Mr Zahawi was giving evidence for the first time to the Education Select Committee last week (Wednesday 14 March), where he was questioned by the chair of the committee Robert Halfon MP and Labour MP for Manchester Central Lucy Powell about the Government’s decision to offer the 30 hours to higher-income parents and whether the eligibility threshold could be reduced to fund the policy for non-working parents.
Working parents of three- and four-year-olds earning up to £100,000 each are eligible for the 30 hours of funded childcare.
Speaking at the meeting, Mr Halfon said, ‘Surely there must be a case for reducing the upper thresholds for 30 hours and Tax-Free Childcare, and using this money to support poorer parents, especially those not working, with their childcare costs. How can it be right that an MP with children gets free childcare, yet a single parent not working doesn’t?’
He went on to point to evidence which shows attending early years provision is beneficial to children’s social mobility and asked if the Government can enable parents who aren’t working have a right to free childcare too.
In response, Mr Zahawi said he (Robert Halfon) made an interesting point. ‘However, the 30 hours were always intended as a nudge to get parents into work and the purpose of the 15 hours is to narrow the attainment gap between advantaged and disadvantaged children.’
He referred to an initiative run by Wigan local authority in which parents eligible for the two-year-old provision are encouraged to think about transitioning to the 30 hours when their child turns three by taking on work. He said this initative bridges the gap, as the local authority funds childcare for parents before they get a job.
Mr Zahawi went on to say that the ‘practice on the ground’ is very much focused on the low-paid, and he would not want to lose the incentive to get parents to think about going back to work.
However, he was challenged by Labour MP Lucy Powell who said that it is higher earners who are mainly benefiting and warned the 30 hours will entrench a lack of social mobility.
She said, ‘It is (30 hours) going to entrench social immobility rather than promote mobility. In Manchester, for example, like Salford, Hackney and Lewisham, there has been a long history of providing free nursery pre-school provision for families. These local authorities are now unable to provide that free provision other than to working families. In Manchester, they have been targeting this provision at the most disadvantaged areas, but they can’t do that now. It is flipping the money away.’
Robert Halfon added, ‘If you reduce the threshold of £100,000 you can fund many non-working single parents to have free childcare.’
Responding to their comments, Mr Zahawi said, ‘We are conducting a review as this is obviously the first year of the 30 hours. I would happily look at some of the evidence you have suggested.
‘The evidence I have seen on the ground…I was in a pop-up nursery rated outstanding in Staffordshire the other day when a lady came up to me and said you have changed my life because I used to have to work shifts at Tescos, but because of 30 hours I no longer have to and we have a life together.’
Last year, research by the Resolution Foundation with Nursery World showed how the 30 hours policy will save some of the poorest households least - £5 per week, while the richest will gain ten times that.
Purnima Tanuku, chief executive of National Day Nurseries Association (NDNA), said, 'Quality early learning is vital for children from disadvantaged backgrounds to help them have the best start in life.
'Supporting more parents into work is also a very positive step for the whole family. Children are disadvantaged by the very fact that they come from low-income households.
'If non-working parents were given funded places, it would enable them to seek employment and give greater opportunities for their children.
'The sector would be happy to deliver more funded hours if the investment was sufficient to allow the hourly funding rate to cover their business costs. If not, providers will continue to limit places and parents will just end up paying for this in the form of higher fees for younger children.
'If reducing the earnings threshold for 30 hours means it would free up some investment to enhance the hourly rate, then Government should consider this option.'