After Labour's offer, the political battle on childcare has heated up

The party needs to show how new 'guarantees' will be delivered. If not, the Tories, with their offer of more money in parents’ pockets, could win the all-important female vote.

Earlier this week, Labour retook the initiative on childcare with the announcement of a major extension in free care for three-and-four-year-olds. Having been the party that established childcare as a new frontier of the welfare state when in government, Labour’s lack of a clear policy direction over the last year had left room for the coalition to creep in with its proposals. A YouGov poll for the Resolution Foundation conducted before the announcement revealed that even Labour supporters felt that the Lib Dems had better ideas on childcare than their own party. But Labour has come back with force. Will its ideas on childcare help it reclaim the all important women’s vote – a major battle ground at the next election? And will the Tories try to reclaim the initiative next week in Manchester?

Children aged three and four are currently entitled to 15 hours of free early education and care. Labour's plan would extend that free entitlement by a further 10 hours for families with working parents. One of the central complaints about the existing free entitlement is that it is just too short to help second earners – usually mothers - to work part-time. This is because when it was introduced it was designed around child development not the labour market. But with living standards now the dominant issue for all political parties, the extension to 25 hours is intended to make a part-time job possible.

Labour also set out a bold offer for parents of primary age children – a guarantee of childcare before and after school. While childcare for under-fives is more expensive, parents of older children struggle with the mismatch between the school day and the working day. Unless childcare can be easily wrapped around the school day, keeping a job can be a challenge.

Despite a decade of investment by government, the cost of childcare is still a major issue for families. A poll of 1,000 users of the parents’ website Mumsnet for the Resolution Foundation in advance of Labour conference found that nearly half of all respondents said that they found it more difficult to manage the costs of childcare in the past year compared to only one in 10 who thought the situation had improved. In fact, those who can are increasingly relying on grandparents or other types of informal care to reduce their childcare bill.

More free hours of childcare, as Labour has proposed, will definitely help to make work pay, particularly for lower-earning women for whom the costs of childcare eat up a large chunk of every extra pound they earn. The extension of the free entitlement and the guarantee for older children are also clearly distinct from the coalition’s current proposal announced at this year’s budget to create a new childcare voucher for better-off parents. The coalition has chosen to put more money in parents’ pockets; Labour to ensure more free provision is available.

With competing proposals in place, there is a lot to play for politically. When asked which of the parties has the best ideas on childcare, four in ten Mumsnet survey respondents said "none of them" and almost as many (38 per cent) answered "don’t know". Only 11 per cent named Labour and four per cent both the Conservatives and Liberal Democrats as having the best ideas on childcare.

If Labour can deliver on its announcements and communicate them to parents, it has a clear opportunity to win over the undecided majority. Here the concept of a 'guarantee' is a useful approach. But it will only work in Labour’s favour if parents can get the childcare to which they are entitled. This is where the risk lies for Labour. There are long-standing problems with access to the existing 15 hours entitlement because it is underfunded. Labour needs to ensure that any new entitlements and 'guarantees' can be delivered. If not, the Tories, with their offer of more money in parents’ pockets could grab the all-important female vote. 

Chancellor George Osborne during a visit to a nursery in Hammersmith on August 5, 2013 in London. Photograph: Getty Images.

Vidhya Alakeson is deputy chief executive of the Resolution Foundation

Photo: Getty
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Germany's political stability could be threatened by automation

The country's resistance to populism may be tested by changes to its manufacturing industry.

Germans head to the polls this Sunday 24 September. With Merkel set to win a fourth term as Chancellor, it has been dubbed a "sleepy" election – particularly compared to the Dutch and French campaigns a few months ago. Populism, while present, has not taken off to the same extent as in Germany’s neighbouring countries.

In a new Legatum Institute report co-authored with Matthew Elliott, we explore in detail why this is the case, evaluating the historical and economic circumstances as well as social, cultural and political attitudes. In short, support for both the populist Left Party (Die Linke/DL) and for the populist right Alternative for Germany (AfD) has so far been concentrated in former East Germany. At the national level, it has therefore been hard for either party to win more than around 10 per cent of the vote.

However, a longer term trend that might disrupt German politics in future election cycles is automation. With manufacturing making up a large proportion of the German economy, a significant amount of jobs are set to shift between occupational groups. According to the OECD, the portion of jobs at high risk of automation in Germany – 12 per cent – is one of the highest among countries measured.

While the elimination of some jobs and occupations does not necessarily mean net job losses – on the contrary, BCG estimates a net increase of 350,000 jobs by 2025 – it does mean upheaval, both in the job market and in the political sphere.

On the job market front, Germany has a shrinking pool of skilled labour. The Association of German Chambers of Commerce and Industry (DIHK) consider this poses the biggest risk to their businesses. The government is acutely aware of the issue – its August 2017 progress report projects 700,000 fewer skilled workers in 2030 than in 2014. Moreover, with an ageing population, the demographics are currently not in Germany’s favour.

Resolving this issue will require big and difficult political changes. On the one hand, it means that more immigration, particularly of young skilled workers, will likely be necessary. Given the backlash to Merkel’s "welcome" policy at the height of the refugee crisis, an anti-immigration sentiment was stirred which was dormant before.

On the other hand, while new jobs will be available, this does not necessarily mean that from one day to another that those working, for example, in manufacturing, will be keen to move into the service industry or another occupation altogether. Nor does it mean they will want to, or even perhaps be capable of, reskilling to carry out new digital roles.

In the UK and the US, we recently witnessed how these labour market changes were one of the big factors associated with support for the protectionist and anti-immigration rhetoric of the Leave campaign for Brexit and Donald Trump for president.

In Germany, the regions most exposed to the effects of automation are in the industrial south and west – parts of the country so far spared from the worst of populism. The potential for populist support to expand at the national level should therefore worry observers. To its credit, the current government has already been thinking about it, as evidenced in the Work 4.0 White Paper.

However, policy choices in the next few years will be crucial for mitigating the future labour market and political shockwaves of automation. If politicians choose to merkeln (do nothing) on the issue, the populist backlash might hit Germany, too.

Claudia Chwalisz is a consultant at Populus and a fellow at the Crick Centre, University of Sheffield. She is the author of The People’s Verdict: Adding Informed Citizen Voices to Public Decision-making (2017) and The Populist Signal: Why Politics and Democracy Need to Change (2015). Her guide to the German election authored with Matthew Elliott can be downloaded here