Mr. Lewis: I entirely understood the point; I just did not agree with it. There are two principles. The first is that the Government believe that where state funding is provided, a variety of performance measures and an inspection framework are appropriate. The second is that when the provision of a tax credit allows an individual to purchase a service from a provider that is not part of the inspection framework, it is important to have the capacity to bring any such provider into the requirement to be inspected by Ofsted. The parent has the right to know that, from whomever they are choosing to buy the service, a quality protection exists. The legislation gives the Government the capacity to bring into the regulatory framework providers who are currently outside it.
Mr. Willis: With respect, the provider in Mr. Whip's case will not know that Mr. Whip is in receipt of a tax credit unless he informs it. To my knowledge, there is no requirement on the individual to tell the provider.
Mr. Lewis: I will help to clarify the matter. The Government are talking about naming not individual providers but categories of provider. At present, the tax credit may be used to buy child care only from certain providers. The Government could in the future decide to extend the categories of providers, and the Tax Credits Bill, which is currently in Committee, provides that option. If the Government wanted to do that, there is the provision to bring those providers into the inspection regulatory framework. Perhaps I did not make this clear enough. This is linked with the Tax Credits Bill, which gives the Government the future option to extend the range of providers that tax credits can be used to purchase child care from.
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Mr. Willis: My understanding of the Tax Credits Bill is that it gives individuals the right to use tax credits wherever they want. The Minister has clarified the situation by saying that for early years provision, tax credits can be used only for a provider that is part of an early years partnership.
Caroline Flint (Don Valley): Or registered.
Mr. Willis: That is the point: the private sector provider to which Mr. Whip sends his child may be registered, but not part of a partnership.
Mr. Lewis: I accept the hon. Gentleman's point. The clause makes reference to approved persons. In the future that might not necessarily mean a full inspection and registration. There will be a guarantee of consultation on any scheme. We need to place it in the context of concerns that parents and guardians have expressed: that they may be eligible for tax credits, but the child care arrangements that they want to make are not possible because the tax credit can currently be used to buy services only from particular providers.
Mr. Willis: That is my point.
Mr. Lewis: Yes. That does not create the flexibility and the kind of service that we need to create. This is a difficult and sensitive area. Whom do we accept and how do we inspect what have historically been called informal arrangements? Parents may decide that they want someone they trust, such as a next-door neighbour or a relative, to look after their child, being confident that they will do so in a satisfactory way and in a quality setting. The Government are seeking to open up the debate and the possibility that in the future, because we want to achieve the objectives that we set out with, we extend the range of providers that parents in receipt of tax credits may use.
We want to increase the range of providers but not to undermine quality, to increase flexibility for parents and carers and ensure that options are available, but also legislate for some form of inspection and regulation of those settings. It is to be debated whether such inspection should be light touch or carried out on the same basis on which Ofsted inspects other providers. If people are using a relative or neighbour they would not want an Ofsted inspector knocking at the door. This is about giving power in the future, if we go down those routes and extend the scope of the tax credit scheme, to ensure some form of inspection and monitoring regime to guarantee quality.
Mrs. Laing: This is an extremely important point. The Minister has clarified the Government's intentions. I am concerned that the clause appears to give the Government power to make changes that we will not have a chance to question or explore because that power will be exercised by the Secretary of State. This is our only opportunity to ask the Minister questions. Do the Government envisage that the tax credit scheme could be expanded, including the safeguards for the protection of small children that we support, for the employment of nannies in the home? I am not sure whether I have to declare this interest, but I employ a nanny. I pay my tax and the
Column Number: 553nanny's tax and other expenses out of my taxed income.
Mr. Willis: The hon. Lady is part of the nanny state.
Mrs. Laing: Yes, I have to admit that in that context I am. A very good nanny she is too, but that is not the point. This is the only opportunity that we have to ask the Minister whether the Government envisage expanding the scheme. I am sure that the hon. Member for Don Valley (Caroline Flint) would agree that whether the answer is yes or no, the question is important. Hundreds of thousands of working mothers throughout the country want to know the answer.
Mr. Lewis: We do not plan to extend the provision to nannies. However, we do plan to review the best way of achieving our objective of flexible, affordable, high-quality child care. The hon. Lady says that hon. Members will not have the opportunity to debate that, but there will be plenty of opportunities to ask questions and participate in consultation. To be frank, if the Government decided to extend the range of providers covered by the tax credit, the major concerns would be how that impacted on quality, and the balance of regulations. The clause is designed to ensure that parents have access to the flexibility that they require in an increasingly complex labour market, without compromising quality.
I have explained the Government's position as comprehensively as I can. We want to reach sensible decisions and maintain a balance between increasing the volume of child care and protecting its quality.
Mr. Turner: Two issues now arise. I remind the Minister that he has not responded to the question of the hon. Member for Harrogate and Knaresborough about what happens to Master or Miss Whip in a private nursery such as Labourbirds, when his or her parents fall on hard times and need to claim the tax credit. It would appear that they are not entitled to do so: the tax credit is of no benefit to Mr. and Mrs. Whip in those circumstances.
The second point relates to the regulation of nannies. They provide care in the home. What about grannies, who provide care outside the home?
Mr. Lewis: I assure the hon. Gentleman that I am not going to give him the headline that he wants: ''Ofsted to inspect grannies''. That is not our intention. Mrs. Whip must be a special lady. Why would that nursery not be registered? It is likely to be registered. If it were not, that would be because it was not part of the category of providers. I assume that the hon. Member for Harrogate and Knaresborough welcomes the fact the Government are considering extending the categories of providers so that people can buy places through the tax credit.
Mr. Willis: We agree with the Minister. We are not trying to be difficult, although that might appear to be the case. An early years setting in my constituency was a member of the partnership, but decided to leave because of the onerous inspection regime and because it did not meet the requirements. Nevertheless, to
Column Number: 554satisfy the parents, it rightly said that it wanted the LEA to inspect it to ensure that it met health and safety and other requirements. It is therefore registered with the LEA but is not part of the partnership. It said that it would not take any Government money for three and four-year-olds, but would be self-sufficient, so that parents pay the full cost.
They are many settings throughout the country that want to do things their own way and provide their own curriculum, but are nevertheless bone fide early years settings. Mr. and Mrs. Whip have sent their child to such a setting. If Mr. Whip must apply for a tax credit, he will receive it, but unless he tells the provider, the provider has no way of knowing and would not come under the regime to which the Minister referred. If the provider knew, it might tell the parent that he must remove the child because it did not want to be part of the regime.
Mr. Lewis: The hon. Gentleman makes a valid point, but the provider would know if someone received a tax credit. If the relevant provider were not eligible, the sad reality would be that the child would have to move to another provider because of the provider's decision. That is one reason why the provider would know about the tax credit. The Mr. Whip scenario is therefore blown out of the water. We must revisit the link between who is eligible to provide child care and who receives tax credits. That is more ammunition for the argument that there should be more flexibility and sensitivity to take account of local circumstances. The difficulty lies in getting the balance right between flexibility, responsiveness, quality and protection. The Tax Credit Bill will enable the Government to keep their options open, to review a relatively new development in the infrastructure throughout the country, and to respond sensitively. If it is clear that too many parents or young children are being denied opportunities, that Bill will allow the Government the flexibility to revisit the basis on which child care is bought. That is a perfectly reasonable proposition.
Mrs. Laing: Is the Minister giving way?
Mr. Lewis: I am.
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