Welfare Reform Bill

My Lords, in moving Amendment 30BB I should explain that this is the first time that I have moved an amendment in Committee. I therefore ask for noble Lords’ forbearance if I am not as au fait with the procedural niceties as I ought to be. I pay tribute to the hugely impressive expertise around this Table in relation to the benefits system. I recognise that, in comparison, my own expertise is somewhat modest. This amendment concerns childcare. In saying that, I recognise that the childcare landscape has changed substantially since our original amendment was tabled. The Government’s announcement that an extra £300 million will be made available for childcare is hugely welcome and I pay tribute to the Minister for his role in that. This additional funding to address the acute difficulties faced by families who are taking the first steps in moving into work is much needed. Certainly, having spoken last week to a number of charities which have campaigned long and hard on this issue, I know how pleased they were with that outcome. So far, and quite understandably, there has not been much detail about precisely how the money will be spent. I looked with interest at Annexe 1 to the impact assessment. Paragraphs 14 to 17 gave a little detail but it would be very welcome if the Minister could give any further detail in this area. The purpose of the amendment is to draw attention to the impact of this extra funding in areas with high—sometimes very high—childcare costs. There is considerable regional variation in the costs of childcare. My particular concern is that without increasing the threshold in high-cost areas, this very welcome additional funding may have little impact on incentivising families with two or more children to move into work or to extend the hours that they work. Ministers have said throughout this exercise that the welfare system should boil down to a basic contract: work pays; being out of work does not. I strongly support this principle. However, for many larger families in areas with very high childcare costs, this contract barely holds. I shall illustrate the point about the scale of some of these regional variations with reference to some recent research that was commissioned by London Councils. The research shows that under the current universal credit proposals, London families with two or more children where both parents work will be at least £1,500 per year worse off than their counterparts in other parts of the UK. I use the example of London because it is where I live and the place I am most familiar with; it is also where the problem is most acute. However, I am conscious that I do not want to be accused of being too London-centric—something that we heard last week in Committee—and I know that the same issue applies equally in other parts of the country that have high childcare costs. I have one other statistic. The same research shows that childcare costs in London are estimated to be 43 per cent higher than in the north -west. Is it not right that disparities on this scale should be recognised in some way in the universal credit? I contend that childcare costs could be organised in the same way as housing support is currently managed, by using broad market areas. Indeed, for the purposes of support for housing costs, there are 16 areas in London. Could those not provide a basis for ensuring that actual costs were reflected? That could ensure that the provisions were put into effect in an efficient and cost-effective way. My basic feeling is that, if it can be done for housing, why can it not be done for childcare too? To recap, the aim of the amendment is twofold. First, it would ensure that in the calculation of the benefit account was taken of the amount of childcare support available under universal credit and the welcome addition of new money, which will vary according to the childcare costs in different areas; and, secondly, it would ensure that, through universal credit, childcare support included holiday and wraparound care for school -age children—things such as top-up times with nurseries, provisions at breakfast class and that sort of thing. The very nub of my argument here is that universal credit should ensure that families in areas of high childcare costs have the same incentives to work as those in areas of lower cost, and we should find a way to do that. I beg to move.