The coalition's new childcare policy: three problems

High-earners gain the most, 860,000 single-earner families lose out and the system won't be introduced until 2015.

After months of negotiations, David Cameron and Nick Clegg will announce the coalition's childcare plans today. Under the new system, parents on joint incomes of up to £300,000 (or £150,000 for a one-parent family) will be able to claim £1,200 a year for each child - or 20 per cent of childcare costs. The £750m scheme will initially cover children under the age of five and will be gradually extended to include all children under 12. Half of the funding will come from the abolition of the existing system of childcare vouchers, with the reminder switched from other Whitehall departments. An additional £200m of support will be provided through Universal Credit. 

The chief benefit of the new policy is that will offer support to those parents who do not currently benefit from the employer-funded voucher scheme, which is provided by only five per cent of employers. Around 1.3 million families will qualify for the scheme, rising to 2.5 million as it is gradually extended. In a joint appearance with Clegg later today, Cameron will hail it as "one of the biggest measures ever introduced to help parents with childcare costs" but here are three problems with the policy that the government won't be so keen to draw attention to. 

1. High-earners will gain the most from the policy, with less support provided those on low and middle incomes. In order to be eligible for support, both parents must be earning over the personal allowance (which will rise to £9,440 this April) and 82 per cent of those families likely to gain from tax relief are in the top half of the income distribution. 

While low earners will benefit from increased support through Universal Credit, with 88 per cent of recipients in the bottom half of earners, the lion's share of funding is devoted to tax relief (£750m against £200m for UC), meaning that the system is regressive overall. 

2. To qualify for the scheme, both parents in a two-earner family and one parent in a single-earner family must be in work. As a result, around 860,000 single-earner families with a child under five will receive no support. Following the withdrawal of child benefit from those earning £50,000 (but not two-earners on £49,000 each), this is another blow to stay-at-home parents. 

3. The new system won't be introduced until autumn 2015 at the earliest. The coalition had originally intended to implement it before the next election but the anaemic state of the economy meant it was ruled unaffordable by the Treasury. However, as shadow education secretary Stephen Twigg notes, the government has found £1.1bn to reduce the top rate of income tax from 50p to 45p this April.

"Parents will be disappointed that three years into this government, they will not get any help with childcare costs for another two and a half years. While working parents are promised help tomorrow, this government is only helping millionaires today."

David Cameron is pictured during a visit to a London Early Years Foundation nursery in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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I believe only Yvette Cooper has the breadth of support to beat Jeremy Corbyn

All the recent polling suggests Andy Burnham is losing more votes than anyone else to Jeremy Corbyn, says Diana Johnson MP.

Tom Blenkinsop MP on the New Statesman website today says he is giving his second preference to Andy Burnham as he thinks that Andy has the best chance of beating Jeremy.

This is on the basis that if Yvette goes out first all her second preferences will swing behind Andy, whereas if Andy goes out first then his second preferences, due to the broad alliance he has created behind his campaign, will all or largely switch to the other male candidate, Jeremy.

Let's take a deep breath and try and think through what will be the effect of preferential voting in the Labour leadership.

First of all, it is very difficult to know how second preferences will switch. From my telephone canvassing there is some rather interesting voting going on, but I don't accept that Tom’s analysis is correct. I have certainly picked up growing support for Yvette in recent weeks.

In fact you can argue the reverse of Tom’s analysis is true – Andy has moved further away from the centre and, as a result, his pitch to those like Tom who are supporting Liz first is now narrower. As a result, Yvette is more likely to pick up those second preferences.

Stats from the Yvette For Labour team show Yvette picking up the majority of second preferences from all candidates – from the Progress wing supporting Liz to the softer left fans of Jeremy – and Andy's supporters too. Their figures show many undecideds opting for Yvette as their first preference, as well as others choosing to switch their first preference to Yvette from one of the other candidates. It's for this reason I still believe only Yvette has the breadth of support to beat Jeremy and then to go on to win in 2020.

It's interesting that Andy has not been willing to make it clear that second preferences should go to Yvette or Liz. Yvette has been very clear that she would encourage second preferences to be for Andy or Liz.

Having watched Andy on Sky's Murnaghan show this morning, he categorically states that Labour will not get beyond first base with the electorate at a general election if we are not economically credible and that fundamentally Jeremy's economic plans do not add up. So, I am unsure why Andy is so unwilling to be clear on second preferences.

All the recent polling suggests Andy is losing more votes than anyone else to Jeremy. He trails fourth in London – where a huge proportion of our electorate is based.

So I would urge Tom to reflect more widely on who is best placed to provide the strongest opposition to the Tories, appeal to the widest group of voters and reach out to the communities we need to win back. I believe that this has to be Yvette.

The Newsnight focus group a few days ago showed that Yvette is best placed to win back those former Labour voters we will need in 2020.

Labour will pay a massive price if we ignore this.

Diana Johnson is the Labour MP for Hull North.