U-turn on childcare cuts: is the coalition waking up to its women problem?

Ministers have rightly backtracked on a regressive cut aimed directly at working women.

Sooner or later something had to give. And today it has. Following much speculation the government has finally announced a change in its planned cuts to childcare, a key area of concern for many working mothers (and fathers). The recent heat about fast falling support for the coalition among key groups of women voters is starting to take its toll.

So £300m has been found to ensure that more part-time workers can claim tax-credit support for childcare without necessitating a further cut in provision for existing claimants. Up until now there had been widespread fear that any extension in support for part-timers would mean yet another cut in childcare support for everyone else.

To get perspective on these changes requires some background. Under Labour those parents on low and modest incomes working more than 16 hours a week were eligible for support covering 80 per cent of their childcare costs. Last April the coalition cut this support to 70 per cent. That may sound a small change - it isn't. It meant a major hike in the share of childcare costs low-income working parents have to pay. On average this has translated into a £450 loss for half a million parents, with some losing a staggering £1300.

Since then there has been much well informed speculation, based on meetings between ministers and children's campaigners, about another significant reduction in support for working parents currently claiming childcare support (as part of the move to towards the Universal Credit). The implications of this further cut were going to be devastating for many families, as lone parents and second earners - overwhelmingly women - would have been left with little if any incentive to work more than a few days a week.

Today's announcement removes this threat. Importantly, it extends for the first time eligibility for childcare support to those working less than 16 hours a week, without any offsetting cut for other parents to pay for this. This is genuinely good news for many families struggling on low incomes looking for slivers of work to help make ends meet. What it completely fails to do, however, is reverse April's cut.

For those involved in the technicalities of this policy debate, today's news feels like a bit of a victory - something awful has been averted and something positive secured. That's why there has been a fair bit of relief, and positive reaction, to the announcement. But for working parents already claiming support, still smarting from April's cuts, there isn't going to be any gratitude. You don't get prizes in politics for avoiding making a bad situation worse. In fact the money made available today almost exactly matches the cut made in the spring. The net result has been a shift in support away from those working more than two days a week, towards those working less than this. And this extra money comes from the £2bn set aside for introducing the Universal Credit; we don't yet know what else this money might have been spent on.

And let's not forget that, particularly following April's cut, the system of childcare support has some truly miserable features. Donald Hirsch, the leading welfare expert, has pointed out that someone on the minimum wage weighing up whether to work an extra hour will keep only about 35p of the extra £6 they earn (once they take account of additional childcare costs, the extra tax paid and reduced tax credits). Work hardly pays.

Today's shift on childcare is, nonetheless, significant in that it represents a clear decision to back-track on what was going to be an incredibly regressive cut aimed directly at working women. It also reveals something of the internal discussion going on within the coalition.

Above all it confirms that they have been rocked by recent polling showing plummeting support amongst female C2 voters, as well as other work by campaign groups showing how severely childcare costs are hitting family living standards. In the face of these concerns, abstract apologies from David Cameron to women voters were never going to suffice.

It also reflects the fact that Nick Clegg, who absented himself from debates on welfare and work for too long, has woken up to the fact that what was happening on childcare made a total mockery of his claim to champion 'alarm clock Britain'.

On closer inspection his team realised that further cuts would have risked the death of full-time work, or anything near full-time work, for women in low-income families relying on tax credits to pay for the childcare they need to hold down a job. This is obviously a major economic issue - but it's a massive electoral and gender one too. The Liberal Democrats, who were disproportionately reliant on female votes last May, realised during the summer that they couldn't sit this one out. Over recent weeks Clegg forced the hand of IDS and George Osborne and vetoed the idea of the announcement being made to the Tory faithful in Manchester this week.

Less easy to discern are the other changes this new found concern with working women might result in. Many expect a watering down of the coalition's proposed axing of Child Benefit for all higher rate tax-payers in 2013, though pressure for this will come from Conservative backbenchers (worrying about the impact on middle income stay-at-home mothers) rather than the Liberal Democrat leadership. Another flashpoint is likely to be the new and severe charging regime for parents using the Child Support Agency.

Either way the coalition's woes with working women on low-to-middle incomes are set to grow not diminish. The wider economic, fiscal and social forces underpinning them are hardly going to be reversed by one announcement on childcare. But at least today's announcement was more than warm words. And that's a step forward.

Gavin Kelly is a former adviser to Downing Street and the Treasury. He tweets @GavinJKelly1.

How Jim Murphy's mistake cost Labour - and helped make Ruth Davidson

Scottish Labour's former leader's great mistake was to run away from Labour's Scottish referendum, not on it.

The strange revival of Conservative Scotland? Another poll from north of the border, this time from the Times and YouGov, shows the Tories experiencing a revival in Scotland, up to 28 per cent of the vote, enough to net seven extra seats from the SNP.

Adding to the Nationalists’ misery, according to the same poll, they would lose East Dunbartonshire to the Liberal Democrats, reducing their strength in the Commons to a still-formidable 47 seats.

It could be worse than the polls suggest, however. In the elections to the Scottish Parliament last year, parties which backed a No vote in the referendum did better in the first-past-the-post seats than the polls would have suggested – thanks to tactical voting by No voters, who backed whichever party had the best chance of beating the SNP.

The strategic insight of Ruth Davidson, the Conservative leader in Scotland, was to to recast her party as the loudest defender of the Union between Scotland and the rest of the United Kingdom. She has absorbed large chunks of that vote from the Liberal Democrats and Labour, but, paradoxically, at the Holyrood elections at least, the “Unionist coalition” she assembled helped those parties even though it cost the vote share.

The big thing to watch is not just where the parties of the Union make gains, but where they successfully form strong second-places against whoever the strongest pro-Union party is.

Davidson’s popularity and eye for a good photo opportunity – which came first is an interesting question – mean that the natural benefactor in most places will likely be the Tories.

But it could have been very different. The first politician to hit successfully upon the “last defender of the Union” routine was Ian Murray, the last Labour MP in Scotland, who squeezed both the  Liberal Democrat and Conservative vote in his seat of Edinburgh South.

His then-leader in Scotland, Jim Murphy, had a different idea. He fought the election in 2015 to the SNP’s left, with the slogan of “Whether you’re Yes, or No, the Tories have got to go”.  There were a couple of problems with that approach, as one  former staffer put it: “Firstly, the SNP weren’t going to put the Tories in, and everyone knew it. Secondly, no-one but us wanted to move on [from the referendum]”.

Then again under different leadership, this time under Kezia Dugdale, Scottish Labour once again fought a campaign explicitly to the left of the SNP, promising to increase taxation to blunt cuts devolved from Westminster, and an agnostic position on the referendum. Dugdale said she’d be open to voting to leave the United Kingdom if Britain left the European Union. Senior Scottish Labour figures flirted with the idea that the party might be neutral in a forthcoming election. Once again, the party tried to move on – but no-one else wanted to move on.

How different things might be if instead of running away from their referendum campaign, Jim Murphy had run towards it in 2015. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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