Cameron's plan to force schools to take two-year-olds is pie in the sky policy

Unless there is investment to help schools build nursery classrooms, this announcement is meaningless for parents.

Yesterday I gave a speech in front of 400 early years providers and professionals. Their dedication and commitment to supporting parents and children shone through their questions and comments. However, so did their concern for the families faced with difficult decisions over childcare, as a result of David Cameron’s childcare crunch.

Under this government, families facing a cost-of-living crisis are being hit with a triple whammy in childcare. Early years places have fallen by 35,000 and childcare costs are soaring, up 30 per cent since 2010. Nursery costs have risen five times faster than wages and the government has cut the amount of help families receive through tax credits, making it harder to make ends meet.

This week's headline grabbing announcement from the government shows us that they think telling schools to take two-year-olds is the answer to the problems they have created in childcare. But this announcement is complete pie in the sky that will do little to help families struggling with childcare, and will put further pressure on our primary schools. The reality is that David Cameron has already created a primary school places crisis, with 240,000 places needed by this September. Many of our best primary schools are already oversubscribed and schools are struggling to take on extra reception classes, let alone two-year-olds.

Whilst Labour believes that schools can play an important role in caring for pre-school children, it is pie in the sky from ministers to suggest that schools taking on more two-year-olds will be cost neutral. Unless there is capital investment to help schools build nursery classrooms, this announcement is meaningless for parents. It is nothing but further proof that David Cameron has no plan to tackle the rising childcare costs and fewer places that parents are facing under his government.

The government is already failing to provide enough places for the 20 per cent most disadvantaged two-year-olds, with 38,000 missing out on the places they were promised. We know from Freedom of Information requests that one in three councils do not have enough places for two-year-olds now and this is set to get worse when the scheme is expanded next September. Alongside the lack of availability, the government is doing nothing to drive up the quality of childcare places in this scheme, with the Sutton Trust calling on the government to delay the roll-out to ensure more quality places be found.

There are other questions too about what a classroom for two-year-olds would look like and whether parents want this kind of provision for their children. We already know that two-year-olds need specialist care and support which is very different from older children, and this raises concerns about the quality of care for two-year-olds. Minister Liz Truss has long been an exponent of loosening the childcare ratios for young children and increasing the number of children childminders and nursery workers can look after. This flies in the face of advice from experts, who say this would risk child safety, damage the quality of care and would not bring down costs for parents.

For the government to now try and push its own failings with childcare onto the shoulders of already pressured primary schools is both irresponsible and unworkable. Labour would tackle the problems with childcare that parents are facing, extending the provision of free childcare for working parents of three and four-year-olds from 15 to 25 hours and introducing a primary childcare guarantee to help parents manage before and after-school childcare. Whilst David Cameron and Liz Truss might see primary schools taking two-year-olds as the silver bullet after their failure to loosen the childcare ratios, back in the real world, this announcement will do little to help the hardworking parents who are struggling day-to-day with the difficult choices they have to make on childcare and the strain that this government has put on family life.

Lucy Powell MP is the shadow minister for childcare and children  

David Cameron talks to two-year-old Theo during a visit to a London Early Years Foundation nursery on January 11, 2010. Photograph: Getty Images.

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

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I was wrong about Help to Buy - but I'm still glad it's gone

As a mortgage journalist in 2013, I was deeply sceptical of the guarantee scheme. 

If you just read the headlines about Help to Buy, you could be under the impression that Theresa May has just axed an important scheme for first-time buyers. If you're on the left, you might conclude that she is on a mission to make life worse for ordinary working people. If you just enjoy blue-on-blue action, it's a swipe at the Chancellor she sacked, George Osborne.

Except it's none of those things. Help to Buy mortgage guarantee scheme is a policy that actually worked pretty well - despite the concerns of financial journalists including me - and has served its purpose.

When Osborne first announced Help to Buy in 2013, it was controversial. Mortgage journalists, such as I was at the time, were still mopping up news from the financial crisis. We were still writing up reports about the toxic loan books that had brought the banks crashing down. The idea of the Government promising to bail out mortgage borrowers seemed the height of recklessness.

But the Government always intended Help to Buy mortgage guarantee to act as a stimulus, not a long-term solution. From the beginning, it had an end date - 31 December 2016. The idea was to encourage big banks to start lending again.

So far, the record of Help to Buy has been pretty good. A first-time buyer in 2013 with a 5 per cent deposit had 56 mortgage products to choose from - not much when you consider some of those products would have been ridiculously expensive or would come with many strings attached. By 2016, according to Moneyfacts, first-time buyers had 271 products to choose from, nearly a five-fold increase

Over the same period, financial regulators have introduced much tougher mortgage affordability rules. First-time buyers can be expected to be interrogated about their income, their little luxuries and how they would cope if interest rates rose (contrary to our expectations in 2013, the Bank of England base rate has actually fallen). 

A criticism that still rings true, however, is that the mortgage guarantee scheme only helps boost demand for properties, while doing nothing about the lack of housing supply. Unlike its sister scheme, the Help to Buy equity loan scheme, there is no incentive for property companies to build more homes. According to FullFact, there were just 112,000 homes being built in England and Wales in 2010. By 2015, that had increased, but only to a mere 149,000.

This lack of supply helps to prop up house prices - one of the factors making it so difficult to get on the housing ladder in the first place. In July, the average house price in England was £233,000. This means a first-time buyer with a 5 per cent deposit of £11,650 would still need to be earning nearly £50,000 to meet most mortgage affordability criteria. In other words, the Help to Buy mortgage guarantee is targeted squarely at the middle class.

The Government plans to maintain the Help to Buy equity loan scheme, which is restricted to new builds, and the Help to Buy ISA, which rewards savers at a time of low interest rates. As for Help to Buy mortgage guarantee, the scheme may be dead, but so long as high street banks are offering 95 per cent mortgages, its effects are still with us.