PREMISES FOR THE PROVISION OF CHILD CARE

Ms Harriet Harman (Peckham)

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

With this, it will be convenient to discuss also the following: New clause 6—Child care vouchers—

Ms Harman

New clause 1 raises a genuine anomaly in the tax treatment of employers who provide nurseries for their employees. It highlights the difference between the tax treatment of employers in factories and warehouses who provide such nurseries, and that of employers in shops and offices who do the same. It also highlights the difference between employers in shops and offices who provide their employees with sports facilities and those who provide nurseries: the latter do not receive the same tax concessions as the former. The new clause also deals with the important question of child care, giving us an opportunity to examine the current position and to demand action from the Government.

766 Nothing less than a social and economic revolution has taken place in this country over the past couple of decades. The patterns of both family life and work have changed. A typical employee used to be a man working full time, expecting to work full time from the moment when he left school to the moment when he retired at 65, and assuming that, throughout that time, he would be supported by a non-working wife caring for their children at home.

Now, however, there is no set pattern of family life, and families come in all shapes and sizes. Two specific trends are discernible: more families are headed by lone mothers, and there are fewer extended families. Granny is less likely to be on the scene.

The revolution has extended to the workplace. Women now constitute half the work force. It cannot be said often enough that public policy must catch up with the revolution in the labour market and the world of work, and its effect on the economy. Women's work is essential to the economy, as women now work in all regions of the country and in all industries; however, it is also essential to the family budget. Women are working not just for themselves, but for their families and the economy as a whole.

There has also been a revolution in women's educational qualifications. Women now have educational qualifications equal to those of men when they leave school, college or university—not necessarily in the same subjects, but investment in the education of girls and women now equals investment in that of boys and men.

A new army of women has joined men at work—and most of those women are mothers. The Government, however, have failed even to ask themselves, let alone answer, the question that every working mother must ask herself: who will look after the children? As far as we can see, there is no public policy on child care—no public policy to match the revolution that has taken place at home and at work.

The Government have simply turned a blind eye to the needs of the children of working mothers; parents have been left to fend for themselves, and for most working parents the care of both pre-school and school-age children is a headache.

I make it absolutely clear that, although we are talking tonight about children aged under five years, we are talking also about school-age children. It is not as though, once children start school at the age of five, the problems are solved for working parents. We should think about all those in-service training days when working women are tearing out their hair, and think of the school holidays, and of half term. School is not child care, and it does not solve the problems of working parents.

I hope that, when people worry, as they are right to do, about children being stuck in front of videos, they also ask themselves what the connection is between the debate about children spending too much time watching videos and the debate we are having today about the lack of facilities for school-age and pre-school children.

With women now entering the labour market and making up half the total work force, the result has been a huge increase in the demand for child care. The southern European countries—the Mediterranean countries—by and large still have a well-developed extended family network. Therefore, child care needs can be met to quite a large extent by aunts, great aunts or grandmothers. That is no longer the case in most communities in this country.

767 The northern European countries meet the demand for child care by providing day nurseries, nursery schools and classes, and through out-of-school provision. Many of those countries also have a more stable extended family network than we have.

In the south of Europe, there are extended families as well as many well-developed child care systems, and in the north there is good child care provision as well as extended families. But what do we have in this country to support the children of working parents when we do not have the extended families or child care?

The demand for child care is increasingly being met, not by an increase in the number of nurseries—which would be the first choice of many parents—but by an increase in the number of child minders. I have obtained some figures through answers to parliamentary questions. Between 1982 and 1992, the number of places in local authority day nurseries fell. What an indictment that is. There has been an unprecedented increase in the number of women going to work, yet there has been a fall of 4,500 in the number of places in local authority day nurseries.

The really big increase in child care provision has been in the number of child minders. More than a quarter of a million children are now cared for by child minders—an increase of more than 150,000 in the last 10 years. The lack of child care provision and the increase in the number of women in the work force have resulted in an increase in demand for child minders which has been met by an increase in the number of child minders.

For many—especially those with very young children —that is the preferred form of child care; but for more it is not. The number of children cared for by child minders has grown by more than 150,000 in the last 10 years. But for most of those parents, child minders are simply the only available option or the cheapest option; they are not necessarily the first choice of the parents or of experts examining the child care situation.

In the past, the child of a working mother was more likely to be cared for in a nursery. During the war, when the men went off to fight and the women worked in industries such as the armaments industry, the response was to ensure that nurseries were available for the children of working mothers. But there has not been a similar response to the current influx of women entering the work force. A network of nurseries has not been established today as was established during the war, when an equal number of women worked.

4.45 pm

As women have entered the work force, child care has been privatised and fragmented, with the need met by private nurseries. There has been an increase in the number of private nurseries, although there are still very few places available in private nurseries. Only 91,000 children have places in private nurseries, compared with the quarter of a million children who are cared for by child minders.

Often, the reason why children are cared for by child minders rather than in a private nursery—the two alternative forms of private child care—is the cost of private nurseries. The Government's own figures show that it can cost up to £150 per week for a private nursery place.

In our view, it is wholly unsatisfactory that a major public policy shift has taken place with no parliamentary debate or public discussion. I should like to hear the Minister's reaction to these issues. Does he think that it is satisfactory that parents have no choice of child care, and 768 that many can only afford a child minder? Does he think that a nursery place should be a viable choice? Does he think that a public policy issue is involved here, or is it simply a matter of parents who work fending for themselves?

I look forward to the Minister's response to these questions. I hope that he will not say that it is a matter for his colleagues in the Department of Health, the Department for Education or the Department of the Environment. I can tell the Minister that each one is saying that it is a matter for the other. As the Minister is in the Chamber, perhaps we can hear from him the Government's response to this important economic issue.

Every Minister I have asked for information about the child care strategy has given a different answer. There have been different answers because there is ambivalence about the issue of what child care provision there should be for the children of working mothers. There is a similar ambivalence about nursery provision.

We have seen the Government going hither and thither in their approach to nursery education. On 14 November, last year The Sunday Times said that the Secretary of State for Education was ruling out universal nursery education and dismissing it as too expensive. He said: We haven't got any money. We are in a difficult public expenditure round.

Ms Angela Eagle (Wallasey)

Would my hon. Friend agree that that kind of argument is very short-sighted, as keeping mothers who wish to work on benefit does not save the taxpayers money? It means that mothers are stuck on benefit and are not making a contribution to the tax revenue, which they would be making if they could afford to work because they had access to affordable child care.

Ms Harman

My hon. Friend is absolutely right, and I hope to return to that issue.

Without a nursery place, many parents—particularly single parents—are dependent upon benefits and cannot go out to work. That is quite apart from the fact that research shows that nursery education benefits children, and therefore should be seen as a long-term investment in children's futures.

Although in November the Secretary of State for Education ruled out nursery education for children as too expensive, and said that it was not possible because the Government had a "difficult public expenditure round", a month later, on 23 December, the Prime Minister changed the tune. He said that it was the Government's intention to move to universal nursery education. He added—we have been making the point for years—that the United Kingdom compares poorly with the rest of Europe in terms of child care, with only half our three to four-year-olds in nursery education, compared with 99 per cent. provision in France and 96 per cent. provision in Belgium.

On the one hand, we can see the ambivalence of different Secretaries of State, Ministers of State and Government Departments about nursery education and women at work, but the Chief Secretary to the Treasury gave the game away when he said that the provision of public services sapped parental responsibility. He was saying that any public provision somehow confiscates the responsibility of parents, but he failed to recognise that, with the help of proper public provision of child care services, many parents who want to go out to work but who 769 are at the moment stuck on benefit and living on income support could be financially responsible for themselves and their children if child care provision was available.

The Chief Secretary was in effect saying, "They're your children; you had them, so you look after them. They are absolutely nothing to do with us." We believe that, of course, children are primarily the responsibility of their parents—no one would have it any other way—but the community as a whole has an interest in the well-being of our children and their preparation for adult life.

We all have an interest in children growing up to be adults who are, in the Prime Minister's words, "at ease" with themselves and able to take on adult responsibilities. The Government's attitude—"They're your children; they are nothing to do with us, so why are you even asking us about child care?"—is short-sighted.

When the Government have reluctantly taken action on child care, it has always been characterised by two features: it has been short-term—"here today, gone tomorrow" initiatives—and fragmented. We need not pump priming but a long-term strategy. When the Government have been pressed and felt it necessary to issue a press statement on child care, they have set up a pump-priming initiative.

I do not know whether hon. Members remember the under-fives initiative set up in the 1980s, which was to last for two years. What happened to it? In the 1990s, grants via training and enterprise councils seem to be the fashionable way of affording the Government the opportunity to issue a press release, but there is no long-term strategy to deliver a national child care programme. What is lacking is not pump priming but a long-term strategy.

Child care should be regarded as part of the economic infrastructure, as important in getting women to work as the roads and railways on which they travel to work. Like other infrastructure projects, child care needs a long-term, strategic approach. Such an approach would match not only the demands of the economy but those of parents. Although the patterns of women's employment may be fragmented and changing, the needs and demands of their children are not. Their children need continuity and certainty.

If a mother gets a training place for six months, it is not good enough to offer her child care for six months at the local TEC. The child will just be settling in when it will be time for the mother to take him out of the nursery because she is looking for a job. She will have to make temporary arrangements for the child while looking for work and, if she gets a job, she will have to make other arrangements for the child to be cared for while she is at work. If she is on one of the increasing number of short-term contracts, what will happen to her child care when the contract comes to an end?

There is no set pattern for women's employment. The fact that women now form half of the work force does not mean that they are working according to the pattern to which men used to work. A woman might work full-time or part-time; she might be out of the labour market for a while and then retrain and return to part-time work and then to full-time work. The point is that, although a mother's pattern of employment might be changing and 770 fragmented, her child needs continuity and certainty, and child care cannot be fragmented to mirror the fragmentation of the new labour market.

Does the Minister believe that child care is part of the economic infrastructure and not a matter for individual parents, or does he believe that it is a private matter that can be left to parents alone?

Mr. David Willetts (Havant)

The hon. Lady says that she does not want a fragmentation of the labour market, with women moving from one job to another leading to their child care also being fragmented. Why, therefore, is she advocating a change that specifically ties tax relief to the place of employment?

Ms Harman

The hon. Gentleman has not read the new clause carefully enough. It would also provide more favourable tax treatment for employers who undertake joint ventures with local authorities. We have greatly welcomed that growing trend, which Labour councils have pioneered.

For example, when giving planning permission for a new Sainsbury store to be built, the council and the company embark on a joint venture to build a nursery there. When that happens, we believe that the employer should get the same tax relief on the nursery buildings that it would have received had they been a warehouse or factory.

We are making two points. First, there is not enough child care. We need more, and we want to encourage it wherever we can. Secondly, we have to ensure that it is of high quality and embodies certainty and continuity.

Does the Minister believe that child care is an economic issue about which his team is concerned, or does he believe that it is solely a private matter that can be left to parents?

Mr. Dorrell

I am happy to respond to the hon. Lady. Of course it is true that child care is an economic issue, and I should like the hon. Lady to expand a little on that point. She said that we need a national child care strategy, and her hon. Friends support that proposition. Is she committing her party to a such a strategy? If so, would she be responsible for it, or would the shadow Department for Education? If she were to be responsible for a national child care strategy, what would be its shape?

Ms Harman

We have made it clear that we believe that working parents with young children should have a choice of child care. We also believe that the Government have a role to play—they must take the lead. I shall deal with the Minister's point a little later.

We certainly do not think that child care provision is entirely a matter for public finance, although it is a crucial aspect of public policy. It is not only the Government who will foot the bill, although they must play their part. The Government must take a lead in galvanising the willingness of parents to chip in and pay some of the cost and to galvanise the willingness of employers to invest.

There is a readiness to act, but the Government must take a lead to ensure that we have a national child care strategy. The Minister should examine what Labour councils have been able to do, and I shall deal in a moment with what the Government are saying about council provision.

Mr. Dorrell

The hon. Lady has conceded that child care provision is not purely a matter of public finance. I therefore do not understand why she is dismissive of 771 developments in the infrastructure of child care in the private sector, such as private registered day nurseries. Why is she so dismissive if she accepts that child care does not have to be wholly publicly funded?

Ms Harman

I am not dismissive of the increase in child care over the past 10 years, but I am making two points. First, the increase in child care has in no way matched the increase in the number of young children whose mothers are at work, what we call the "child care gap". Secondly, parents do not have a real choice of child care, often having to go for the cheapest option. That is why I believe that there should be a public policy on child care, and a national child care strategy. It is not good enough for the Minister to conclude that there appear to be more child minders, so everything must be fine. "Look," he says, "there appear to be more private day nurseries, so there we are, it is all happening."

The important fact is that we do not have a proper strategy that ensures choice and high-quality affordable child care.

Mr. Dorrell

indicated dissent.

Ms Harman

The Minister appears to think that the Government do have a strategy. He clearly does not understand that, all over the country, working mothers, who are doing a good job, contributing to the economy and to their family budgets, are tearing their hair out because of the lack of child care provision, and because of the expense and the variable quality of the care that is available.

As the Prime Minister hesitatingly acknowledged last December, in other European countries Governments have recognised the importance of child care and nursery provision. But Britain is at the bottom of the European nursery league table. Why should Britain's children be Europe's poor relations? I should like the Minister to respond on that point.

The Minister said that he believed that there was a strategy, and that the Government recognised that child care is part of the economic infrastructure. I am delighted to know that he thinks that there is a strategy. Perhaps he would discuss it with some of his colleagues in other Departments.

I have addressed several parliamentary questions to all the Departments, and when we put all the answers together, it becomes clear that there is no coherent strategy. There is inadequate information about how much money is spent on child care and nurseries, and about the number of places. I asked all Departments to make statements both about child care for their own staff and about the contributions they make to other child care and nursery services.

The Department for Education, which is responsible for nursery education, said nothing about its strategy. The Department of the Environment, which provides resources to local authorities for under-fives provision and out-of-school care, said nothing whatever about child care strategy. The Department of Employment, which provides resources for out-of-school care, could not say anything about a child care strategy, either. The Department of Health, which has overall responsibility for child care, said nothing about the importance of child care for working parents.

Four of the Departments that provide child care for their own staff—the Departments of Health, of the 772 Environment, and of Employment, and the Treasury—said nothing about the strategy behind that provision. Clearly it is tacked on, with no coherence.

There is also a lack of information about what spending there is, and what it contributes to. The Department for Education does not know how much local education authorities spend in total on the under-fives. That is extraordinary. The Department of Health does not know how much local authorities spend on child care for the under-fives. The Department of the Environment knows how much is given to local authorities but not how much is spent, and the Department of Health does not know how much is spent on nursery provision in the national health service.

There is also a lack of information about child care places. The Department of Health could not provide overall figures for child care provision, because the figures for day care and for nursery schools and nursery classes are collected on a different basis. The Department of the Environment did not know how many child care places were provided by local authorities.

The Department for Education provided figures for under-fives in nursery and primary schools, but of course those include the rising-fives, who are already in full-time schooling. The Department does not provide figures for under-fives in nursery schools and classes. The Department of Health does not know how many child care places there are for NHS employees.

Mr. Nigel Spearing (Newham, South)

Is my hon. Friend aware that this morning I received a written answer from the Department for Education about the statistics for provision for the under-fives? That answer, which is recorded at column 379 of yesterday's Hansard, admits that, on the due date, there could be double counting of children who may attend both playgroups and nursery classes during the same year. So the statistics that the Secretary of State for Education constantly bandies around are open to question.

Ms Harman

Yes, I noted my hon. Friend's question, and the information he received in reply to it makes an important contribution to the debate. It proves that there is no determination to find out what is going on, what is working and what is not working, so as to build on best practice and take things forward. The Government seem to be collecting whatever figures they can to show themselves in the best possible light, without any concern about what is really happening on the ground, and whether that represents a proper national child care strategy.

The situation is a shambles. Working mothers and their children are being let down, and the child care deficit is growing all the time. Since 1984, there has been an increase of more than 600,000 in the number of children under five whose mothers go out to work. Yet during those 10 years, there has been an increase of less than 300,000 in places with nurseries, child minders and playgroups; and, as hon. Members will know, much of the provision counted in with the 300,000 extra places is not provision for working parents.

Playgroups provide an invaluable service, but most people recognise that many cannot be counted as child care for working parents. The same goes for nursery education. Nursery education is vital, and we want all parents who feel that their child can benefit from it to have a chance of a place in a nursery school or nursery class for that child. 773 However, such places often cannot constitute child care for working parents. The official increase of 300,000 over-estimates the increase in provision for working parents.

Many more mothers, especially lone mothers, would come off benefit and go out to work if child care were available. But the increase in child care nowhere near matches the increase in the number of mothers already going out to work, let alone the number who want to work but are prevented from doing so by the lack of child care.

The Government's own figures show that 90 per cent. of lone parents currently out of work, who are claiming benefit and bringing up their children on income support, want to go out to work, but lack of child care is a major obstacle for them. If we examine the map of participation of lone parents in the work force and the map of child care provision, we see that, in the countries that have developed child care, there is much more participation of lone parents in the work force.

Instead of Ministers moaning about single parents claiming benefits, let them listen to the demands of single parents. Single parents want to go out to work and to be able to provide for themselves and their families, but the lack of a Government national child care strategy prevents them from doing so and keeps them in forced dependency, bringing up their children on the breadline.

It is not only the Labour party and other such organisations that recognise the child care gap, and the importance, both present and future, of child care. Howard Davies, the director general of the Confederation of British Industry, speaking at an employers' conference called Working for Child Care, described the position accurately: Clearly, the demand for affordable, good quality childcare is greater today even than it was at the beginning of the 1980s. It is a demand which is not being met by the current supply of child care provision.

Sometimes, the Government say that there has been a great increase in council provision of nursery education, so everything must be fine. However, we should recognise that, in so far as we ever hear Ministers boasting about nursery schools and classes, they are talking about Labour councils, which provide nursery places not because of the Government but in spite of them. The Government continually claim the credit for the child care and nursery provision that exists, but it is Labour councils that should receive that credit. Conservative councils have followed the Government's lead and lagged far behind.

According to Government figures, of the 40 best local education authorities in providing places in nursery schools and classes, 34 are Labour, just two are Conservative, one is Liberal and three have no overall control. The message is absolutely clear: on the ground, local Labour councils are working with employers to provide more nursery places, they are providing more nursery education schools and classes, and they are trying to help. Without the Government taking a lead, it is difficult, and is bound to remain patchy.

Against the background of a growing child care gap, the very least that the Government could do is seriously examine the anomalous treatment of employers who provide workplace nurseries or enter into joint ventures with councils to provide workplace nurseries.

The system works as follows: the Capital Allowances Act 1990 makes a distinction between capital expenditure 774 on plant and equipment and capital expenditure on buildings. All companies are allowed to claim capital allowances on plant and equipment, no matter what sort of employer they are—shop, office, warehouse or factory.

That means, among other things, that any expenditure they incur for fixed equipment associated with nurseries is allowable against tax. On the other hand, expenditure on buildings is covered by a different set of rules. The industrial buildings allowance is restricted, as the name suggests, to factories and warehouses. Other types of premises, principally offices and shops—where women are largely employed—receive no allowance at all against corporation tax.

That distinction also applies to premises built to provide workplace nurseries. Therefore, workplace nurseries attached to industrial buildings qualify for the buildings allowances, but those attached to other types of building do not. Capital expenditure falling under the Capital Allowances Act is deemed to include investment not only in wholly owned ventures but in joint projects. The tax rules that I have described therefore also apply to instances when companies enter into agreements to provide workplace nurseries, either with other companies or with local authorities.

It is clearly anomalous that employers whose businesses are based in offices or shops and who wish to provide workplace nurseries should receive less favourable treatment than industrial employers when providing nurseries for their employees. Obviously, there is a more general argument about the need to discourage excessive office building, but it cannot reasonably be applied to a situation in which either an office building already exists or where the decision to build has already been made and the question is whether a workplace nursery should be included.

The tax rules already provide one exception—for company sports and recreational clubs which qualify for the industrial buildings allowance even when they are attached to an office or a shop, irrespective of the nature of the employer's business. Women who work in offices and shops will think that it is wrong that, if their employer provided them with a workplace nursery, they could not claim tax relief against the buildings, whereas, if they worked in a warehouse or a factory, they could.

Certainly, women who work in offices and shops and who realise that the buildings qualify for tax relief if their employer provides sports facilities, but not if their employers provide nursery facilities, will think that it is wrong. It only leaves us all wondering why sports facilities qualify for tax relief and workplace nurseries do not. I hope that it is not because there is more interest among men in sports and more interest among women in child care.

Our new clause simply extends the industrial buildings allowance to all companies which invest in workplace nurseries, either on their own or jointly with councils. That will provide an incentive to employers to construct their own workplace nurseries, to go in with other companies to provide joint nurseries, or to enter into partnership with local authorities to extend provision for child care.

The new clause has attracted the support of the employers' organisation Employers for Childcare, which has said that the different treatment in tax relief of sports facilities and workplace nurseries and of shops and offices as opposed to industries and factory premises was another example of the inconsistency which exists in the field of childcare provision … It is a further demonstration of the need 775 for the Government to undertake a full review of the situation in Britain today. Employers for Childcare believe that this is an essential first step in developing a coherent national strategy to offer accessible, available, affordable, quality childcare services for all.

I should like to hear the Minister tell us how the Government justify those anomalies. How can they allow tax relief for sports clubs, but not for nurseries? How can they justify relief for nurseries attached to factories and warehouses, but not for nurseries attached to offices and shops?

5.15 pm

The new clause is merely a probing clause, but it probes an important point. The Government have a history of tax treatment in child care. For many years, we argued that taxation should not be in the hands of the employee for the employer's contribution to workplace nurseries. When that issue arose in the House of Commons in 1989, the then Chief Secretary to the Treasury, the right hon. Member for Kingston upon Thames (Mr. Lamont), said, putting the straightforward, free-market view: if married women want to work and if employers want to employ them, the market will work and employers will pay the necessary wage to encourage married women to return to work."—[Official Report, 11 July 1989; Vol. 156, c. 892.] However, a year or so later, the Prime Minister, who was then Chancellor, slightly changed his mind when he said: I have decided to exempt the value of workplace nurseries and playgroups from taxation as a benefit in kind."—[Official Report, 20 March 1990; Vol. 169, c. 1023.] He said that it was a small, but important, supply-side measure.

Although we shall vote on the new clause, unfortunately we do not necessarily expect the Government immediately to see the light, but we are hopeful that as the arguments are put the penny will drop and the Government will recognise it as an important public policy issue.

Women's entry into the labour market and the new family patterns needs to be recognised in public policy. The demands of the economy and of working mothers are the same. We need a national child care strategy that aims to see that parents have a choice of provision—child minders and nurseries for pre-school age children and provision for school-age children.

Not all the investment in child care needs to come from the Government. Employers and parents may play their part, as will local councils. Unless the Government take a lead, it simply will not happen.

Mr. Willetts

The hon. Member for Peckham (Ms Harman) speaks rather more confidently and certainly at greater length on child care than she does on taxation. Her speech concerned a subject with which she appeared to have rather more familiarity than the subjects that she addressed in her performances in Standing Committee.

The principle of greater choice and diversity in child care is one that, of course, we on the Conservative Benches completely support. I should like to draw the attention of the House to some of the practical problems in the approach set out by the hon. Lady.

I thought that the Labour party had some concern about the distribution of income and wealth. One of the great difficulties in trying to provide extra tax relief for working women is that, by and large, it would benefit two-earner couples. We cannot speak with enormous confidence about 776 patterns of income in the country, but one thing of which we may be sure is that, by and large, two-earner couples are not at the lower end of the income scale.

Ms Eagle

Does the hon. Gentleman recognise that new clause 1 deals with capital allowances and that my hon. Friend the Member for Peckham (Ms Harman) was talking about the provision of child care, not tax relief for child care?

Mr. Willetts

The speech of the hon. Member for Peckham covered most aspects of child care. The new clause specifically concerns capital allowances, but the hon. Lady ranged widely in her comments and I do not see why Conservative Members should not range as widely.

Assistance that is focused especially on working women is likely to be of particular benefit to two-earner families, who, generally, are not at the bottom of the income scale. Poverty among families is concentrated in one-earner or zero-earner couples. They are unlikely to be the families that will benefit from the measures that have been set out by the hon. Member for Peckham.

That outcome seems not to interest the Labour party, which is supposed to be especially concerned—we are used to its ritual denunciations—about widening gaps in the income scale. Its lack of interest is rather odd.

The argument of the hon. Member for Peckham seems to rest on the assumption that the only women who have an interest in child care are those who want to go out to work. It is equally important that women who are working but not in paid work—those who are at home with their children in one-earner families—should be entitled to benefit. That argument is even stronger, of course, for zero-earner families. The new clause is remarkably narrowly focused on families that are likely to be at the upper end of the earning scale.

It is strange that a significant measure which was announced by my right hon. and learned Friend the Chancellor of the Exchequer in his Budget statement has not been referred to by the hon. Lady. That, of course, is the extension of family credit to provide a new disregard to help single parents especially, but other low-income working families as well, with their child care costs.

Ms Hilary Armstrong (Durham, North-West)

Does the hon. Gentleman acknowledge what was acknowledged eventually in parliamentary responses from Ministers, which is that the poorest people on family credit will not benefit from the Government's proposals? That is because they already receive the full amount of family credit. People will be able to receive the benefit that he is talking about only if they are currently receiving an extremely small amount of family credit and can therefore reach the maximum by claiming the extra benefit. There will be nothing like the quality of benefit that the Chancellor hinted at when he presented his Budget. As the facts have emerged, it is clear that very few people will benefit, and only those who are at the bottom of family credit.

Mr. Willetts

I am surprised by that intervention. There will be a disregard for costs incurred in buying child care.

Mr. Dorrell

My hon. Friend is right to be surprised by the argument advanced by the hon. Member for Durham, North-West (Ms Armstrong) because she is wrong. The fact is that 150,000 families will gain as a result of the 777 change announced by my right hon. and learned Friend the Chancellor on Budget day. I cannot believe that even the hon. Lady regards that as an insignificant number.

Ms Armstrong

The gain will be fragmented.

Mr. Dorrell

The hon. Lady might describe it as fragmented, but it will be targeted—that is the word that I would use—at those who need assistance.

Mr. Willetts

I am grateful to my hon. Friend for his intervention.

There will be a disregard for the costs of child care, which will help many of the families in receipt of family credit. It is particularly well targeted because it will help low-income working families. One of the ironies of family credit is that the beneficiaries generally fall into two categories, which may be at the opposite ends of the spectrum of family life styles. One of the main groups of beneficiaries is single parents who have low incomes but are in work. They will benefit, as my right hon. and learned Friend the Chancellor made clear in his Budget statement.

The other significant group of recipients of family credit is one-earner working families where the mother is not in work but is likely to be at home looking after the children. They similarly will benefit from the assistance. It seems to be well targeted in terms of income and tolerant of the diversity of families.

Ms Harman

Will the hon. Gentleman recognise that, even if the Government's target is met and about 50,000 women who are now on income support go out to work and claim family credit, there will be many more low-paid women who as a result of the tax changes set out in the past two Budgets will find themselves out of work and on income support? That will happen because tax increases, by virtue of the freezing of personal allowances and the freezing and cutting of other allowances—and especially increased national insurance contributions—make it more expensive for people to go out to work. That will hit low-paid women, many of whom will find that it is no longer worth their while to go out to work. They will find instead that they are better off on benefits. The hon. Gentleman is talking about those women who will go off benefits and enter the labour market, but will he recognise that probably double their number will go out of work because of tax increases and will return to benefits?

Mr. Willetts

The hon. Lady is assuming that many women go out to work only if their income is entirely exempt from taxation and national insurance contributions. Surely that is not a reasonable basis on which to plan any sensible approach to taxation. She is saying that as soon as they find themselves brought within the income tax net they will find that they no longer have an incentive to go to work.

One of the difficulties of financing public expenditure with taxation is that tax increases bring more people into the tax net. I accept that that is a consequence of the measures that were announced in the Budget. The alternative—not taking measures to reduce the public sector borrowing requirement—would have been far worse.

I move on to another approach to the proposals set out in new clause 1 and in the new clauses that have been tabled by Liberal Democrat Members. The hon. Member 778 for Peckham said that a large amount of child care is informal: much of it is provided by relatives and friends. The statistics are dramatic. They show that 65 per cent. of mothers in full-time work use as their main provider of child care the husband, the grandparents or other relations. It seems that 87 per cent. of mothers in part-time work choose above all members of the family to provide child care.

We all know about the painful and difficult negotiations that are involved. We suddenly become remarkably keen on our in-laws. We find ourselves negotiating complicated arrangements to try to get child care help provided. It is not fair to regard it as evidence that everyone would rather have formal, institutionalised child care provided by the employer or in another structured setting, and that we have informal arrangements because of the failure of individuals to obtain the institutional arrangements that they would prefer.

On the contrary, informal arrangements are often the pattern of child care which people prefer and with which they are comfortable. There is some interesting evidence from America. As part of their programme to help single parents, especially, into work, and as a result of the greater diversity of approach that is now permitted by federal legislation on programmes for single parents, some states have set up large funds that are aimed at helping single parents to purchase child care when they return to work. They have found that the funds are not being drawn on to the extent that they expected. That is because, lo and behold, single parents in America prefer to negotiate informal arrangements with their neighbours or with relatives wherever possible rather than rely on institutional provision.

The trouble with the new clauses is that they all favour institutionalised and formal rather than non-institutionalised and informal patterns of child care. I do not believe that that approach matches the preference of most parents in this country.

Ms Eagle

The hon. Gentleman seems to be saying that those who are lower down the income scale prefer their mothers or grandmothers to look after their children in an informal way. Presumably those who are high up the income scale and use a very institutional form of child care that is known as the public school are allowed to get away with that approach. Indeed, it is seen as a good thing. How can the hon. Gentleman account for the difference in his analysis of the social classes?

Mr. Willetts

I do not regard that intervention as a serious contribution to the debate; I hoped for something more serious from the hon. Lady.

I shall turn to another aspect of the debate. The measures proposed by the Opposition parties are entirely concerned with the demand for child care rather than the obstacles to supplying it. They are entirely concerned with trying to lower the cost for employers of providing child care or, in the case of the Liberal Democrats, to assist people to buy child care.

There is another more important aspect—the regulatory burdens under which the providers of child care find themselves. I shall quote from the experience of one lady who was trying to open a new nursery. This is an account of what she had to go through when she was opening the nursery: When I was setting up my nursery school it took 6 months for the Social Worker to come and see me. She made it quite clear 779 that the state should provide. She encouraged the two local play-groups in neighbouring villages to object to planning permission on the grounds that I would take children from them. She said only mothers with cars would be able to come as my village is small and isolated. She insisted that I must have water play and sand inside. I do think they are both important but it is not easy in a house and I have a sand pit outside and I told her that most of my children had … plenty of water play with mothers who played with them. She wanted more dressing up clothes and to stipulate what toys I should have.

5.30 pm

Of course, we would love to have ideal child care. We could all sit around in committees—people sat around in committees during preparation of the Children Act 1989 and the regulations that followed—trying to design ideal child care. However, the problem with designing regulations which are intended to set out a picture of the ideal is that it makes it more difficult for new providers to enter the market.

I hope that, as part of the Government's deregulation initiative, the way in which some overprotective local authorities interpret the regulations made under the Children Act, making it more difficult for new entrants to supply child care, will be examined. I also hope that local authorities—often they are left-wing Labour-controlled local authorities—which seem to be averse to granting planning permission to anyone who applies for a change of use to set up a nursery or child-care facility will be more tolerant. Instead of perpetually debating finance arrangements in the form of tax breaks or subsidies, we should also examine the obstacles that have been erected by successive Governments and local authorities which stand in the way of increasing the supply of child care.

Finally, I shall consider a few other aspects of help for child care that are focused particularly on the employer and the workplace. The book written by the hon. Member for Peckham, "20th Century Man: 21st Century woman: How both sexes can bridge the century gap"—

Ms Harman

You are in the 18th century.

Mr. Willetts

I am sorry that the hon. Lady thinks that I am in the 18th century; that is harsh, especially as I was about to say that the book is interesting. I was not proposing to descend to the same level as the hon. Lady.

The hon. Lady's analysis is interesting. She makes some valid points about the changes in the role of the sexes. No man can look at the figures that show that 75 per cent. of all divorces are initiated by women and the figures that show the amount of help that men give around the house without feeling a certain amount of guilt. The hon. Lady's analysis is interesting. In her book, she briefly discusses the question of employer-based and employer-financed child care. It is a carefully even-handed discussion. She describes some of the advantages of such child care. I quote: The advantage to the employer is that it creates an incentive for staff to stay. Parents will not want to move their child from the nursery unless absolutely necessary. Although that is cited as an advantage, it seems to be an argument that cuts both ways. There are many parents who are worried about putting themselves in a position of greater dependence on their employer, as the hon. Lady appeared to recognise in her speech.

The hon. Lady goes on to discuss the disadvantages of such child care. I quote: Travelling to and from work in the rush hour with a young child is often difficult particularly in big cities. And children may prefer to be involved in local activities rather than far from home. 780 For the parents, the workplace nursery can seriously impair job mobility; some feel that it is more difficult to concentrate on their jobs knowing that their child is close at hand.

As the hon. Lady has set out those disadvantages so clearly in her book, it is odd that her only practical proposal to encourage child care is one which adds further tax relief to a pattern of child care that already does especially well under the tax system as a result of the concession in the 1990 Budget which ensures that the provision of workplace nurseries is not a benefit in kind for which the employee has any liability to tax. These patterns of provision already do well under the tax system. If workplace nurseries have not sprung up in a large number all around the country, that may tell us something about the preferences and views of parents. However, it should not be taken as evidence that the tax regime needs to be even more favourable.

Some of the rhetoric that we heard earlier about strategies and national programmes for child care did not seem to take as much account as it should have done of how parents lead their lives and their child care preferences for their children.

Mrs. Diana Maddock (Christchurch)

Decent child care should be a priority for all of us. It is something that we should be thinking about this year—the Year of the Family.

In this country, we have an extremely poor record with regard to child care, as has already been pointed out in the debate. Indeed, we have one of the worst records in Europe with only Portugal ranking below the United Kingdom in the provision of child care for the crucial pre-school years.

Obviously, the Liberal Democrats would like to see a wide variety of provision for children, especially those under five. We are concerned that the provision of child care must be increased. In response to the hon. Member for Havant (Mr. Willetts), let me say that we are discussing a Finance Bill, not an Education Bill.

Today, I shall talk about the new clauses that we have proposed, which extend the principle embodied in the Government's provisions for workplace nurseries. Our new clauses would widen the provision for employers to help with child care. There are some disadvantages to workplace nurseries. They are not always able to meet the needs of mothers at work, especially if they live a long way from their workplace. Regrettably, only a small fraction of child care is provided by workplace nurseries. Indeed, I regret that many workplace nurseries in London have closed down recently.

Child care vouchers are a method of administering a tax incentive and provide parents with maximum choice and flexibility. I know that during debates on previous Finance Bills there has been much discussion about the costs of the scheme. If our new clauses are passed today, many women will be able to return to work and the tax that they pay will have an effect on the total cost of the scheme. Indeed, increases in tax payments from parents who are able to return to work, together with contributions from employers and reductions associated with home-bound parents, can be shown to cover much of the increased child care costs that we are proposing. I hope that in the Year of the Family the Government will give a more sympathetic response than they have previously done.

In this country, we waste the talents and training of many women because there is no commitment to child care. Child care is one of the biggest problems for women when they wish to return to work after they have had 781 children. Women have often been trained with public money—one thinks particularly of nurses. Women have knowledge and skills which have been gained in previous jobs over a number of years but which are often lost to offices, schools and businesses because women cannot get the child care that they need in order to return to work.

Money spent on our proposals would reap returns for the public purse through tax, and also for our businesses because they would not lose the skills and knowledge that people have built up. Businesses give many benefits in kind to their employees which are not linked to the quality of work of their employees. Many of them have no general advantage in bringing people back into work. So why are the Government so opposed to an extension of their own scheme?

In addition, our proposals would enable small businesses in particular to keep the skills of employees who wish to return to work after having children. The current statutes discriminate against small offices and workplaces. We need a more flexible response to help with child care. In recent weeks we have heard a lot from the Government about the importance of nursery education, and I welcome the fact that the Government now believe in nursery education. As I said in the House last week, when I was a councillor in Southampton some years ago I was classed as subversive and left-wing because I thought that we ought to have nursery places at work.

Ms Eagle

Does the hon. Lady agree that Conservative concern about child care rarely translates into policy? When the former Prime Minister, now Baroness Thatcher, was at the Department of Education she was on record as saying that she would create what would be effectively a nationwide child care facility and nursery education facility. Yet 15 years of Conservative rule have brought us no nearer that desirable goal.

Mrs. Maddock

I wholeheartedly agree. It is extremely disappointing that we had a woman Prime Minister who we believed was committed to nursery education and yet many years later we are no further forward.

Mr. Simon Burns (Chelmsford)

Does the hon. Lady accept that after Baroness Thatcher made that commitment there were five years of a Labour Government, two years of which included the Lib-Lab pact, and nothing seemed to happen then on a national policy?

Mrs. Maddock

Is the hon. Gentleman saying that it is right to have gone on doing the same thing, if that was the case, for so many years?

5.45 pm

We have heard a lot of talk, but not an extra penny has ever been committed to those words. Today, in the Year of the Family, the Government have a chance to put some finance to those words and I hope that they will do so.

Mr. Matthew Carrington (Fulham)

I start my few remarks on the subject of child care not by declaring a formal interest, but by declaring a past interest. My wife works and we have a child. Since my wife returned to work, which she did shortly after giving birth, child care has been a continual problem. It is a problem for all families, whatever their level of income, where one or both parents work or where a lone parent works.

782 Child care is a continual difficulty, but it is not confined to pre-school time. It is a problem which goes on after school starts to a point well beyond that at which the child would no longer consider himself a child because in this day and age, unfortunately, it is not possible to leave even young adults alone for long periods without some degree of supervision and care. That care does not need to be of the professional level which is needed when the child is younger, but it should certainly ensure security, company and protection.

I feel strongly about child care, and all families need it. It is not only a problem for families where both parents work, or where a lone parent works. It is also a problem for those for whom work is not the cause of the need for child care. It is important at various times for children to be looked after by other people—if only for the continuing sanity of the parents. Parents must have what is known in the social services and care in community world as respite care. I suppose that it is not politically correct to say that parents need respite care from their children, but if most parents were honest they would admit that they do—if only to allow them to go out occasionally and to re-establish their relationship with each other.

Child care is very important. I suspect that there is unanimity across the House on that. It is even more important for the country because of the need to enable parents to get back to work and to contribute to the economy. There are obvious benefits in getting parents who are on low incomes off of benefit. It is also important when the parents have had a high level of training and have high skill levels. Those skills need to be used for the benefit of the community and the economy.

The importance of child care is not in dispute in the House. We all accept that we must ensure a diversity of available child care, which will become more important as our society develops. The need for child care is perhaps more important now than it was when I was young some 30 years ago, and it is getting more important as time goes by. If and when my daughter produces her family in the fullness of time, child care may be even more important for her.

Mr. Spearing

The whole House will agree with the hon. Gentleman that there should be diversity in child care, particularly for the under-fives, and last week the Secretary of State for Education agreed with me that there is a complementarity between playgroups and nursery education. In view of that, does the hon. Gentleman deplore—as I do—the fact that the Government have objected even to a debate in Standing Committee on the Nursery Education (Assessment of Need) Bill, which would reinsert elements of the Education Act 1944 taken out by the Government the hon. Gentleman supports?

Mr. Carrington

The hon. Gentleman will excuse me if I do not go into the details of education because, as he may know, I am involved in the Department for Education and I would not wish to prejudice that. There is a clear commitment on the part of the Government towards nursery education and its provision. The Government have always sought ways of delivering that commitment in ways that parents want.

Mr. Willetts

While we are on the subject, is my hon. Friend aware of the following interesting historical fact? It was the great reforming Liberal Government of 1906 who raised the school entry age; children had previously started 783 school at the age of three, but a Liberal measure raised the age of school entry to five on the argument that schooling for three and four year-olds was of poor quality. Should one therefore welcome the apparent shift in Liberal policy this century?

Mr. Carrington

I should be more than happy to bandy anecdotes with my hon. Friend about the Liberal Government of 1906, who in many ways were the architects of our misfortunes in the 20th century. However, with all respect to my hon. Friend, it seems to me that 1906 is a long time ago.

The debate should concentrate on how child care can best be provided and the best way of encouraging the right form of child care. It is apparent that no form of child care is appropriate in every case. That is something which the House has to consider. Some parents work normal working hours from 9am to 5pm in jobs which are fairly well regulated. They can conform to standard patterns of child care in a nursery which opens at a certain time in the morning and they can collect the child at a specific time in the afternoon.

Unfortunately, more and more patterns of work these days do not conform with the requirements of institutionalised child care. Parents, particularly working mothers, frequently find themselves working in the evenings. Parents who undertake work such as shop work may well find themselves working early in the morning or late in the evening, so one of the characteristics that has to be provided is a high degree of flexibility in the types of child care available to parents to choose from.

The needs of children, particularly young children, vary enormously from one child to another, and they vary much more in pre-school children than in children over the age of five. The emotional development of children below the age of five is much more varied—much more rapid in some children and much slower in others—than the development of children as they become more mature. The needs of older children are much more uniform. Again, that means that parents have to judge what type of care is needed for their child. Some children are happy to be left in institutions while others will need much more love and attention from someone who is less a teacher but more cuddly.

Mr. Burns

Does my hon. Friend agree that there is an important distinction between nursery education and creches or child care? Does he agree that all too often there is a confusion and that "nursery education" is used as an all-embracing term for the provision of child-minding facilities for working mothers when nursery education itself is a different proposition altogether?

Mr. Carrington

It is indeed a different proposition. My hon. Friend is right that education in that sense is by no means appropriate for all children, particularly at a very young age, when they need qualified and progressive emotional development which is not necessarily provided in an institutional education framework. Children frequently need more a framework of guided supervision or perhaps even child minding. There are many types of arrangement within which such care can be provided. I do not propose to describe all the variants, but I will give one example other than institutionalised child care.

Parents often get together as a group and provide someone to look after their children in a group in a way that suits them. Ideally, and in many cases, the person 784 employed in that way is professionally qualified to look after children. That is very much to be encouraged. Child care by people who have nursery nursing qualifications is to be highly recommended and encouraged, and it is frequently provided outside the institutional framework.

What worries me about the new clauses is that a bias is being introduced in the tax system in favour of institutionalised child care—[Interruption.] If the hon. Member for Durham, North-West (Ms Armstrong) wishes to intervene, she is welcome to do so. I would rather she did that than that she should shout.

Ms Hilary Armstrong (Durham, North-West)

I was suggesting that the hon. Gentleman might think about changing his language. Not all collective care is institutionalised. In the English language the word "institutionalised" has a negative aspect. I assure the hon. Gentleman that much nursery education and nursery provision is far from negatively institutionalised, but is good collective child care and nursery education.

Mr. Carrington

I am sorry that the hon. Lady finds the word "institution" derogatory—

Ms Armstrong

The word "institutionalised".

Mr. Carrington

Or "institutionalised". As a Conservative, I strongly believe in the institutions of Britain and the institutionalisation of elements of this country. It is sad that the hon. Lady feels that the word has negative connotations. I believe that we have many fine institutions, and I suspect that many child care institutions are very fine. I would rather encourage institutions, but if the hon. Lady would prefer me not to use that word, in the interests of harmony across the Chamber I will use another word.

Mr. Irvine Patnick (Sheffield, Hallam)

My hon. Friend is too nice to the Opposition.

Mr. Carrington

My hon. Friend is right. I am sometimes too indulgent to the Opposition.

Child care organised by people other than the parents has a place and is appropriate, but I doubt whether it should be encouraged over and above child care organised by parents for the benefit of their children. What worries me about the new clauses is that the taxation system would be structured in such as way as to favour one type of child care over another. That seems inherently undesirable.

My hon. Friend the Member for Havant (Mr. Willetts) read out from the book of the hon. Member for Peckham (Ms Harman) the criticisms of workplace nurseries. Those criticisms are right. Particularly in London, workplace nurseries are often inappropriate, if only because most workers commute some distance to work. Travelling with a small child on the underground or on buses in London in the rush hour is extremely difficult and certainly not to be encouraged. I therefore had reservations when my hon. Friends introduced in the Finance Bill of 1990 provisions on workplace nurseries in preference to support for other types of child care, and I should be reluctant to see that move encouraged still further by new clause 1.

I was intrigued and somewhat attracted, however, by the possibility of vouchers in new clause 6. Vouchers have been rumbling around in political theory for a great many years and have considerable attractions, but they have always been found to be difficult to implement in practice because of the administrative complexity of such a system. 785 My anxiety about new clause 6 is the one which I am afraid also applies to capital allowances for providing nursery care. The measure proposed in new clause 6 is indiscriminate. If we are to support people who cannot otherwise make provision for their children, the money will inevitably come from scarce resources. The money would be better given to people who need it more.

To take my own case as an example, my wife and I both work and we are capable of making financial provision for child care, so it would be wrong for either or both of us to receive vouchers to pay for child care. I suspect, however, that new clause 6 would provide for both parents to receive vouchers. If any money is to come out of the tax system for child care, it should go to those people who cannot afford to provide for child care themselves.

Equally, money for child care should not be concentrated on the employer. That is the problem with new clause 1. If money from the tax system is to be given to anyone to provide child care, it should go to parents who need assistance to get themselves back into work or to provide proper care for their children other than straight child minding, which is frequently of a questionable nature.

Taxation support for child care must be targeted on the people who need it—parents who cannot provide for such care out of their own resources, but who can be encouraged back to work with a little help from the state. That is why the provisions made in the Budget last November were the right way forward, rather than any attempt to extend tax reliefs which, by definition, probably give help to those who need it least. We must get the relief to those people who do not pay tax.

Ms Eagle

The hon. Gentleman makes the same slip as his hon. Friend the Member for Havant (Mr. Willetts). New clause 1 deals with capital reliefs, not income tax reliefs, for the use of workplace nurseries.

Mr. Carrington

The hon. Lady is mistaken. I do not make that mistake. Capital reliefs come off the corporation tax paid by companies providing nursery places, so the relief is targeted on the company rather than the employee. But inevitably all employees may benefit: from the managing director, who may be highly paid, down to the less highly paid—they will all be paid, as they are all employees.

Ms Dawn Primarolo (Bristol, South)

Can the hon. Gentleman therefore explain why, when employers give their employees health benefits through a private health scheme, it is deductible from corporation tax? The Government have not closed that loophole, but the hon. Gentleman advances the case against child care being treated according to the same principle.

Mr. Carrington

The argument is straightforward: if a company gives private medical insurance to an employee, it is not taxed but the employee is taxed.

Ms Primarolo

That is not true.

Mr. Carrington

I will give way to the hon. Lady again.

Ms Primarolo

I am sorry, but I must correct the hon. Gentleman. Companies which give private health insurance to their employees as a fringe benefit are able to offset the cost against corporation tax. It is true that the employee has a tax liability as a result, but the company benefits. The hon. Gentleman is arguing against that happening with child care.

Mr. Carrington

The hon. Lady is repeating what I told her. Of course the company can offset the cost against corporation tax, but that merely avoids double taxation because the employee pays tax on the benefit—probably at a higher rate than the company would have done. We are talking here about a benefit that would be given to employees without their being taxed on it. Companies would get a deduction, but that is not my objection.

Mr. Dorrell

My hon. Friend might like to know that there is no difference between the treatment, for corporation tax purposes, of expenses currently incurred by a company when providing health benefits to employees and those incurred when providing child care facilities for them. They are precisely analogous cases and are dealt with in the same way under the corporation tax regime.

Ms Primarolo

The Minister should tell his hon. Friend, not me. He is arguing the wrong case.

Mr. Dorrell

I am telling the hon. Lady.

Mr. Carrington

The difference comes down to the treatment of the employee, which is what I was saying. Employees are taxed on premiums paid for private health insurance whereas under new clause 1 they would not be taxed on child care costs. That seems wrong as it would benefit people who do not need that help—the more highly paid rather than those on lower wages.

We need to place the money that we are giving to encourage child care in the hands of those parents who need it, so that they can be encouraged to provide the type of child care from which their children will benefit most, meet their circumstances and needs in terms of the amount and hours required, and encourage people back into the economy. We must not target it on people who would return to work of their own accord because they can afford to do so, but on those who need a little incentive to return to work. That is proper use of the taxation system.

I am always deeply suspicious of grand strategic plans of any sort, so I am not sure whether we should have one for child care. Parents are the best people to decide what care is right for their children. If we are to have distortions within the taxation system, they should best be used to encourage people back to work who would earn very low wages or who are on benefit. We should probably use the benefit system to get those people back to work, as we did in the Budget.

Ms Armstrong

I was interested to hear the contributions from the hon. Members for Havant (Mr. Willetts) and for Fulham (Mr. Carrington) but I was most disappointed with that of the former. We were given to understand that he was the intellectual force behind Conservative policies on the family and children, which shows what a desperate state that policy is in.

Today's debate comes hot on the heels of our debate on family policy last week and it is impossible to separate the two. We are debating child care within the context of the Finance Bill because we are anxious to make the 787 Government think seriously, at every possible step, about the way in which policies are undermining our economic future and the future for families.

Because today's debate is on the Finance Bill, it highlights the fact that a child care strategy is central to the economic future of the country. Everyone talks about a more flexible work force—one that is able to respond to the needs of the next century. Opposition Members would say that that is important, but that we will create enormous problems if we develop such a work force at the expense of children.

Children live in a much more dangerous and complex world than the world in which we lived when we were growing up. We were simply not aware of many of the challenges, fears and threats that they have to face. We cannot even imagine the complexities of relationships and negotiations that they will have to steer themselves through. That is why their experience—whatever their family and wherever they are based—is a critical aspect of both social and economic policy.

Whatever the Government may wish, women go out to work. Three years ago many Conservative Members would have told us that that was wrong and that they did not want it to happen.

Mr. Dorrell

indicated dissent.

Ms Armstrong

The Minister shakes his head but I think that I have sat through every debate on child care since I came to the House in 1987—I accept that that is not a long time—and I could name the Conservative Members who are uncomfortable with, and resisted, women going out to work. They are not all here today, but I suspect that they would still resist it.

Whatever the Government or any hon. Member want, women are working. Many do so because it is an absolute necessity and what their family requires. In my constituency, many work because there is no work for men—no work that they would he accepted for or that they are taking up. Because women are largely responsible for child care, it is critical that we know what we are going to do about it.

Some hon. Members have got themselves into a dreadful mess over the difference between nursery education and child care and all the rest. It is clear. Of course children have individual needs, but all children have intellectual, social and emotional needs that must be met in whatever setting they are—whether they are with a child minder, in a day nursery or in full-time care. I hope that in his reply the Minister will not insult the House with the statistics that are usually peddled from the Conservative Benches about the number of children who receive care. We all know that none of us should take those statistics seriously.

It is true that 90 per cent. of the under-fives may be with a person other than their parent at some stage in the week, but that does not mean that they are in care that lasts for any period. Children who are in a playgroup for one session of an hour are included in the statistics. That is not the child care and nursery education that we are so serious about, and that is not being serious about the needs of those children or the needs of parents.

Many parents want their children to be with child minders when they are very young. The important thing is that those child minders are supported and that they have the opportunity to speak to other child minders. They 788 should have the opportunity, perhaps, to go to a local nursery, where the children can be with other children for an hour or so while the child minders think their way through the ways in which they can improve themselves as child minders and the ways in which they can give a better service. That is happening, but only in small areas of the country. In many rural areas, opportunities for women and for child care are minimal, as the recent report of the Development Commission clearly showed.

When I was working, before the general election, on the shape of a potential child care strategy, I was taken by the number of employers' organisations that were springing up and coming to me saying, "For goodness' sake, let us work in partnership. We want to do things, but our expertise is not child care and we do not want to set up, or become involved with, ventures that will not provide the highest quality care for children. We do not want to get the blame if something goes wrong."

Ms Eagle

Does my hon. Friend agree that, as a result of the recession, often some of the good teams to provide child care that have been set up by companies to help women advance in their structures are cut if the firm gets into financial difficulty, so that the services that those firms provide are unstable and likely to disappear if the firm experiences difficulties?

Ms Armstrong

My hon. Friend tries to take me too far ahead.

Those employers were mainly saying that, rather than setting up their own facilities, they wanted to enter into partnership with the public sector in their locality so that they could offer choice and opportunity to parents. There are some very good schemes of that nature.

I bring to the attention of the Minister again the scheme in north Tyneside, which has been established in full co-operation with local employers and with the Government. The Government have used the north Tyneside scheme for, I think, eight workplace nurseries in their own facilities. That scheme has enabled employers to consider the parents' needs. They have spoken to their employees and found out the different types of child care that they would like.

The north Tyneside scheme has supported the whole range of child care—all-day child care, nursery education, child minders and child minders in the parent's home, who are called nannies in the south of England. It provides, first and foremost, quality care wherever the child is placed and, secondly, the real opportunity of choice. That has not placed additional cost on the public purse because it has linked the public commitment and the public child care strategy for that borough to the needs of employers and their employees in a way that has increased opportunity throughout.

I say to the hon. Member for Havant that, far from simply providing for those women who are in highly placed jobs, the north Tyneside scheme has so improved the opportunities for, and the experience of, child care in the day nursery that now working parents and middle-class parents bring their children to it as well, and that has uplifted the experience of those parents who thought that their children were there only because they qualified because they were deprived. Bringing all of that together with a strategy, knowing what is wanted for the whole borough and offering the opportunity for all parents to be involved in discussing what they wanted and the quality 789 that they expected, has uplifted the experience, not simply of the parents, but of the children and those people who work with them.

6.15 pm

The new clause does not tackle all the child care issues that we want to tackle, but it gives us the opportunity to say to the Government once again that this issue, which is critical for our future, ought not to be bandied about across the Benches. Unless we are prepared to invest in the best quality care for our children, they will not grow up with the confidence and commitment to be the active and participating citizens that we know that they will need to be in the next century. Unless we are prepared to invest in child care partnerships with employers, they will be unable to train and support the type of work force that they need, and that the country needs, to develop and improve. That is an economic issue, but it will also affect the patterns of community and of our society.

I hope that the Government, far from treating that issue as something that they can throw back at us, saying, "This is silly. If you do not like the exact nature of the clause, suggest something else", will recognise that unless we develop a child care strategy that centres on the economy, the future will be bleak for us all.

Ms Jean Corston (Bristol, East)

The debate is timely because it is reported that, by the end of 1994, women will outnumber men in the labour market. That especially challenges women with young children.

In the mid-1980s, 24 per cent. of women with children aged under five were working. By 1991, that figure was 45 per cent. As my hon. Friends have said, those mothers work through necessity as well as choice, because the Government's policy of low wages and deregulation means that women need to work to pay the mortgage, to support the family and to provide extras that they consider important for their children. That explosion in women's employment, especially when the children are under the age of five, has led to a child care gap that, in the past 10 years, has grown to number about 400,000 children.

The Pre-School Playgroups Association set up a telephone help line in October 1993, which was soon inundated with telephone calls from parents, especially lone parents, who were desperate to find child care.

Mr. Nigel Forman (Carshalton and Wallington)

I am listening to what the hon. Lady says. Does she know what proportion of the 45 per cent. of women with children aged under five to whom she referred who are in work are in very much part-time work rather than full-time work, according to the conventional definition? Obviously, if they were in part-time work, as I suspect that many of them are, that is more compatible with children going to pre-school playgroups and so on.

Ms Corston

Whether they are in full-time or part-time work is irrelevant if there are 400,000 children with unmet need. I shall talk about the various kinds of child care, but that is what I am concerned about, as all hon. Members should be. We all agree that women should be allowed to go out to work for whatever reason.

In February 1994, the Government published their first report to the United Nations committee on the rights of the child. It is revealing as much for what it does not say as for 790