the risk to public health is very low.

It is important to note that this disease is highly pathogenic for birds, but the Food Standards Agency has advised that avian flu does not pose a food safety risk. Protecting animal health is one of the top priorities for my Department and we have extensive and rigorous processes to identify and tackle disease outbreaks. As part of this approach I chair a monthly biosecurity meeting and have reinforced the importance of monitoring and planning for likely risk.

We have tried and tested procedures for dealing with such outbreaks and our experts immediately responded when suspicions of disease emerged. I would like to take a moment to update the House on the sequence of events over recent days and the steps we are taking. A possible case of a notifiable disease on the farm was reported by a private vet on the morning of Friday 14 November. A Government vet visited the premises that day and submitted samples to the Weybridge laboratory, and the premises were immediately placed under restriction.

A series of tests was undertaken during the weekend and testing confirmed the presence of notifiable H5 avian flu on Saturday evening. Further tests ruled out H5N1. As the test results were confirmed, the chief veterinary officer, Nigel Gibbens, called an amber emergency meeting to assess the situation, and as a result declared a disease outbreak. At that point the national disease control centre was established and the full operational response was initiated, including informing the public and notifying key industry bodies.

At the same time a 10 km restriction zone was imposed around the farm. This zone bans movements of all unlicensed poultry and products within the area. Bird gatherings such as shows and exhibitions are banned and game birds cannot be released. The 6,000 ducks on the farm where the disease has been identified are to be culled. Investigations are ongoing to discover the origin of the outbreak, including whether it is linked to recent cases found in the Netherlands and Germany. This is detailed work to ensure we have identified all possible sources of the outbreak. It is essential that anyone

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keeping poultry practises good biosecurity, is vigilant for any signs of disease and seeks prompt advice from their vet.

We are never complacent about such an important issue, and we have a strong track record of controlling and eliminating outbreaks of avian flu in the UK. We are working closely with operational partners, devolved Administration colleagues and the industry to deal effectively with this outbreak. I will keep the House updated on further developments. I commend this statement to the House.

5.18 pm

Maria Eagle (Garston and Halewood) (Lab): I thank the Secretary of State for an advance copy of her statement and, in particular, for the briefing I received from her officials this morning. She is right to bring the matter to the House at the earliest opportunity, and I commend her for doing so.

Avian flu is a serious contagious viral disease in animals with a potential for some strains to infect humans, with all the health implications of that. Fortunately, human infection is rare, and, thankfully, the Government have already confirmed that the strain of avian flu discovered in ducks on Nafferton farm in Yorkshire is not H5N1, which is one of the strains that impacts humans, though it is believed to be an H5 strain.

When is it likely that the Department will be able to confirm definitively what strain we are dealing with? The Secretary of State will know that outbreaks of H5N8 have been confirmed in Germany and Holland during the past two weeks. There may be some connection between these outbreaks, so what steps is she taking to ensure full co-operation between the veterinary authorities dealing with the outbreaks there, particularly if, in due course, it is confirmed that the outbreak she is dealing with is of the same serotype?

I understand that the authorities in the Netherlands have introduced a three-day nationwide ban on the transportation of poultry and eggs, yet, as I understand it from what the Secretary of State said, even in the 10 km restriction zone in place around the affected farm in Yorkshire, the measure she has announced bans movement of unlicensed poultry and products. Is she therefore allowing the movement of licensed poultry and poultry products? Will she give us a bit more information about what is and is not allowed within the zone? How sure is she that any potentially infected poultry has not been, and will not be, moved out of the zone prior to inspections, and that it will not enter the human food chain? What steps has she taken to ensure that there is no human exposure to the virus on Nafferton farm itself, either among farm staff or among the staff being sent to deal with the outbreak?

The Secretary of State does not yet quite know what the source of the outbreak is. Would not this information impact on what measures ought to be taken to contain it, and should she not therefore operate on the precautionary principle until she is clear what the strain is? There is clearly a possibility that the source is wild birds—a Royal Society for the Protection of Birds reserve is nearby. What steps is she taking to initiate sampling of wild bird populations? What is she doing to ensure that landowners and members of the public watch out for signs of the disease in such populations?

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The Secretary of State said that the birds on the farm are to be culled, but this has not happened yet. When is it to be done? For how long does she expect the restrictions she has announced to be in place if the outbreak is confined to just one farm? What is she doing to get information out to members of the public who keep a few chickens or ducks within the affected areas?

At this important time for the industry, and for consumers, what is her advice to consumers considering ordering their Christmas birds, whether ducks, geese or turkeys? We have heard that the FSA has been clear about this, but what is the Secretary of State’s advice? Does she expect trade impacts on exports to the European Union and around the world? What steps is her Department taking to help industry to deal with any concerns? We know from recent history that long and complex supply chains have the ability to accelerate the spread of food problems across international borders before being identified and tackled, so what assurance can she give to UK consumers that contaminated poultry and poultry products did not enter the European supply chain before this latest outbreak was identified?

Finally, can the Secretary of State assure us that she has all the necessary resources to prevent the spread of this disease, including the surveillance of wild birds and the testing, monitoring and culling of infected birds, and to enable any necessary communication with the industry and the wider public?

Elizabeth Truss: I thank the hon. Lady for her response. I am sure she will agree that very swift action has already been taken from the time of the original notification on Friday. We have already seen the testing taking place and the imposition of the restriction zone within which no movements are allowed.

On the hon. Lady’s specific question, people will be able to do that only if they are issued with a specific licence, and that will follow testing. We have set up a national control centre to deal with this disease. A local operation will be run out of Beverley to make sure that appropriate resources are put in place for surveillance in the local area.

We are taking this extremely seriously. One of my priorities as Secretary of State is to make sure that we are protected from animal and plant disease. One of the things we have done since 2010 is to protect the number of veterinary staff within our organisations to make sure that we have the resources to deal with disease outbreaks such as this. We have a good record, but we cannot be complacent. That is why earlier this year the Government released a new strategy on dealing with biosecurity risks and notifiable diseases.

The hon. Lady asked a number of questions. First, let us be clear that the Food Standards Agency has said that this does not pose a risk to food safety for UK consumers. That is a very important point. The chicken and turkey that people eat continue to be safe. This is a live animal disease. It is very important that we take steps to deal with it as soon as we are able, and that is what we have done. It poses a risk to the bird population, but it is an animal disease, not a human disease. I want to make that point very clearly.

The hon. Lady asked about protection for people working in farms in the area. As regards the risk to human health, we have put in place protections for the

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people on the farm that has been affected, and other local farms also have those protections in place. However, as I have said, the risk to human health is very low. That view has been supported not just by Public Health England but by the chief medical officer.

We are working with our European counterparts. Our organisation, APHA—the Animal and Plant Health Agency—is closely co-operating with those in the Netherlands and Germany to make sure that we are fully updated on what is happening.

We are at the early stages of examining what strain this is. We have ruled out H5N1 but we are looking closely at what strain it is. That is the work of the chief veterinary officer and we will know more in the coming days. Detailed work needs to be done so we are continuing to do that.

We have seen a good co-ordinated effort from all kinds of organisations, including the industry, the National Farmers Union, the police and the Animal and Plant Health Agency, and we need to keep that up to make sure we stamp out this disease. All the experience of animal disease shows that it is important to take early and swift action and make sure it is stamped out.

Sir Greg Knight (East Yorkshire) (Con): I am sure the whole House is grateful to the Minister for making this statement today. Will she confirm that resources will not be an issue, and that whatever needs to be done will be done to eradicate this outbreak? Does she agree that in due course there should be a review of what has happened so that lessons can be learned? Will she look at the question of compensation for those whose businesses have been adversely affected? For the present, will she confirm that no holidaymaker intending to come to the East Riding need change their plans, and that east Yorkshire remains open for business?

Elizabeth Truss: I can assure my right hon. Friend that east Yorkshire is most definitely open for business. The restrictions that we have put in place are specifically on the poultry industry. Compensation will be paid to farmers. We will do that in a robust fashion that is properly audited, learning lessons from previous disease outbreaks. My right hon. Friend is right that it is important that we see the value to the wider £210 billion rural economy. Food and farming are important, which is why we are dealing with this disease outbreak as quickly and as effectively as possible, but we must also see the wider benefits to the rural economy.

Ms Margaret Ritchie (South Down) (SDLP): I thank the Secretary of State for her statement. She referred to work with operational partners and devolved Administrations. Will she outline the nature of those discussions with devolved Administrations, particularly the Northern Ireland Executive, so that the local poultry industry in Northern Ireland can be protected and public health safeguarded?

Elizabeth Truss: I can assure the hon. Lady that we had a meeting today, which was part of our national disease control meetings, in which the Northern Ireland Executive were involved, as were the relevant authorities from Scotland and Wales. It is very important that we communicate properly with the devolved Administrations, and that is what we are doing, so they are fully involved in all our operations.

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Mr Graham Stuart (Beverley and Holderness) (Con): Many of my constituents work in egg production and poultry. Earlier today I was contacted by Elliott Eggs of Bewholme just outside the exclusion zone, which is already struggling to meet the supply demands of its supermarket customers. How will my right hon. Friend strike the balance between effective eradication of the problem and continued production, particularly in this festive season?

Elizabeth Truss: As my hon. Friend points out, the poultry and egg industry is a vital part of our food and farming sector, which contributes £100 billion to the economy. My answer to him is that the best way for us to do that is to deal with this as swiftly as possible and make sure that we eradicate the disease. That is why we have taken swift action. As I mentioned, the disease was notified to us on Friday. On that day Government vets visited the farm and an immediate restriction was placed on the farm. As soon as the analysis came back from the tests, the chief veterinary officer placed a restriction on a 10 km zone, so we are taking swift action to deal with the problem as soon as possible. All the previous disease outbreaks have shown that rapid, concerted, robust action needs to be taken.

Mrs Mary Glindon (North Tyneside) (Lab): The Secretary of State has said that the risk to public health is very low, but what discussions has she had with the Secretary of State for Health regarding the avian flu outbreak and this year’s winter flu jab campaign?

Elizabeth Truss: The chief veterinary officer and the chief medical officer have been working together very closely since the disease was identified. The chief medical officer and Public Health England have said that, based on the evidence they have received from the tests, there is a very low risk to public health. We will continue to work with those organisations.

Mr David Heath (Somerton and Frome) (LD): I congratulate my right hon. Friend on the swift, proportionate and comprehensive action she has taken, but warn again that the resilience and capacity of our animal health precautions must be protected against future depredation by the Treasury. Will my right hon. Friend look again at how she can get the message across to the backyard poultry keepers, who are the most difficult to reach—they do not read the trade newspapers or have veterinary supervision at all times—about the symptoms they should be looking for in their birds so that they can report them?

Elizabeth Truss: First, I agree with my hon. Friend about the importance of animal and plant health. That is one of my key priorities as Secretary of State. As I have said, we have protected the number of vets in our organisation, despite the fact that we have had to make savings across the Department for Environment, Food and Rural Affairs since 2010. As soon as we imposed the restriction zone, we put out the message in the media, as well as through many organisations such as the National Farmers Union and veterinary organisations. We want to get the message across to those members of the public who keep poultry that biosecurity measures are very important and that if they have any concerns they should speak to their vet.

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Andy Sawford (Corby) (Lab/Co-op): The Corby and east Northamptonshire food industry and farming industry, which is very significant, will be very concerned about the effects of this announcement on their already fragile industries, in the wake of events in recent years. On resources, the best thing to do is to focus tightly on the farm in question, as the Secretary of State has said. On the transportation of the carcases—she indicated that that will happen in 10 days’ time—will real precautions be taken regarding escorts and ensuring that the transportation is safe?

Elizabeth Truss: The hon. Gentleman is absolutely right. We are taking a very close interest in what is happening in the local area. That is why we have put in place an operating base in Beverley, very close to the local area, so that we can make sure that we deal with any issues there. The hon. Gentleman also makes a good point about the transportation of any culled ducks. We will make sure that they are properly protected so that we can dispose of them safely.

Miss Anne McIntosh (Thirsk and Malton) (Con): Bearing in mind that Yorkshire is one of the largest and most intensive poultry producers, may I commend my right hon. Friend, the veterinary service and, indeed, the responsible producers on the action they have taken? Mindful of the fact that the chief veterinary officer is on record as saying that the British case may be linked to European outbreaks or, alternatively, that it may be found in migratory birds, will the Secretary of State make it a top priority of all the services to find out the source of the infection? Will she also send out a clear message that British poultry is still safe to eat after the bird has been cooked and that, on biosecurity and those trying to cover the story, it is absolutely essential that those trying to contain this very infectious disease are given the right of access?

Elizabeth Truss: My hon. Friend is absolutely right to say that poultry is safe to eat. The Food Standards Agency has confirmed that avian flu does not pose a food safety risk for UK consumers. We are very clear about that message. My hon. Friend is also right to say that Yorkshire is a key county for food production. I recently visited Yorkshire to see many of the different aspects of food production there. We will make sure that people get the message about biosecurity so that we can ensure that proper protection is in place. Swift action is the most important aspect.

Mr Jim Cunningham (Coventry South) (Lab): What contingency plans does the Secretary of State have with regard to any threats to jobs in the supply chain?

Elizabeth Truss: The most immediate thing that we are focusing on—bear in mind that we were initially notified about the issue on Friday—is trying to nip the disease in the bud to make sure that it has the minimum possible impact. That is why it is important to take very urgent action.

Mr David Davis (Haltemprice and Howden) (Con): From what the Secretary of State says, the responses of the farmer, the vet and the agencies were exemplary in both their swiftness and decisiveness. The suggestion that this outbreak has come from wild bird infection

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reminds us that east Yorkshire is part of a migratory network, as is much of the rest of the United Kingdom. What will she do to ensure that there is clear surveillance of areas subject to bird migration so that this cannot happen again?

Elizabeth Truss: My right hon. Friend is absolutely right. That is one of the possibilities that the chief veterinary officer is exploring. He is meeting the ornithological expert panel to look specifically at the migratory patterns of wild birds, which might be one of the factors. It is still early days, and we do not fully know the cause. His job is to investigate that, and he is working very hard on it.

Andrew Jones (Harrogate and Knaresborough) (Con): Industry support and vigilance will be key to any success in implementing the restrictions, so what discussions is the Secretary of State’s Department having with trade bodies such as the NFU, the British Egg Industry Council or the British Poultry Council?

Elizabeth Truss: The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Camborne and Redruth (George Eustice), who has responsibility for farming, has spoken to the British Poultry Council and the British Egg Industry Council, and I have spoken to the NFU. Those organisations are represented in our national disease control centre to ensure full industry inclusion in what we are doing and to ensure we can get our messages across properly.

Julian Sturdy (York Outer) (Con): We are entering a very important time of the year for the poultry industry. What will the Secretary of State continue to do with her DEFRA colleagues to get out the strong message that although we have to tackle the outbreak head-on, poultry and eggs are still perfectly safe to eat? We still have the best animal welfare in this country, and such strong animal welfare will help us in tackling this disease.

Elizabeth Truss: My hon. Friend is absolutely right that this outbreak does not pose a food safety risk for UK consumers. The Food Standards Agency has been absolutely clear about that. We have very high welfare standards in this country, and we have a successful, competitive poultry industry. We are being very open and taking firm and decisive action so that we can stamp the disease out in the early stages.

Roger Williams (Brecon and Radnorshire) (LD): I congratulate the Secretary of State and DEFRA on maintaining the reference laboratory at Weybridge, which meant that she could very rapidly rule out the possibility that the H5N1 strain was responsible. What role will Weybridge continue to play in a worldwide observatory on this important disease? Knowing where each strain is active may help in fighting the disease in future.

Elizabeth Truss: My hon. Friend is absolutely right to say that our facilities at Weybridge are world class. We have world-class experts on avian influenza, which is very important in being able to deal with this disease. They are discussing the outbreak with their counterparts in other countries, because there have been outbreaks elsewhere. At this stage, we do not know what the

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connection is with the outbreak in east Yorkshire. He is absolutely right that that vital facility is an important part of our armoury in dealing with animal disease.

Julian Smith (Skipton and Ripon) (Con): The vet who turned up to the farm on Friday was clearly on the ball, and dealt with this outbreak efficiently and quickly. What more can we and the Department do to help the veterinary profession to ensure that everyone who goes out to farms is looking out for the symptoms of this disease?

Elizabeth Truss: The chief veterinary officer has been very active in working with the veterinary profession and the British Veterinary Association to make sure that we get such messages across. A lot of information is available on our website for people to access. Getting the message across is very important, and vets have a very important role to play.

Craig Whittaker (Calder Valley) (Con): Calder Valley has many smallholdings, as the Secretary of State knows. What advice would she give to smallholders about who would be the first point of contact if they suspect a problem in the coming weeks?

Elizabeth Truss: My hon. Friend is right: there are many smallholders, not just in Calder Valley but right across the country, and if people have concerns or suspicions, they should speak to their vet. That is the best course of action.

Mike Crockart (Edinburgh West) (LD): While public health is rightly uppermost in our minds at the moment, this is, as my right hon. Friend has said, a live poultry disease. Live poultry exports are worth a significant proportion of the £3.3 billion that poultry generates for UK GDP. Has she made any further progress in including the concept of compartmentalisation and export health certificates, and negotiated with our export markets to protect this valuable industry?

Elizabeth Truss: The most important thing we can do to protect exports is ensure that we deal with the disease as swiftly and robustly as possible. That is what will help protect our export markets, which, as my hon. Friend rightly says, are very important—indeed, we are looking to expand them.

Mrs Cheryl Gillan (Chesham and Amersham) (Con): May I also congratulate the Secretary of State and her team on taking swift and decisive action in what is potentially a difficult situation? This is the busiest season, and in Chesham and Amersham there are some marvellous Aylesbury duck breeders who also produce excellent turkeys for the Christmas season. Can the Secretary of State assure me that she will put out regular bulletins and information—perhaps even send them to Members who have raised questions in the House—so that we can get those across to our constituents? Will she do absolutely everything to maintain consumer confidence at this critical time for many businesses across the country?

Elizabeth Truss: We are working closely with the Department of Health, which is represented in the Chamber this afternoon, as well as with the Food Standards Agency and Public Health England, to get the message

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across to consumers that there is no food safety risk to British poultry. My right hon. Friend is right to say that this industry is important. That is why it is important to be open about the disease and the way we are dealing with it, and to take swift, effective action.

Dr Matthew Offord (Hendon) (Con): Given the proximity of the wild bird sanctuary to the area of contamination, does the Secretary of State feel that the exclusion zone of six miles is enough?

Elizabeth Truss: I thank my hon. Friend for the question about the exclusion zone. Earlier this year our Department set out a biosecurity strategy on notifiable diseases, and the 10 km exclusion zone was deemed to be a reasonable level to deliver the right amount of protection. The chief veterinary officer will be carrying out further work and investigating how the disease emerged, and following that work he will continue to work on our policy.

Bob Stewart (Beckenham) (Con): Further to the question from my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), may I ask the Secretary of State whether local birds such as robins, sparrows, thrushes and blackbirds could carry avian flu away from the area?

Elizabeth Truss: The chief veterinary officer has been clear that we do not know the precise causes of the disease and where it has emerged from, and we will be undertaking that work over the coming weeks.

Mr Philip Hollobone (Kettering) (Con): I understand from the statement that this case was found on a duck breeding farm. Do we know whether it was a duck or ducks that were affected, as opposed to some other form of poultry? As the Secretary of State addresses the House, is it the case that no recorded cases of avian flu in either a chicken or a turkey have been presented to her?

Elizabeth Truss: My understanding and the advice I have received from the chief veterinary officer is that only ducks were affected in this case.

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Points of Order

5.44 pm

Margot James (Stourbridge) (Con): On a point of order, Madam Deputy Speaker. Is it in order for a Labour MP to have joked about appalling death threats made against a female MP on Remembrance Sunday? Would it be in order for that colleague to come to the House immediately and apologise to you, Madam Deputy Speaker, and also to the Minister for Employment, my right hon. Friend the Member for Wirral West (Esther McVey)?

Madam Deputy Speaker (Dame Dawn Primarolo): I am sure that the hon. Lady will have notified the hon. Member to whom she is referring. As she knows—difficult as it is to chair the Chamber—the Chair is not responsible for what Members say outside this place or for interpreting the spirit in which any comment may have been made. For that I am grateful, given the point that the hon. Lady has made.

John McDonnell (Hayes and Harlington) (Lab): Further to that point of order, Madam Deputy Speaker—

Madam Deputy Speaker: Order. I have not finished, Mr McDonnell.

I was going to suggest that perhaps such matters are better sorted out between Members over a cup of tea, but I understand that we now have another point of order. I hope that your point of order is further to this point of order, Mr McDonnell.

John McDonnell: Further to that point of order, Madam Deputy Speaker. May I thank the hon. Member for Stourbridge (Margot James) for notifying me that she intended to raise this matter today? I thank her for raising it as it allows me the opportunity to put the matter straight. Various allegations have been made. Let me make it clear: I have never called for any harm to be done to any Member of this House or anyone else. I have reported statements that were made at a public meeting in the Wirral constituency. I did not agree with them, but I reported them.

I have no doubt that the hon. Lady is sincere in this, but she should be aware that what we witnessed last week was a choreographed exercise between the Daily Mail and Conservative central office to take a remark I made on the Sunday and publish it on the Thursday in order to detract from the speech made by the leader of the Labour party. If the hon. Lady is concerned, as I am, about women’s issues, she should join me in voting against the closure of women’s refuges and the charges—[Interruption.]

Madam Deputy Speaker: Order. I think that proves my point. Remarks made outside the Chamber should be settled between Members: it is not a matter for this House—

John McDonnell: Further to that point of order—

Madam Deputy Speaker: Order. I have not finished speaking yet, Mr McDonnell. As far as I am concerned, that closes the matter. The two Members should sort it out themselves: it is not a matter for me.

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John McDonnell: On a point of order, Madam Deputy Speaker. I just want to say that I am happy with the recommendation to have a cup of tea.

Madam Deputy Speaker: The hon. Gentleman has made an offer, but whether the hon. Lady wants to take it up must be between them. We must move on because it is not for the Chair to referee between Members outside the Chamber.

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Childcare Payments Bill

Consideration of Bill, as amended in the Public Bill Committee

New Clause 1

Proposals relating to three and four year olds

‘(1) The Chancellor of the Exchequer shall within three months of this Act coming into force lay a report before the House of Commons setting out—

(a) an assessment of the benefits of top-up payments to people responsible for a child or children aged three to four years since the Act came into force; and

(b) an assessment of those benefits in addition to the likely benefits of funding 25 hours per week free childcare for working persons responsible for a child or children aged three and four.”—(Catherine McKinnell.)

Brought up, and read the First time.

5.48 pm

Catherine McKinnell (Newcastle upon Tyne North) (Lab): I beg to move, That the clause be read a Second time.

Madam Deputy Speaker: With this it will be convenient to discuss the following:

Amendment 2 in clause 1, page 2, line 4, at end insert—

‘( ) The amount of the top-up payment is 66.66 per cent. of the amount of the qualifying payment where the qualifying child is a disabled child.”

Amendment 1 in clause 14, page 8, line 42, at end add—

‘(3) A child is a qualifying child for the purposes of the Act until the last day of the week in which falls on the 1 September following the child’s eleventh birthday (or eighteenth birthday in the case of a disabled child).”

Catherine McKinnell: New clause 1 stands in my name and that of my hon. Friend the Member for Wirral South (Alison McGovern), whom I wish to congratulate on her new role. It calls on the Government to consider the necessary help that hundreds of thousands of parents of three to four-year-olds need now to cover the ever-rising costs of child care.

Before I elaborate on the new clause further, I wish to reiterate a point that the Opposition have stressed throughout proceedings on the Bill. We welcome any new investment in child care and, in particular, any extra support for hard-pressed parents and families up and down the country who are struggling to juggle work and family life. That is worth remembering because, after all, we are the party which, in government, pioneered investment in early years. The principle that every child matters was at the centre of the Labour Government’s work across all Departments. We are the party that, in government, made no apology for focusing our efforts on, and redirecting any available support to, the children and families who needed our help the most. We are the party that, in government, made it its business to tackle disadvantage and to improve the life chances of every single child from the earliest possible age to give them the best possible start in life.

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Andy Sawford (Corby) (Lab/Co-op): I agree with the case my hon. Friend is making. Does she share my concern about the closure across the country of Sure Start centres, which were a key part of that commitment to supporting children and families, including the Raunds Sure Start centre in my constituency, which the Tory county council is now going to close?

Catherine McKinnell: My hon. Friend makes a very valuable point and I was just about to come to that. We are the party of Sure Start and the thousands of Sure Start centres that existed in 2010. It is not specifically relevant to this debate, but we could not allow it to pass without mentioning the very deep concern up and down the country about the future of our Sure Start centres.

There are concerns, which were made abundantly clear by a number of witnesses in Committee last month, that the Bill does not go anywhere near far enough to provide the support that thousands of parents and families desperately need right now. They need that support now, not in 12 months’ time, which is why we tabled new clause 1. Based on the Family and Childcare Trust’s annual survey, we know that child care costs have risen five times faster than wages since 2010, at a time when wages have lagged behind prices, leaving people £1,600 a year worse off on average. This support is even more vital when we see how much parents have lost out as a result of the Government’s choices: the decisions to cut tax credits, child benefit and maternity pay, and to close thousands of Sure Start centres.

As we saw and read in the news yesterday, research from the London School of Economics and the Institute for Social and Economic Research at the university of Essex shows clearly how the burden of austerity under this Government has fallen most heavily on those with lower incomes. The research found that the Government’s tax and benefit changes have seen the poorest lose about 3% of their incomes, while the richest half of the country have actually seen their incomes increase by 1% to 2%. That blows away the Government’s claims from the start that we are somehow all in this together. The research highlighted the fact that families with children have fared worst of all, which confirms our worst fears. Single parent families, in particular, have lost far more through cuts to tax credits and other support than they may have gained through any tax changes, proving that the Government have given with one hand but taken away far more with the other—so much for being the most family-friendly country. Families have lost out on up to £1,500 a year due to changes to tax credits alone. Tax credits are a vital part of income for many working parents, especially those on the most modest incomes.

When we look at all the tax and benefit changes since 2010, including the Government’s much-lauded and touted personal allowance increases, we see that families have clearly been hit hardest of all, and that will remain the case right up to the general election. A family with both parents in work will be about £2,073 a year worse off and a family with a single parent in work will be about £1,300 a year worse off. Despite the Conservatives’ claim of creating the most family-friendly country and the Liberal Democrats’ supposed belief that families should get the support they need to thrive, the Government have not been family-friendly and they have not stepped in to provide families with the help they so desperately need to get to grips with the soaring costs of child care.

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Far from stepping in, they have pulled the rug from under the feet of many families. Any extra help for parents struggling with the cost of child care is clearly to be welcomed. However, not only is the Bill too little too late for hundreds of thousands of families, we are disappointed that the Government have so far refused to consider that additional support could be offered to families right now. That is why we have tabled new clause 1.

Mr Jim Cunningham (Coventry South) (Lab): Does my hon. Friend agree that we can see the Government’s attitude to child care with their closure of more than 400 Sure Start centres?

Catherine McKinnell: Up and down the country, there is deep concern about the disappearing Sure Start services. We know that the worst is yet to come when we look at the dire straits in which many local authorities find themselves and the difficult decisions that many are having to make about their Sure Start services. My hon. Friend makes a very good point: that does sum up the Government’s attitude to support for children and families. They simply wash their hands of the issue whenever it is raised in this House.

We tabled new clause 1 because we want to compel the Government to explore the effectiveness of extending the free entitlement for three and four-year-olds when both parents are in work. The first part of new clause 1 seeks to understand what support the current proposals will provide to the parents who need it most. The free entitlement introduced under the Labour Government, which happily has been continued under this Government, makes a real difference to hard-pressed families. The simple truth is that, months after the Bill was first published and introduced, we are still none the wiser about exactly how many parents will be better off as a result of the top-up payments, or, crucially, by how much.

That stands in marked contrast to our plans to extend the free entitlement for three and four-year-olds, which will be worth £40 a week, or £1,500 a year, to about half a million children. We know from the Government’s impact assessment that of those families who will be newly eligible for support under the Bill—those who are self-employed, or those whose employers do not currently offer employer supported child care vouchers—the average benefit will be about £600 a year. Clearly, that is far lower than the £2,000 per child that the Government have been touting ever since they announced the policy for top-up payments in March.

It is worth remembering that some 520,000 families currently benefit from ESC vouchers. The Government’s impact assessment sets out a number of case studies where families might be better off or, indeed, worse off under the new top-up payments. The impact assessment suggests that families can retain their ESC vouchers if they wish, but goes on to list a whole range of caveats relating to whether parents will be able to continue to qualify, whether they would be better off remaining under the current voucher scheme, or whether the new top-up scheme might be better for them.

Clauses 62 and 63 seek to wind down the ESC scheme over the next few years, closing it to new entrants. Presumably, ESC vouchers will eventually vanish completely. If a parent changes jobs or if their employer stops offering vouchers—this could well happen, as voucher

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providers are set to see the majority of their business disappear—they will have no choice but to switch to top-up payments, leaving many worse off.

We heard evidence from a wide range of witnesses in Committee last month who cited the Resolution Foundation’s work. It is worrying that the Resolution Foundation had to undertake that work because the Government have not done sufficient work to look at the true impact on parents. The Resolution Foundation suggests that 80% of the families who will benefit from top-up payments are in the top 40% of income distribution. The remaining 20% will go to those in the middle of the distribution scale. If the key aims of the Bill are to support parents with the cost of child care and to help more parents back into work by making work an economically viable option, those figures raise questions about whether its aims are achievable through this Government scheme alone. In contrast, many child care experts agree that Labour’s child care plans, as outlined in new clause 1, meet these twin aims.

6 pm

In a follow-up to one of our Committee sittings, the Minister made a worrying admission. In a letter to Committee members, she revealed that on her Department’s estimation almost 10% of eligible families—about 170,000 families—did not have access to the internet and therefore, effectively, might not have access to the top-up payments. The Bill requires that parents hold online child care accounts to receive the Government top-up payments. It is proposed that these would be administered by NS&I, with back-office functions provided by Atos. It now transpires, however, that about 170,000 families might be excluded from these top-up payments simply because they do not have access to the internet. That is another reason why the Government should support new clause 1 and our proposals to extend the free entitlement, which would not have any of these implications or complications for parents.

In response, the Government plan to make exceptions for certain people, such as those with a disability or those who live in remote areas and have poor internet connectivity, but the point still stands: if someone does not have a computer or internet-enabled device, either because they cannot afford one or because they choose not to have one, it could essentially exclude them from the top-up payments and child care support. I hope that the Minister will respond to that issue, which I am sure even she would agree is hugely concerning.

Putting aside the question of who will benefit, our other concern—and another reason why we will be pressing new clause 1 to a vote—is whether the Government scheme will be as valuable to parents in a few years as when it is introduced. Our new clause 1 suggests extending free entitlement for three to four-year-olds whose parents are both in work and is a supply-led form of support that experts agree would neither have the same implications for child care prices nor potentially expose parents to artificial inflation—a concern about the Bill that has been expressed repeatedly. We have heard from a wide variety of witnesses that the potential benefits of the scheme could be wiped out by future increases in child care costs, which we know have already risen by 30% in the past four years and will continue to rise and outstrip the value of the support.

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The Institute for Public Policy Research and the Resolution Foundation have pointed to Australia and highlighted that demand-led subsidies, such as top-up payments, on their own, with no additional safeguards in place, only lead to even greater child care price inflation and pressure on hard-pressed parents’ budgets. Our new clause calls on the Government to consider a supply-led measure—extending the provision for three to four-year-olds—that is not so susceptible to the risk of price inflation. The Government have so far dismissed the widely expressed and legitimate concerns about the impact of the Bill on future child care prices. I hope the Minister can respond to these concerns, as expressed in new clause 1, as well as new clause 2, which we will come to later.

The third point I want to make concerns perhaps the most striking thing we took away from the evidence sessions last month and our line-by-line scrutiny sessions: the potential nightmare of complexity and confusion that parents might face following the introduction of top-up payments. The Bill proposes an entirely new mechanism for administering support for parents. By contrast, the measures in new clause 1 would simply extend an existing scheme—three to four-year-olds are already entitled to 15 hours of free child care—by providing an additional 10 hours where both parents are in work.

Widespread concerns have been raised that the Bill might add complexity and confusion when parents come to access child care support and have to decide whether to remain within the voucher scheme or switch to the top-up scheme. In particular, it might create additional confusion for parents on lower incomes who might not be in a position to make an active choice between schemes, but instead might have to move between schemes as their incomes fluctuate—as they move between being eligible for tax credits and universal credit support and losing that eligibility as they move into higher-paid work. We discussed those issues at length in Committee, but so far Ministers have failed to address them. For that reason, our new clause 1 seeks an alternative, additional support and cushion for vulnerable parents on the borderline between universal credit and the top-up payment scheme.

We know that there are plans to develop an online “better off” calculator, similar to the tax credit calculator, to aid parents in making these decisions, but if Ministers cannot tell hon. Members who will benefit from which scheme and by how much—depending on their income and circumstances—how do they propose to convey these messages to parents simply and effectively? How will parents be able to make a straightforward decision? So far, Ministers have been unable to answer these questions. Given that child care is vital for so many people who are in work, looking for work or looking to increase their hours, we need to know exactly how much support this scheme will provide for parents struggling with child care.

It is no use promising parents that the Government will provide thousands of pounds of support when in reality they will get much less; it is no good offering support to parents when the scheme comes into operation if in a short time that help will be worth far less; and it is no good dreaming up an entire new mechanism of child care support if it only makes parents’ lives more complicated —or, worse still, is prone to errors and failure. Furthermore, the scheme is untested and potentially costly. The figures have already been significantly revised, raising concerns about whether they have been properly calculated.

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For those reasons, we have tabled new clause 1. Given the numerous concerns expressed about the Government’s top-up scheme, we urge Ministers to give proper consideration to an additional, alternative plan—one that we know works and will make a big difference to 500,000 working families with three to four-year-olds: the plan to extend Labour’s free entitlement for three to four-year-olds from 15 hours to 25 hours a week for 38 weeks a year. We know that it would be worth £1,500 per year per child; that the funding would go directly to child care providers and therefore would not leave parents so exposed to inflated child care prices; and that it would be simple and straightforward to administer and implement for both parents and the Government; and we know how it would be funded—through an increase in the bank levy, which has returned so much less than the Government said it would.

The free early education entitlement for three to four-year-olds introduced under Labour has been hugely successful in providing vital support for parents and in helping them back into work. We know from the latest data from the Department for Education this year that some 94% of three-year-olds and 99% of four-year-olds—around 1.3 million children in total—currently benefit from this provision, the vast majority of whom, 1.2 million children, benefit from the full 15 hours a week to which they are entitled.

Kitty Stewart, research associate and associate professor at the Centre for the Analysis of Social Exclusion at the London School of Economics gave evidence to the Bill Committee last month. She commented on the remarkable progress seen with this child care offer over the last decade or so, saying:

“Considerable progress has been made in expanding access to early education and childcare over the last decade. One million new places have been created and the near universal take up of the free entitlement for three and four year olds is a remarkable achievement, ensuring that those families who were least likely to use ECEC services now have access.”

That is why we believe, as set out in new clause 1, that the Government should consider extending this hugely successful and effective offer to three and four-year-olds whose parents both work, in addition to the support provided in the Bill. We believe that doing so would be a far more effective way of achieving the Government’s aim of supporting parents with the cost of child care and helping more parents get back into work—aims that I know we all support.

Alex Cunningham (Stockton North) (Lab): I rise to support new clause 1 and specifically to speak to amendments 1 and 2, which are aimed at getting a fairer deal for parents with disabled children by respectively rethinking how we identify qualifying children to expand the definition beyond that planned by the Government, aligning it with the prescriptions of the Childcare Act 2006, and increasing the amount of top-up payment available to support parents of disabled children.

The provisions in clause 14 relate to “qualifying children” and lay out the criteria that such children must meet to be eligible for the scheme. Clause 14 is therefore fundamental to the entire Bill, so it is of the utmost importance that we get its provisions right. Failure to do so risks undermining the entire scheme.

After this amendment was brought forward in Committee, I understand that the Government’s intention was to frame regulations such that a “qualifying child”

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is defined as one aged under 12 or, in the case of a disabled child, under 17. I do not need to recap fully on the reasoning I set out in Committee; suffice it to say, as I mentioned at the time, that the stated definition of a disabled child does not fit easily with section 6 of the Childcare Act 2006, which places a duty on local authorities to provide sufficient child care for working parents with disabled children aged up to 18 “as far as practicable”.

The Exchequer Secretary objected to raising the age of eligibility for disabled children to 18 on the grounds that the age limit was set in line with the child care element of universal credit. However, it is important to recognise that the regulations on the child care element of universal credit reflect a maximum age that was set more than a decade ago when the child care element of working tax credit was established. Put simply, markedly less evidence was available on how families use child care, and our understanding has improved greatly since.

The Childcare Act 2006, however, was designed to take into account the evidence of child care needs in families with disabled children, which in many cases remain significant up to 18 and beyond. It therefore makes sense to adopt the maximum age set by the Childcare Act, which set a higher age because it was based on a comprehensive review of the available evidence, rather than revert back to an historical maximum age that no longer reflects our best understanding of families’ child care needs.

Through the tax-free child care scheme, the Government are committing significant new resources to support parents with child care costs. This will come at a cost of more than £800 million each year, and my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) made it very clear that we welcome that. There must be some scope to ensure that a balance exists between supporting all parents and those who face significant additional costs.

The additional costs of raising a disabled child are well documented, and the Minister herself noted in Committee that she was “conscious” of these additional child care costs that families with disabled children might have to meet. I need not go into any great detail, but these can include such things as extra nappies or continence supplies, specially designed shoes, IT adaptations and communication aids, as well as specially adapted toys or equipment. That is on top of the day-to-day premium that is paid already in the shape of higher travel and activity costs, and the like.

6.15 pm

The Minister noted in Committee that the Government already provide additional support to disabled children, pointing to universal credit, which she suggested provides

“more generous support for disabled adults and disabled children than it does for people in similar circumstances who are not disabled.”––[Official Report, Childcare Payments Public Bill Committee, 23 October 2014; c. 192.]

However, it is critical that we are clear about this. This extra support for disabled children that comes as part of universal credit is designed to offset the extra costs that have already been acknowledged, and not to pay for child care. This is the difference. If child care costs could be met within the basic element of tax credits, there would be no need for a further child care element for all parents. That, however, is not the case, and the Government have recognised as much by accepting that the significant extra costs of child care justify an additional child care element.

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Time and again, it has been emphasised that parents with disabled children often face markedly higher child care costs. As the Committee heard when taking oral evidence, 38% of parents with disabled children paid between £11 and £20 an hour for child care, while 5% paid more than £20 an hour. This is obviously very high when compared with the national average of £3.50 to £4.50 an hour. The support parents receive should reflect that reality.

This brings me nicely on to the case for amendment 2, which is designed explicitly to address the problem of affordability of child care for all parents with disabled children through the tax-free child care scheme by increasing the amount of support available through top-up payments. As Members are all aware, access to good-quality, affordable child care is important for all parents. Quality provision has positive impacts on children’s learning outcomes as well as wider benefits such as enabling parents to work.

However, the recent independent parliamentary inquiry into child care for disabled children highlighted that parents with disabled children are often excluded from child care owing to a range of barriers, including affordability. It is an uncomfortable reality that childhood disability is a not uncommon trigger for poverty because families incur considerable additional and ongoing expenses as a result. As I mentioned a few moments ago, the costs associated with bringing up a disabled child can be as much as three times higher than those incurred by bringing up a child without a disability.

The principal driver behind these high costs is the additional cost of one-to-one care or extra supervision, while suitable providers might need to meet the cost of physical adaptations and staff training. As I mentioned in Committee, I was pleased to see the Minister acknowledge these additional child care costs that families will need to meet and to hear her commitment to explore the possibility of going further to support these families. She now needs to do that. Even so, I hope that she will agree to examine the amendment in more detail, with a view to doubling the top-up available for disabled children from 20% to 40%.

Restrictively high child care costs are self-defeating in that they act as a barrier to inclusion for both parents and children. Of parents who responded to the inquiry survey, 80% of lone parents and 66% of couple parents who did not work full time said they wanted to find work or work more, while 72% of families with disabled children had cut back or given up work because of child care problems.

Worryingly, the survey also highlighted that parents without access to mainstream child care were struggling to find opportunities for their children to be independent, build confidence and make friends. Many Members will be aware that disabled children are much more dependent on organised activities, which fall within the child care registration system, to stay active, make friends and participate in activities outside of school.

As a direct consequence, parents with disabled children are more dependent on accessing child care provision to support family well-being and manage what is often an extremely tough combination of caring and work. However, with high child care costs and a reduced scope for work, these needs are all too often unmet. Indeed, the 1,200 parents and carers who responded to the independent parliamentary inquiry’s survey made it overwhelmingly

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clear that existing financial support for disabled children is not addressing the barriers of affordability. Despite the support that is currently available, child care is still beyond the reach of many families with disabled children because the hourly cost means that they quickly reach the weekly cap on support.

In addition to the burden imposed by higher everyday costs, there is the problem that less good-quality child care provision is available to parents of disabled children. Only two in five parent carers believe that child care providers in their areas can cater for their children’s disabilities, while only 35% feel that providers are available at times that conform with their daily commitments. According to the survey, matters are made even worse for parents of disabled children by the limited choice of suitable child care.

Both those issues must be addressed if the barriers to social inclusion are to be removed and parents are to be helped to work. The discrepancies in support for parents of disabled children are abundantly clear. Supporting amendment 1, and taking steps to align the maximum age of eligibility for the tax-free child care scheme and the child care element of universal credit with the Childcare Act 2006, would ensure that older disabled children benefited from financial support, and would help to remedy the poor provision for that age group. Failing to adopt the amendment would effectively mean that disabled children as young as 16 lost out. We all know that it would greatly improve the well-being of young people and benefit their families if support continued until after their 18th birthdays.

Maria Miller (Basingstoke) (Con): I understand what the hon. Gentleman is saying, because it accords with my experience in my constituency, but does he not think that local authorities have an obligation to ensure that there is sufficient care for disabled children? KIDS nursery in my constituency is a specialist nursery for disabled children. Should not local authorities be thinking about providing such services as well?

Alex Cunningham: I have been fighting the ending of specialist nursing provision at my local hospital, because it meets the specific needs of parents of disabled children. There has been a considerable reduction in the amount of money that enables local authorities to meet the demand for essential services—if they were given more means, they might well be able to expand provision—but I agree with the right hon. Lady that someone should take responsibility, and I think that my amendment goes some way towards ensuring that that happens.

In Committee, the Minister said:

“It is right that we make the new scheme consistent with the current framework.”––[Official Report, Child care Payments Public Bill Committee, 23 October 2014; c. 192.]

I urge her to reconsider her decision not to increase support for parents of disabled children. She can help today by increasing the maximum age at which disabled children become eligible for the tax-free child care scheme—and, in future, for the child care element of universal credit —to 18, to align the scheme with the prescriptions of the Childcare Act sufficiency duty, and to give the families of disabled children the support that they need and deserve.

At the same time, the Government should aim to establish a framework that would include all children with disabilities in child care in order to fulfil the basic

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principles of equality and inclusion. Equitable access to affordable, flexible, high-quality child care would be hugely valuable to children’s social and educational development, not to mention parents’ well-being and long-term economic prospects. In its present form, however, the tax-free child care scheme will not effectively remove the additional affordability barriers from parents with disabled children. To address that inequality, the Government should provide the additional top-up payments for disabled children through the tax-free child care scheme that amendment 2 would provide. I hope that the Minister will consider that proposal.

The Exchequer Secretary to the Treasury (Priti Patel): It gives me great pleasure to speak in the debate. Let me begin by thanking everyone who contributed to the Committee stage, engaging in constructive dialogue, submitting the Bill to line-by-line scrutiny, sharing their views and giving evidence. I think that all Members found the evidence sessions extremely helpful. Opposition Members tabled a number of well-considered probing amendments that were designed to seek clarification throughout—

Madam Deputy Speaker (Dame Dawn Primarolo): Order. This is not an opportunity to review all the work that was done in Committee. The debate is very narrow. The Minister should be responding to the debate on new clause 1 and the amendments. I do not want her to come to that gradually; it is the only thing that she should be doing. I have given her a little bit of latitude, but perhaps she will now return to new clause 1.

Priti Patel: I will do so very promptly, Madam Deputy Speaker.

New clause 1 would require the Government to publish, within three months of Royal Assent, an assessment of the benefits of this scheme to parents of three and four-year-old children, together with an assessment of the benefits in addition to the likely benefits of funding 25 hours of free child care per week for such parents.

The Government fully understand the importance of high-quality early education for that age group, which is why they fund 15 hours a week of early education for every three or four-year-old. We have extended that entitlement to the least advantaged 40% of two-year-olds, thus saving their families about £2,440 a year. By the end of this financial year, funding for early education places alone will have risen by over £1 billion during the current Parliament. We have committed ourselves to that substantial investment in early education because there is overwhelming evidence, here and elsewhere in the world, that high-quality early education has long-lasting benefits for children. We have seen big year-on-year improvements in the development of five-year-old children who have benefited from early learning, although we recognise that many factors influence school readiness and later attainment. We have commissioned academically robust and detailed research in order to understand more about the way in which high-quality early education affects children’s attainment and social and behavioural development.

However, it is important to recognise—as the Bill does—that the cost of child care is an issue not just for under-fives, but for school-age children. For many working families, the high costs of child care make it one of the

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largest parts of the household budget. The Government believe that there is a powerful case for improving access to child care throughout childhood, and to ensure that parents are helped to work if they choose to do so. The new scheme for children up to the age of 12 will build on the £5 billion per year that the Government already spend on early education and child care. It will help many more parents to meet their costs, including self-employed parents who cannot gain access to support under the existing employer-supported child-care scheme.

We recognise that every family is different, and will have different child-care needs and cost. We recognise that no one size fits all. The scheme is therefore designed to provide flexible support for working families, and to cater for different family circumstances. For example, it will allow parents to build up money in their child-care accounts to cover increased costs at holiday times.

As I have already said many times during our debates on the Bill, the Government have made a clear commitment to reviewing the impact of the scheme two years after its full implementation. That was made clear in the impact assessment that was published alongside the Bill. The review will consider the impact on all age groups within the scope of the scheme—which will, of course, include three and four-year olds—but it will not consider the effects of free early education, which is already the subject of extensive evaluation.

The Government take the evaluation of early education very seriously. We have commissioned a significant longitudinal study of early education and development, which will evaluate the effectiveness of the current early-education model in England and, more specifically, the impact of funded early-years education on two-year-olds from lower-income families. It will also update evidence from the effective pre-school and primary education project. It will continue until 2020.

The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) made a number of points. For instance, she mentioned children’s centres. Let me reiterate that the Government want to see a strong network of children’s centres throughout the country, offering families access to a wide range of local and flexible services, tackling disadvantage, and preparing children for later life. Again, we covered in Committee many of the points about what goes on in centres and support in children’s centres.

The hon. Lady also specifically mentioned supply-side provision of child care, which we touched on in Committee, too. There are 100,000 more child care places than there were in 2009 and a lot of work is being done on the supply-side provision of child care, which is the point of this Bill.

6.30 pm

On the quality side, we are providing £50 million in extra funding in 2015-16 to nurseries, schools and other providers of Government-funded early education, to support disadvantaged three and four-year-olds. This is also about improving quality as well as quantity, and improving qualifications for the early-years work force and introducing early-years educator qualifications are vital. We have discussed that, too.

The hon. Lady made a point about the overall support for child care and those on lower incomes. The overall system of child care support remains focused on those

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on lower incomes. The Government are already spending over £1 billion a year on child care support through tax credits and will extend this support in universal credit. Under UC, this Government are investing an additional £400 million so that families can claim up to 85% off the costs of child care from 2016, and £200 million is also being put in so that child care support will be available regardless of the number of hours worked.

The hon. Lady mentioned the impact assessment and the average increase in tax-free child care being £600. On average this increase in support is £600, but the average award will be higher because that is an average figure.

The hon. Lady also mentioned access to the internet for families—for 200,000 families—and I would like to bring some clarity on this point. The newspaper stories that appeared yesterday were inaccurate because what was reported is simply not fully the case; they distort the situation. As outlined in the letter circulated to Members of Parliament, there will be “assisted approaches” for families who cannot access the internet, which will make sure that no parent misses out. We do recognise that some parents will have difficulty accessing or using the internet, and in such cases Her Majesty’s Revenue and Customs will support them to register and use their child care account online, providing opportunities for learning and, where appropriate, encouraging parents to use online services independently in future. I touched on this in Committee: the HMRC support is very specific and the support will be there. I want to make that clear so no Members leave the House tonight thinking there is no support for those families. Where parents are simply not able to access the internet, there will be facilities for them to access the scheme by telephone. That point was also made previously.

We also touched extensively in Committee on the point about the system being too complex. I want to assure all Members that this scheme is designed with parents in mind. It is intended to be streamlined in its application, and very straightforward, simple, flexible and convenient for parents. As I said in Committee, we are working with parents and many stakeholder groups—including many who gave evidence in Committee, and those we have been working with on the design of this scheme—to ensure that their suggestions, advice, counsel and guidance are taken on board.

This is not meant to be a complex scheme. It is meant to be as user-friendly for parents as possible, which is why we are listening and consulting, because it is all about the design and making sure that those who need to access the scheme can do so.

Maria Miller: The Minister will have provided a great deal of clarity today for parents who might have been concerned about some of the reports they had read in the papers. I thank her on behalf of my constituents for what she has said.

The Minister mentioned the communication she is having with stakeholder groups. Is she also communicating with employers to make sure they are aware of the way the new system will work, especially those who may want to make their own contributions to their staff’s child care costs?

Priti Patel: I thank my right hon. Friend for her intervention and comments. She is absolutely right; as she will know from discussions in Committee, this

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scheme has been designed to be parent-focused—parent-friendly is, I think, the term to use—and to work with employers, because this is about engaging both parties to communicate, educate and inform. Employers have an important role to play—we must not forget that—so working with employers on the scheme design is key.

The introduction of this new scheme sits alongside strong early-education entitlement for pre-schoolers to support families and hard-pressed families with their child care costs and support parents to work more if they want to do so.

As I said in Committee and we have touched on again today, we have already committed to reviewing the impact of this new scheme after two years, and it is hard to see what purpose would be served by a review only three months after Royal Assent, given the Government’s clear commitment to reviewing the scheme.

I shall now move on to the points made about amendments 2 and 1 and the comments of the hon. Member for Stockton North (Alex Cunningham). I welcome his comments and I followed his remarks with interest, and we discussed these matters in Committee. We fully accept that child care costs are higher for parents with disabled children; there is no disagreement here at all. The families and parents of disabled children struggle with the challenges of raising and looking after their children. We had a very fluid debate about this in Committee.

The effect of amendment 2 is straightforward. It would increase the level at which the Government top-up payments are paid to parents of disabled children from 20% to 40%. This would mean in practice that for every £10 spent on child care, the Government would contribute £4 and the parent the remaining £6. This contrasts with the position set out in the Bill, which is that the Government would contribute £2 of every £10 spent on child care.

I am very well aware of the keen interest the hon. Gentleman takes in families with disabled children. He spoke with great eloquence in Committee and I thank him for his contribution on this point. As he rightly pointed out, families with disabled children face significant costs, and that fact ought to be reflected in the scheme. A number of witnesses who gave evidence to the Committee made similar points. I have already put on the record that I fully understand the arguments the hon. Gentleman and others have made and it is absolutely right that parents of disabled children are properly supported, which brings me to why I will ask him not to press his amendments.

Alex Cunningham: I thank the Minister for her kind comments, but the multiplication that I want to achieve for disabled children does not even reflect the multiplication factor in their child care costs. Child care can cost £20 an hour, but all I am asking is that the Government double the amount of support they give. I am not asking them to increase it by four or five times.

Priti Patel: I thank the hon. Gentleman for his comment. I outlined measures relating to disabled children in Committee. We recognise the high costs faced by parents of disabled children, and the specialist care that their children need, but increasing the amount of top-up is obviously not appropriate, for the reasons that I have already outlined. I have made a commitment on disabled children, and I am exploring the possibility of increasing

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the maximum amount that a parent of a disabled child can pay into their child care account. For those reasons, I ask the Opposition to withdraw their new clause.

Catherine McKinnell: I thank the Minister for her thorough reply to the concerns that I expressed earlier. She has gone some way towards alleviating them, but some concerns remain. We shall have to give the Government the benefit of the doubt on the delivery of her reassurances, but that does not take away from the fact that dealing with the supply-side issues and extending the free entitlement for three and four-year-olds would constitute a much better offer to parents. The Government could do that now to provide support for parents who are struggling with child care costs and with the cost of living more generally. We will therefore press new clause 1 to a vote.

Question put, That the clause be read a Second time.

The House divided:

Ayes 206, Noes 274.

Division No. 80]


6.41 pm


Abbott, Ms Diane

Ainsworth, rh Mr Bob

Alexander, Heidi

Ali, Rushanara

Allen, Mr Graham

Ashworth, Jonathan

Austin, Ian

Bailey, Mr Adrian

Bain, Mr William

Balls, rh Ed

Banks, Gordon

Barron, rh Kevin

Bayley, Hugh

Beckett, rh Margaret

Begg, Dame Anne

Berger, Luciana

Betts, Mr Clive

Blackman-Woods, Roberta

Blears, rh Hazel

Blomfield, Paul

Bradshaw, rh Mr Ben

Brown, Lyn

Brown, rh Mr Nicholas

Brown, Mr Russell

Buck, Ms Karen

Byrne, rh Mr Liam

Campbell, rh Mr Alan

Campbell, Mr Ronnie

Champion, Sarah

Chapman, Jenny

Clarke, rh Mr Tom

Clwyd, rh Ann

Coaker, Vernon

Connarty, Michael

Cooper, Rosie

Cooper, rh Yvette

Crausby, Mr David

Creagh, Mary

Creasy, Stella

Cryer, John

Cunningham, Alex

Cunningham, Mr Jim

Cunningham, Sir Tony

Dakin, Nic

Danczuk, Simon

David, Wayne

Davies, Geraint

De Piero, Gloria

Dobson, rh Frank

Docherty, Thomas

Donohoe, Mr Brian H.

Doran, Mr Frank

Doughty, Stephen

Doyle, Gemma

Dromey, Jack

Durkan, Mark

Eagle, Maria

Esterson, Bill

Evans, Chris

Farrelly, Paul

Field, rh Mr Frank

Fitzpatrick, Jim

Flint, rh Caroline

Flynn, Paul

Fovargue, Yvonne

Francis, Dr Hywel

Gapes, Mike

Gilmore, Sheila

Glass, Pat

Glindon, Mrs Mary

Godsiff, Mr Roger

Goodman, Helen

Greatrex, Tom

Greenwood, Lilian

Griffith, Nia

Gwynne, Andrew

Hain, rh Mr Peter

Hamilton, Fabian

Hanson, rh Mr David

Harman, rh Ms Harriet

Harris, Mr Tom

Havard, Mr Dai

Healey, rh John

Hepburn, Mr Stephen

Hermon, Lady

Heyes, David

Hillier, Meg

Hodgson, Mrs Sharon

Hood, Mr Jim

Hosie, Stewart

Howarth, rh Mr George

Hunt, Tristram

Irranca-Davies, Huw

James, Mrs Siân C.

Jamieson, Cathy

Jarvis, Dan

Johnson, rh Alan

Johnson, Diana

Jones, Helen

Jones, Mr Kevan

Jones, Susan Elan

Kaufman, rh Sir Gerald

Keeley, Barbara

Kendall, Liz

Lammy, rh Mr David

Lavery, Ian

Lazarowicz, Mark

Leslie, Chris

Lewell-Buck, Mrs Emma

Llwyd, rh Mr Elfyn

Love, Mr Andrew

Lucas, Ian

MacNeil, Mr Angus Brendan

Mactaggart, Fiona

Mahmood, Mr Khalid

Mahmood, Shabana

Malhotra, Seema

Mann, John

Marsden, Mr Gordon

McCabe, Steve

McCann, Mr Michael

McCarthy, Kerry

McClymont, Gregg

McDonagh, Siobhain

McDonald, Andy

McDonnell, John

McFadden, rh Mr Pat

McGovern, Alison

McGovern, Jim

McGuire, rh Mrs Anne

McInnes, Liz

McKechin, Ann

McKenzie, Mr Iain

McKinnell, Catherine

Mearns, Ian

Mitchell, Austin

Moon, Mrs Madeleine

Morden, Jessica

Morrice, Graeme


Morris, Grahame M.


Mudie, Mr George

Munn, Meg

Murphy, rh Mr Jim

Murphy, rh Paul

Murray, Ian

Nandy, Lisa

Nash, Pamela

O'Donnell, Fiona

Osborne, Sandra

Owen, Albert

Pearce, Teresa

Perkins, Toby

Pound, Stephen

Powell, Lucy

Qureshi, Yasmin

Raynsford, rh Mr Nick

Reed, Mr Steve

Reeves, Rachel

Reynolds, Emma

Reynolds, Jonathan

Riordan, Mrs Linda

Ritchie, Ms Margaret

Robertson, Angus

Robertson, John

Robinson, Mr Geoffrey

Rotheram, Steve

Roy, Mr Frank

Ruane, Chris

Sarwar, Anas

Sawford, Andy

Seabeck, Alison

Sharma, Mr Virendra

Sheerman, Mr Barry

Shuker, Gavin

Skinner, Mr Dennis

Slaughter, Mr Andy

Smith, Angela

Smith, Owen

Spellar, rh Mr John

Straw, rh Mr Jack

Stuart, Ms Gisela

Sutcliffe, Mr Gerry

Thomas, Mr Gareth

Timms, rh Stephen

Trickett, Jon

Turner, Karl

Twigg, Derek

Twigg, Stephen

Umunna, Mr Chuka

Vaz, rh Keith

Vaz, Valerie

Watson, Mr Tom

Watts, Mr Dave

Weir, Mr Mike

Whitehead, Dr Alan

Williams, Hywel

Williamson, Chris

Wilson, Phil

Winnick, Mr David

Winterton, rh Ms Rosie

Wishart, Pete

Wood, Mike

Woodcock, John

Woodward, rh Mr Shaun

Wright, David

Wright, Mr Iain

Tellers for the Ayes:

Mr David Hamilton


Graham Jones


Afriyie, Adam

Aldous, Peter

Amess, Mr David

Arbuthnot, rh Mr James

Bacon, Mr Richard

Baker, Steve

Baldwin, Harriett

Barclay, Stephen

Barker, rh Gregory

Bebb, Guto

Beith, rh Sir Alan

Benyon, Richard

Beresford, Sir Paul

Berry, Jake

Bingham, Andrew

Binley, Mr Brian

Birtwistle, Gordon

Blackman, Bob

Blackwood, Nicola

Bone, Mr Peter

Bottomley, Sir Peter

Bradley, Karen

Brady, Mr Graham

Bray, Angie

Bridgen, Andrew

Brine, Steve

Brokenshire, James

Brooke, rh Annette

Browne, Mr Jeremy

Bruce, Fiona

Bruce, rh Sir Malcolm

Buckland, Mr Robert

Burns, Conor

Burns, rh Mr Simon

Burrowes, Mr David

Burt, rh Alistair

Burt, Lorely

Cairns, Alun

Campbell, rh Sir Menzies

Carmichael, rh Mr Alistair

Carmichael, Neil

Chishti, Rehman

Clark, rh Greg

Clarke, rh Mr Kenneth

Clifton-Brown, Geoffrey

Coffey, Dr Thérèse

Collins, Damian

Colvile, Oliver

Crabb, rh Stephen

Crockart, Mike

Davey, rh Mr Edward

Davies, David T. C.


Davies, Glyn

Davies, Philip

Davis, rh Mr David

de Bois, Nick

Djanogly, Mr Jonathan

Doyle-Price, Jackie

Drax, Richard

Duncan Smith, rh Mr Iain

Ellis, Michael

Ellison, Jane

Ellwood, Mr Tobias

Elphicke, Charlie

Eustice, George

Evans, Graham

Evans, Jonathan

Evennett, Mr David

Fabricant, Michael

Fallon, rh Michael

Featherstone, rh Lynne

Field, Mark

Foster, rh Mr Don

Francois, rh Mr Mark

Freeman, George

Freer, Mike

Fullbrook, Lorraine

Fuller, Richard

Gale, Sir Roger

Garnier, Sir Edward

Garnier, Mark

Gibb, Mr Nick

Gilbert, Stephen

Gillan, rh Mrs Cheryl

Glen, John

Goldsmith, Zac

Goodwill, Mr Robert

Gove, rh Michael

Graham, Richard

Grant, Mrs Helen

Gray, Mr James

Green, rh Damian

Greening, rh Justine

Grieve, rh Mr Dominic

Griffiths, Andrew

Gyimah, Mr Sam

Hague, rh Mr William

Halfon, Robert

Hames, Duncan

Hammond, Stephen

Hancock, rh Matthew

Hands, rh Greg

Harper, Mr Mark

Harrington, Richard

Harris, Rebecca

Hart, Simon

Harvey, Sir Nick

Haselhurst, rh Sir Alan

Hayes, rh Mr John

Heald, Sir Oliver

Heath, Mr David

Heaton-Harris, Chris

Hemming, John

Henderson, Gordon

Hendry, Charles

Herbert, rh Nick

Hinds, Damian

Hoban, Mr Mark

Hollobone, Mr Philip

Hopkins, Kris

Horwood, Martin

Howell, John

Hughes, rh Simon

Hunt, rh Mr Jeremy

Hunter, Mark

Huppert, Dr Julian

Hurd, Mr Nick

Jackson, Mr Stewart

James, Margot

Jenrick, Robert

Johnson, Joseph

Jones, Andrew

Jones, rh Mr David

Jones, Mr Marcus

Kawczynski, Daniel

Kelly, Chris

Kirby, Simon

Knight, rh Sir Greg

Kwarteng, Kwasi

Lamb, rh Norman

Lancaster, Mark

Lansley, rh Mr Andrew

Latham, Pauline

Leadsom, Andrea

Lee, Jessica

Lee, Dr Phillip

Lefroy, Jeremy

Leigh, Sir Edward

Leslie, Charlotte

Letwin, rh Mr Oliver

Lewis, Brandon

Lewis, Dr Julian

Lidington, rh Mr David

Lilley, rh Mr Peter

Lloyd, Stephen

Lopresti, Jack

Luff, Sir Peter

Maude, rh Mr Francis

Maynard, Paul

McCartney, Karl

McIntosh, Miss Anne

McVey, rh Esther

Menzies, Mark

Metcalfe, Stephen

Miller, rh Maria

Mills, Nigel

Milton, Anne

Moore, rh Michael

Mordaunt, Penny

Morris, Anne Marie

Morris, David

Morris, James

Mosley, Stephen

Mowat, David

Mulholland, Greg

Mundell, rh David

Munt, Tessa

Murray, Sheryll

Neill, Robert

Newmark, Mr Brooks

Newton, Sarah

Nokes, Caroline

Norman, Jesse

Nuttall, Mr David

O'Brien, rh Mr Stephen

Offord, Dr Matthew

Opperman, Guy

Paice, rh Sir James

Parish, Neil

Patel, Priti

Paterson, rh Mr Owen

Pawsey, Mark

Penning, rh Mike

Penrose, John

Percy, Andrew

Phillips, Stephen

Pincher, Christopher

Poulter, Dr Daniel

Pritchard, Mark

Pugh, John

Raab, Mr Dominic

Randall, rh Sir John

Redwood, rh Mr John

Rees-Mogg, Jacob

Reid, Mr Alan

Robathan, rh Mr Andrew

Robertson, rh Sir Hugh

Robertson, Mr Laurence

Rogerson, Dan

Rudd, Amber

Ruffley, Mr David

Russell, Sir Bob

Rutley, David

Sanders, Mr Adrian

Sandys, Laura

Scott, Mr Lee

Selous, Andrew

Shapps, rh Grant

Sharma, Alok

Shepherd, Sir Richard

Simmonds, Mark

Simpson, Mr Keith

Skidmore, Chris

Smith, Chloe

Smith, Henry

Smith, Julian

Soames, rh Sir Nicholas

Soubry, Anna

Spelman, rh Mrs Caroline

Stanley, rh Sir John

Stephenson, Andrew

Stewart, Bob

Stewart, Iain

Streeter, Mr Gary

Stride, Mel

Stuart, Mr Graham

Stunell, rh Sir Andrew

Sturdy, Julian

Swayne, rh Mr Desmond

Swire, rh Mr Hugo

Syms, Mr Robert

Tapsell, rh Sir Peter

Thornton, Mike

Timpson, Mr Edward

Tomlinson, Justin

Tredinnick, David

Truss, rh Elizabeth

Turner, Mr Andrew

Tyrie, Mr Andrew

Uppal, Paul

Vaizey, Mr Edward

Vara, Mr Shailesh

Villiers, rh Mrs Theresa

Walker, Mr Robin

Wallace, Mr Ben

Watkinson, Dame Angela

Webb, rh Steve

Wharton, James

Wheeler, Heather

White, Chris

Whittaker, Craig

Willetts, rh Mr David

Williams, Roger

Williams, Stephen

Williamson, Gavin

Willott, Jenny

Wilson, Mr Rob

Wollaston, Dr Sarah

Wright, rh Jeremy

Wright, Simon

Yeo, Mr Tim

Young, rh Sir George

Zahawi, Nadhim

Tellers for the Noes:

Tom Brake


Gavin Barwell

Question accordingly negatived.

17 Nov 2014 : Column 80

17 Nov 2014 : Column 81

17 Nov 2014 : Column 82

New Clause 2

Review of impact on childcare costs

‘(1) The Chancellor of the Exchequer shall, three months after this Act is passed, and every three years thereafter, review the impact of the measures in this Act on the cost of childcare with particular reference to—

(a) the effectiveness of this Act on making childcare more affordable;

17 Nov 2014 : Column 83

(b) the average cost of childcare for parents in work, including the impact of other changes to the tax and benefits system and with reference to the trends in childcare costs since 2010; and

(c) the impact of supply-led measures on the cost of childcare.’—(Alison McGovern.)

Brought up, and read the First time.

Alison McGovern (Wirral South) (Lab): I beg to move, That the clause be read a Second time.

Madam Deputy Speaker (Mrs Eleanor Laing): With this it will be convenient to discuss the following:

Amendment 12, in clause 11, page 7, line 8, after “may —”, insert—

“(a) repeal this section, or”.

Amendment 13, in clause 15, page 9, line 10, after “may —”, insert—

“(a) amend this Act to allow childcare accounts to be held by persons other than those specified in subsection (1),”.

Amendment 3, in clause 30, page 17, line 3, leave out

“an award of tax credit is or has been made”

and insert

“an award of tax credit which includes the childcare element is or has been made”.

Amendment 4, page 17, line 18, after “credit”, insert

“which includes the childcare element”.

Amendment 5, page 17, line 22, after “credit”, insert

“which includes the childcare element”.

Amendment 6, page 17, line 31, after “credit”, insert

“which includes the childcare element”.

Amendment 7, in clause 32, page 19, line 16, after “credit”, insert

“which includes the childcare element”.

Amendment 8, in clause 35, page 21, line 21, after “credit”, insert

“which includes the childcare element”.

Amendment 9, page 21, line 32, after “credit”, insert

“which includes the childcare element”.

Amendment 10, in clause 36, page 22, line 12, after “credit”, insert

“which includes the childcare element”.

Amendment 11, page 22, line 24, after “credit”, insert

“which includes the childcare element”.

Alison McGovern: It is a pleasure to speak in support of new clause 2, which stands in my name and that of my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell). Before I continue, may I pause briefly to pay tribute to the outstanding work that my hon. Friend the Member for Manchester Central (Lucy Powell) did as my predecessor in this shadow position, and in particular to her scrutiny of the Bill in Committee?

In and of itself, this is not a bad Bill. We agree with its aims; it sets out to address serious issues relating to child care costs and affordability, which we recognise form a major part of the crisis hitting so many families in Britain today. Our concerns with the Bill are that, for all its good intentions in proposing this scheme for payments towards child care costs, Treasury Ministers have not thought through all the potential consequences.

17 Nov 2014 : Column 84

Some of the Bill’s weaknesses may arise from the fact that, as far as the Government are concerned, this is purely a Treasury Bill; it has perhaps lacked some valuable input from those with a stronger experience of how the child care market actually operates—or, in far too many cases, fails to operate—in this country.

In oral evidence to the Committee, numerous organisations and experts raised concerns about the long-term effects of the Bill, and we have seen little movement from the Government to address those worries. The new clause seeks to go some way to rectifying that, by requiring the Chancellor to keep under review the impact the scheme has on issues of child care cost inflation and, thus, affordability.

Let me say a few words about the situation in which we find ourselves. There is, undeniably, a crisis in child care costs. There is no need to take my word for that or to rely on the testimony we hear on the doorsteps in our constituencies. The Office for National Statistics tells us that between 2010 and 2014 the cost of placing a two-year-old or older in nursery rose by 31%—wages rose by just under 4% in that period—and for under-twos the figure rose by 27%. [Interruption.] If the hon. Member for Taunton Deane (Mr Browne), who is sitting on the Liberal Democrat Front Bench, wants to intervene, he is welcome to. [Interruption.] I shall take that to mean he does not.

The figures also reveal that, as we have seen so often during the past four years, the areas seeing the least benefit from this weak and uneven recovery have been hit the hardest by child care cost increases. In my region of the north-west, costs are up by 46% in just four years. Over the Pennines, in the north-east, the figure is 47%. A family in my constituency is having to find, on average, £31 a week more to fund 25 hours of nursery for their two-year-old, three-year-old or four-year-old. That is a hefty sum in almost anyone’s money. When that is tied in with frozen wages, reduced tax credits, increased VAT and soaring housing costs, it all becomes a pretty desperate recipe—I hear testimony on that from my constituents week in, week out.

We know that not only are there regional biases to costs, but families with disabled children are being hit disproportionately hard as well. I pay tribute to my hon. Friend the Member for Stockton North (Alex Cunningham), who was a doughty champion for the parents of disabled children in Committee and who has tabled amendments 1 to 13 today. The cross-party parliamentary inquiry on child care for disabled children, of which my hon. Friend was a member and which was chaired by my hon. Friend the Member for North West Durham (Pat Glass) and the hon. and learned Member for South Swindon (Mr Buckland), produced some valuable findings on that point.

7 pm

Some 86% of parents with disabled children report paying above the average price for child care; in many cases, they are paying up to £20 a week more. Those parents will be hit even harder by the rapid rate of child care cost inflation. For too many families, child care costs are now their No.1 outgoing. If two parents work part time on average wages, it will be Thursday of each week before they have paid their child care bills and can move on to paying for everything else. That is a crisis indeed.