Yesterday afternoon, at 3.45pm, Elizabeth Truss offered more clarity on her proposals for the UK childcare industry, following the Government u-turn on ratios.
She stated, “This is a matter of pressing need, and we are taking forward the following proposals: introducing early-years educator and early-years teacher qualifications; introducing tax-free child care; ensuring that more money for child care goes to the front line; increasing the supply of childminders through the establishment of childminder agencies; and making it easier for schools to take two-year-olds in their nurseries.”
She then came under fire from several other ministers, including Sharon Hodgson, Labour MP for Washington and Sunderland West, who stated, “The Government have got themselves into a complete shambles. With every passing week, it becomes more and more apparent that Ministers do not have a credible plan to tackle the child care crisis they have created. Under this Government, parents are facing a triple whammy: costs are rising faster than wages and even general inflation, with the average cost having risen by almost 20% since 2010; support from the Government for those on tax credits has been cut, meaning that some families are up to £1,500 a year worse off; and there is a real struggle to find places in some areas owing to the cuts in supply-side subsidies and direct provision, such as through children’s centres. Since the election, we have lost almost 900 nurseries and more than 1,500 child minders, and there are 500 fewer Sure Start children’s centres.”
Meg Hillier, Labour MP for Hackney South and Shoreditch, sought clarity on the proposal for ‘Tax-free Childcare’ asking, “On new clause 10, the Minister made great play of introducing tax-free child care, but she should be clearer in her closing remarks about what exactly that means, as I fear she is misdescribing something. What she seems to be proposing is that after people have passed through many hoops, including having both parents working and receiving certain levels of income, 20% is paid, which is not tax-free for the higher rate taxpayer. I want her to clarify this point: she talked about those paying additional tax not qualifying, so will she explain what tax threshold this will and will not apply to, so people who might be affected can know about that?”
In response, Liz Truss stated, “We have had a wide-ranging debate on the various child care issues, but one point that I think we can all agree on is that there is an urgent need for high-quality, affordable child care in this country. At the moment, many working families are struggling to afford their child care, and I can assure the House that the Government are fully committed to improving the situation. Tax-free child care, which is the key policy that we have been promoting in the Bill, will contribute to that.
I would particularly like to thank Dan Rogerson for his very constructive comments, particularly on the point about our tax-free child care scheme. I want to reassure Meg Hillier that “tax-free” refers to the 20% that parents will benefit by. The critical point is that it is open to many more families.”