Childcare: the gaping hole in the government’s growth plans

High-quality childcare should be seen by government as an issue for business and a key infrastructure priority. But ministers have nothing to say on the subject.

As the dust settles on the 2013 Spending Round, it is perhaps no surprise given this government’s abysmal record on supporting families – and mothers in particular - that the Chancellor failed to mention childcare. This is a key issue at the centre of the cost of living crisis yet it is absent from government plans for growth.

Parents face a childcare triple whammy of this government’s making. Prices are rising year-on-year, outstripping earnings and inflation; places are plummeting as a result of cuts to Sure Start and early years funding; and support for parents to make childcare affordable has been slashed since this government came to power.  This crisis is creating disincentives to work, or work more, and the lack of affordable childcare has a negative impact on women’s participation in the labour market.

Government proposals will create more problems than they solve. We’ve already had the debacle over childcare ratios; childminder agencies could increase costs for business and parents, rather than reduce them; and quality could also suffer with the loss of individual inspection of childminders. Tax-free childcare will not be introduced until 2015 and will benefit the richest the most.

Childcare is a vital part of improving the economic prospects of this country, of critical importance to the economic future of many women, and in some cases men so they can return to work at a level and pay they were receiving before having children. 

It’s time for a new deal for parents and mothers particularly, to make work pay and to improve the prospects of women in low paid limbo-jobs after they return to work. Research this week shows that more than three quarters of part time workers feel trapped in jobs unable to get promoted and on low pay. Childcare should support women back to work immediately after maternity leave if parents choose this with help at six, nine, twelve or eighteen months. 

All the evidence shows us that women who take a break from work and their careers suffer a pay gap for the rest of their lives, very rarely returning to the level, hours and pay they were on previously. 

Labour needs to think big and to think BIS. Childcare is not just a Department for Education issue. It should be a Department for Business, Innovation and Skills issue too. While early years education is vital for child development and early intervention, childcare should be seen by government as an issue for business and a key infrastructure priority to promote growth and get people back to work, linking in with BIS responsibilities for flexible working and shared parental leave. That’s why I’m proposing that a future Labour government should have a Childcare and Early Years Minister with cross-departmental responsibilities in the Department for Business, Innovation and Skills and the Department for Education coordinating support for working parents across government including working with Ministers in the Treasury and Department for Work and Pensions. Support for families should be shaped by what parents need rather than falling between the silos of government. Ensuring good quality early years education and child development goes hand in hand with getting the quality parents want to have so they feel happy leaving their children to return to work.

Sufficient high quality childcare should be used as an engine for growth. It is as important for a strong local economy as transport infrastructure and skills. This government has nothing to say on this. Labour needs to make the infrastructure and growth case for childcare to support women back to work linked to a radical agenda of real shared parental leave, flexible working and childcare to meet the needs of all families, particularly those working anti-social or unusual hours. Business has a big role to play in this and we should look at how we can incentivise workplaces to support wraparound childcare.

A Childcare and Early Years Minister working across DfE and BIS needs to make the case to the Treasury of the added tax-revenue over the long-term of women returning to their existing jobs as well as eradicating the perverse work disincentives that exist today. IPPR argue that over a four year period there would be a net return to the Exchequer of over £20,000 per parent of a returning mother, even when 25 hours a week free childcare is provided over that same period.

We should then look at using the extra tax generated from parents earning more and working more to increase up-front investment, in more radical childcare support focused on the points at which parents make the decisions about how and when to return to work, especially when their maternity leave comes to an end, or when they have had their second child. 

Labour should make it our business to make the case for better support for mums and dads to balance family life. Childcare will be a key battleground at the next election.

Lucy Powell is Labour MP for Manchester Central

A Sure Start centre in Long Stratton in Norfolk.

Lucy Powell is MP for Manchester Central and Shadow Secretary of State for Education. 

Photo: Getty
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After Richmond Park, Labour MPs are haunted by a familiar ghost

Labour MPs in big cities fear the Liberal Democrats, while in the north, they fear Ukip. 

The Liberal Democrats’ victory in Richmond Park has Conservatives nervous, and rightly so. Not only did Sarah Olney take the votes of soft Conservatives who backed a Remain vote on 23 June, she also benefited from tactical voting from Labour voters.

Although Richmond Park is the fifth most pro-Remain constituency won by a Conservative at the 2015 election, the more significant number – for the Liberal Democrats at least – is 15: that’s the number of Tory-held seats they could win if they reduced the Labour vote by the same amount they managed in Richmond Park.

The Tories have two Brexit headaches, electorally speaking. The first is the direct loss of voters who backed David Cameron in 2015 and a Remain vote in 2016 to the Liberal Democrats. The second is that Brexit appears to have made Liberal Democrat candidates palatable to Labour voters who backed the party as the anti-Conservative option in seats where Labour is generally weak from 1992 to 2010, but stayed at home or voted Labour in 2015.

Although local council by-elections are not as dramatic as parliamentary ones, they offer clues as to how national elections may play out, and it’s worth noting that Richmond Park wasn’t the only place where the Liberal Democrats saw a dramatic surge in the party’s fortunes. They also made a dramatic gain in Chichester, which voted to leave.

(That’s the other factor to remember in the “Leave/Remain” divide. In Liberal-Conservative battlegrounds where the majority of voters opted to leave, the third-placed Labour and Green vote tends to be heavily pro-Remain.)

But it’s not just Conservatives with the Liberal Democrats in second who have cause to be nervous.  Labour MPs outside of England's big cities have long been nervous that Ukip will do to them what the SNP did to their Scottish colleagues in 2015. That Ukip is now in second place in many seats that Labour once considered safe only adds to the sense of unease.

In a lot of seats, the closeness of Ukip is overstated. As one MP, who has the Conservatives in second place observed, “All that’s happened is you used to have five or six no-hopers, and all of that vote has gone to Ukip, so colleagues are nervous”. That’s true, to an extent. But it’s worth noting that the same thing could be said for the Liberal Democrats in Conservative seats in 1992. All they had done was to coagulate most of the “anyone but the Conservative” vote under their banner. In 1997, they took Conservative votes – and with it, picked up 28 formerly Tory seats.

Also nervous are the party’s London MPs, albeit for different reasons. They fear that Remain voters will desert them for the Liberal Democrats. (It’s worth noting that Catherine West, who sits for the most pro-Remain seat in the country, has already told constituents that she will vote against Article 50, as has David Lammy, another North London MP.)

A particular cause for alarm is that most of the party’s high command – Jeremy Corbyn, Emily Thornberry, Diane Abbott, and Keir Starmer – all sit for seats that were heavily pro-Remain. Thornberry, in particular, has the particularly dangerous combination of a seat that voted Remain in June but has flirted with the Liberal Democrats in the past, with the shadow foreign secretary finishing just 484 votes ahead of Bridget Fox, the Liberal Democrat candidate, in 2005.

Are they right to be worried? That the referendum allowed the Liberal Democrats to reconfigure the politics of Richmond Park adds credence to a YouGov poll that showed a pro-Brexit Labour party finishing third behind a pro-second referendum Liberal Democrat party, should Labour go into the next election backing Brexit and the Liberal Democrats opt to oppose it.

The difficulty for Labour is the calculation for the Liberal Democrats is easy. They are an unabashedly pro-European party, from their activists to their MPs, and the 22 per cent of voters who back a referendum re-run are a significantly larger group than the eight per cent of the vote that Nick Clegg’s Liberal Democrats got in 2015.

The calculus is more fraught for Labour. In terms of the straight Conservative battle, their best hope is to put the referendum question to bed and focus on issues which don’t divide their coalition in two, as immigration does. But for separate reasons, neither Ukip nor the Liberal Democrats will be keen to let them.

At every point, the referendum question poses difficulties for Labour. Even when neither Ukip nor the Liberal Democrats take seats from them directly, they can hurt them badly, allowing the Conservatives to come through the middle.

The big problem is that the stance that makes sense in terms of maintaining party unity is to try to run on a ticket of moving past the referendum and focussing on the party’s core issues of social justice, better public services and redistribution.

But the trouble with that approach is that it’s alarmingly similar to the one favoured by Kezia Dugdale and Scottish Labour in 2016, who tried to make the election about public services, not the constitution. They came third, behind a Conservative party that ran on an explicitly pro-Union platform. The possibility of an English sequel should not be ruled out.  

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