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 Downing Street adviser to Gordon Brown and Tony Blair. He tweets @GavinJKelly1.

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Ken Livingstone says publicly what many are saying privately: tomorrow belongs to John McDonnell

The Shadow Chancellor has emerged as a frontrunner should another Labour leadership election happen. 

“It would be John.” Ken Livingstone, one of Jeremy Corbyn’s most vocal allies in the media, has said publicly what many are saying privately: if something does happen to Corbyn, or should he choose to step down, place your bets on John McDonnell. Livingstone, speaking to Russia Today, said that if Corbyn were "pushed under a bus", John McDonnell, the shadow chancellor, would be the preferred candidate to replace him.

Even among the Labour leader’s allies, speculation is rife as to if the Islington North MP will lead the party into the 2020 election. Corbyn would be 71 in 2020 – the oldest candidate for Prime Minister since Clement Attlee lost the 1955 election aged 72.

While Corbyn is said to be enjoying the role at present, he still resents the intrusion of much of the press and dislikes many of the duties of the party leader. McDonnell, however, has impressed even some critics with his increasingly polished TV performances and has wowed a few sceptical donors. One big donor, who was thinking of pulling their money, confided that a one-on-one chat with the shadow chancellor had left them feeling much happier than a similar chat with Ed Miliband.

The issue of the succession is widely discussed on the left. For many, having waited decades to achieve a position of power, pinning their hopes on the health of one man would be unforgivably foolish. One historically-minded trade union official points out that Hugh Gaitskell, at 56, and John Smith, at 55, were 10 and 11 years younger than Corbyn when they died. In 1994, the right was ready and had two natural successors in the shape of Tony Blair and Gordon Brown in place. In 1963, the right was unprepared and lost the leadership to Harold Wilson, from the party's centre. "If something happens, or he just decides to call it a day, [we have to make sure] it will be '94 not '63," they observed.

While McDonnell is just two years younger than Corbyn, his closest ally in politics and a close personal friend, he is seen by some as considerably more vigorous. His increasingly frequent outings on television have seen him emerge as one of the most adept media performers from the Labour left, and he has won internal plaudits for his recent tussles with George Osborne over the tax bill.

The left’s hopes of securing a non-Corbyn candidate on the ballot have been boosted in recent weeks. The parliamentary Labour party’s successful attempt to boot Steve Rotheram off the party’s ruling NEC, while superficially a victory for the party’s Corbynsceptics, revealed that the numbers are still there for a candidate of the left to make the ballot. 30 MPs voted to keep Rotheram in place, with many MPs from the left of the party, including McDonnell, Corbyn, Diane Abbott and John Trickett, abstaining.

The ballot threshold has risen due to a little-noticed rule change, agreed over the summer, to give members of the European Parliament equal rights with members of the Westminster Parliament. However, Labour’s MEPs are more leftwing, on the whole, than the party in Westminster . In addition, party members vote on the order that Labour MEPs appear on the party list, increasing (or decreasing) their chances of being re-elected, making them more likely to be susceptible to an organised campaign to secure a place for a leftwinger on the ballot.

That makes it – in the views of many key players – incredibly likely that the necessary 51 nominations to secure a place on the ballot are well within reach for the left, particularly if by-election selections in Ogmore, where the sitting MP, is standing down to run for the Welsh Assembly, and Sheffield Brightside, where Harry Harpham has died, return candidates from the party’s left.

McDonnell’s rivals on the left of the party are believed to have fallen short for one reason or another. Clive Lewis, who many party activists believe could provide Corbynism without the historical baggage of the man himself, is unlikely to be able to secure the nominations necessary to make the ballot.

Any left candidate’s route to the ballot paper runs through the 2015 intake, who are on the whole more leftwing than their predecessors. But Lewis has alienated many of his potential allies, with his antics in the 2015 intake’s WhatsApp group a sore point for many. “He has brought too much politics into it,” complained one MP who is also on the left of the party. (The group is usually used for blowing off steam and arranging social events.)

Lisa Nandy, who is from the soft left rather than the left of the party, is widely believed to be in the running also, despite her ruling out any leadership ambitions in a recent interview with the New Statesman.However, she would represent a break from the Corbynite approach, albeit a more leftwing one than Dan Jarvis or Hilary Benn.

Local party chairs in no doubt that the shadow chancellor is profiling should another leadership election arise. One constituency chair noted to the New Statesman that: “you could tell who was going for it [last time], because they were desperate to speak [at events]”. Tom Watson, Caroline Flint, Chuka Umunna, Yvette Cooper, Andy Burnham and Liz Kendall all visited local parties across the country in preparation for their election bids in 2015.

Now, speaking to local party activists, four names are mentioned more than any other: Dan Jarvis, currently on the backbenches, but in whom the hopes – and the donations – of many who are disillusioned by the current leadership are invested, Gloria De Piero, who is touring the country as part of the party’s voter registration drive, her close ally Jon Ashworth, and John McDonnell.

Another close ally of Corbyn and McDonnell, who worked closely on the leadership election, is in no doubt that the shadow chancellor is gearing up for a run should the need arise.  “You remember when that nice Mr Watson went touring the country? Well, pay attention to John’s movements.”

As for his chances of success, McDonnell may well be even more popular among members than Corbyn himself. He is regularly at or near the top of LabourList's shadow cabinet rankings, and is frequently praised by members. Should he be able to secure the nominations to get on the ballot, an even bigger victory than that secured by Corbyn in September is not out of the question.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.