Why today’s childcare changes won’t help the squeezed middle

The government’s plans will not undo the damage from cuts to tax credits and Sure Start.

We know parents are struggling with the cost of childcare right now. Under David Cameron, childcare costs are eating further and further into household incomes. Research from the Daycare Trust shows costs have risen by 7% in the last year alone, while average hourly earnings have fallen. In one central London nursery, you would have to pay an eye-watering £42,000 a year for one full-time nursery place.

At the same time, David Cameron has been cutting support to families, including cuts to tax credits, child benefit and maternity support. By the next election, families with children will have been hit with cuts of £15bn in financial support over the course of the parliament. By 2015, these cuts will amount to £7bn a year, ten times the value of the £750m in childcare support the government is now proposing.

Worse still, under the government’s childcare plans, not a single family will get a penny before May 2015. But families need real help coping with childcare bills this year, not a vague promise of help in two and a half years’ time.

Many low and middle income earners will lose out under these plans. Families claiming childcare support through tax credits have already seen this support cut by up to £1,560 a year, yet the government’s plans will not undo the damage for many of these families.

But while many families on modest incomes are losing out, if you earn £300,000 you will benefit. The government claims this is fair – but then this is the government that is prioritising a £100,000 tax break to millionaires, so we know what David Cameron’s definition of fairness is.

Many families will lose out in other ways too. A couple who both pay basic rate tax and have one child can currently get just over £1,800 in support through the childcare voucher scheme. Under the government’s plans, this will fall to £1,200 – another blow to household incomes.

So the childcare squeeze will continue. At the same time, the government is threatening the quality of childcare with their plans to increase the number of toddlers that nursery staff look after and there are now 401 fewer Sure Start Children’s Centres than in 2010.

The government should provide immediate help to families that are struggling, not just more vague promises of help further down the line.

David Cameron and Deputy Prime Minister Nick Clegg visit Wandsworth Day Nursery on March 19, 2013 in London. Photograph: Getty Images.

Stephen Twigg is shadow minister for constitutional reform and MP for Liverpool West Derby

Photo: Getty
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Unite stewards urge members to back Owen Smith

In a letter to Unite members, the officials have called for a vote for the longshot candidate.

29 Unite officials have broken ranks and thrown their weight behind Owen Smith’s longshot bid for the Labour leadership in an open letter to their members.

The officials serve as stewards, conveners and negotiators in Britain’s aerospace and shipbuilding industries, and are believed in part to be driven by Jeremy Corbyn’s longstanding opposition to the nuclear deterrent and defence spending more generally.

In the letter to Unite members, who are believed to have been signed up in large numbers to vote in the Labour leadership race, the stewards highlight Smith’s support for extra funding in the NHS and his vision for an industrial strategy.

Corbyn was endorsed by Unite, Labour's largest affliated union and the largest trades union in the country, following votes by Unite's ruling executive committee and policy conference. 

Although few expect the intervention to have a decisive role in the Labour leadership, regarded as a formality for Corbyn, the opposition of Unite workers in these industries may prove significant in Len McCluskey’s bid to be re-elected as general secretary of Unite.

 

The full letter is below:

Britain needs a Labour Government to defend jobs, industry and skills and to promote strong trade unions. As convenors and shop stewards in the manufacturing, defence, aerospace and energy sectors we believe that Owen Smith is the best candidate to lead the Labour Party in opposition and in government.

Owen has made clear his support for the industries we work in. He has spelt out his vision for an industrial strategy which supports great British businesses: investing in infrastructure, research and development, skills and training. He has set out ways to back British industry with new procurement rules to protect jobs and contracts from being outsourced to the lowest bidder. He has demanded a seat at the table during the Brexit negotiations to defend trade union and workers’ rights. Defending manufacturing jobs threatened by Brexit must be at the forefront of the negotiations. He has called for the final deal to be put to the British people via a second referendum or at a general election.

But Owen has also talked about the issues which affect our families and our communities. Investing £60 billion extra over 5 years in the NHS funded through new taxes on the wealthiest. Building 300,000 new homes a year over 5 years, half of which should be social housing. Investing in Sure Start schemes by scrapping the charitable status of private schools. That’s why we are backing Owen.

The Labour Party is at a crossroads. We cannot ignore reality – we need to be radical but we also need to be credible – capable of winning the support of the British people. We need an effective Opposition and we need a Labour Government to put policies into practice that will defend our members’ and their families’ interests. That’s why we are backing Owen.

Steve Hibbert, Convenor Rolls Royce, Derby
Howard Turner, Senior Steward, Walter Frank & Sons Limited
Danny Coleman, Branch Secretary, GE Aviation, Wales
Karl Daly, Deputy Convenor, Rolls Royce, Derby
Nigel Stott, Convenor, BASSA, British Airways
John Brough, Works Convenor, Rolls Royce, Barnoldswick
John Bennett, Site Convenor, Babcock Marine, Devonport, Plymouth
Kevin Langford, Mechanical Convenor, Babcock, Devonport, Plymouth
John McAllister, Convenor, Vector Aerospace Helicopter Services
Garry Andrews, Works Convenor, Rolls Royce, Sunderland
Steve Froggatt, Deputy Convenor, Rolls Royce, Derby
Jim McGivern, Convenor, Rolls Royce, Derby
Alan Bird, Chairman & Senior Rep, Rolls Royce, Derby
Raymond Duguid, Convenor, Babcock, Rosyth
Steve Duke, Senior Staff Rep, Rolls Royce, Barnoldswick
Paul Welsh, Works Convenor, Brush Electrical Machines, Loughborough
Bob Holmes, Manual Convenor, BAE Systems, Warton, Lancs
Simon Hemmings, Staff Convenor, Rolls Royce, Derby
Mick Forbes, Works Convenor, GKN, Birmingham
Ian Bestwick, Chief Negotiator, Rolls Royce Submarines, Derby
Mark Barron, Senior Staff Rep, Pallion, Sunderland
Ian Hodgkison, Chief Negotiator, PCO, Rolls Royce
Joe O’Gorman, Convenor, BAE Systems, Maritime Services, Portsmouth
Azza Samms, Manual Workers Convenor, BAE Systems Submarines, Barrow
Dave Thompson, Staff Convenor, BAE Systems Submarines, Barrow
Tim Griffiths, Convenor, BAE Systems Submarines, Barrow
Paul Blake, Convenor, Princess Yachts, Plymouth
Steve Jones, Convenor, Rolls Royce, Bristol
Colin Gosling, Senior Rep, Siemens Traffic Solutions, Poole

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.