'Childcare crunch' review urged

Chancellor George Osborne must review how childcare could be made more affordable, Labour have said.

The Plaid Cymru amendment would commit the Chancellor to publishing a report on returning the top rate of tax to 50p for those earning more than £150,000 or, alternatively, those earning more than £1 million
A bid to review the impact of a return to the 50p tax rate was defeated

Shadow treasury minister Catherine McKinnell claimed millions of families are facing a "childcare crunch", as she moved a proposal for the Government to examine how tax and childcare system changes could be used to help families.

Introducing an amendment to the Finance (No 2) Bill during a committee stage debate in the Commons, Ms Mc Kinnell said: "New clause one provides a welcome opportunity to explore one of the most pressing issues facing millions of parents up and down the country today and address the fact that millions of families are facing a childcare crunch."

Ms McKinnell claimed the average bill for a part-time nursery place of 25 hours a week had increased to £107, adding average weekly costs for a full-time place had risen by £200 or more.

She said: "Parents working part-time on average wages would have to work from Monday until Thursday before they've even paid off their weekly childcare costs."

The Labour spokeswoman dismissed existing coalition plans to extend free child care because they would not come into force until after the next General Election.

And Ms McKinnell said: "When can low income families expect to receive this support? Under original plans from (Iain Duncan Smith) most would have expected to receive the increased support when the tax free child care is introduced in 2015 but clearly that is not going to happen.

"When does the Government expect to introduce this increased support and will it be in the near future? Ultimately, as we have made clear, parents facing a cost of living crisis will see through any child care con because it does not make up for how much families are now paying for child care under this coalition Government."

The debate on child care emerged after earlier amendments were defeated.

T he Government saw off an attempt by Labour to ensure the Chancellor reviewed the impact of the planned cut to corporation tax.

This was defeated by 288 votes to 219, majority 69.

Plaid Cymru also urged the Government to review the impact of a 50p rate of tax with a view to returning the top rate to that level to ease the burden on the poorest.

Jonathan Edwards, Plaid Cymru MP for Carmarthen East and Dinefwr, insisted the issue had to be reopened because of the impact the Government's policies were having on the worst off.

Labour also tabled an amendment asking for the Chancellor to publish a report on the impact of setting a 50p rate of income tax within three months of the Bill coming into law.

The proposal, in the name of shadow chancellor Ed Balls and his shadow treasury team, wanted the report to estimate the impact in 2014/15 of a 45p rate and a 50p rate on people who earn £150,000 per year and £1 million per year.

Mr Edwards's amendment was defeated by 295 votes to 231, majority 64, while Labour's amendment was also defeated by 296 votes to 231, majority 65.

Treasury Minister Nicky Morgan said there was no need for a review, adding: "While members opposite are proposing yet another review, this Government is taking action and has taken action to address the rising costs of childcare faced by families."

She said this included aiming to allow parents and families to build up tax credits in accounts and spend them in the way that "suits them best" and funding 15 hours a week of free childcare for all three and four-year olds, plus for the 20% most disadvantaged two-year olds.

Ms Morgan noted this will be extended from September to include around 40% of two-year olds.

She added figures from the Family and Childcare Trust indicated that childcare costs increased by around 50% between 2002 and 2010.

Ms Morgan claimed Labour's proposal would not help families with the cost of childcare.

The minister told the Commons : "The Government has already reviewed how best to improve childcare through the Childcare Commission, which was launched in June 2012.

"We do not need another review. We need to take action now to support hard-working families. That is why we are supporting parents with tax-free childcare and universal credit.

"More people than ever before will be eligible for this support. We've consulted widely on these changes and our proposals have been welcomed by families and providers around the country."

The amendment for a review into childcare was defeated by 286 votes to 226, majority 60.

The committee stage of the Bill was adjourned and will resume tomorrow.