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We need to end the childcare crunch on our families and the economy

Families have been hit by a triple whammy in childcare: rising childcare costs, falling early years places and cuts to financial support.

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

Today's important report from the IPPR lays bare the difficulties David Cameron's childcare crunch is causing for parents and for our economy. The report shows that maternal employment rates in the UK are lower than the OECD average. It finds that if we had a childcare system that worked for working mothers, we'd be able to help an extra 150,000 women into work, benefiting the public finances by up to £1.5bn a year.

Yet families have been hit by a triple whammy in childcare under this government: rising childcare costs, up 30% since 2010, falling early years places and cuts to financial support. David Cameron's cost-of-living crisis has meant parents are struggling to make ends meet and it is even more difficult for work to pay. A recent survey for Mumsnet and Resolution Foundation recently found that a third of stay-at-home mums would like to work and a fifth of those in work wanted to work more hours but couldn't because of the soaring cost of childcare. Mothers working part-time earn about 22 per cent less per hour than women working full-time, with women reporting problems accessing before and after school care. The biggest employment gap is for mothers of three and four year olds.

Flexible and affordable high quality childcare can boost the economy and make a difference for mums and dads, helping them make choices about going back to work and to work the hours they choose. This not only helps grow the economy, but it helps tackle the unfair motherhood pay penalty women face when they return to work after having children. Labour is investing in childcare to grow our economy, help make work pay and give children the best start in life. Our plans to increase free childcare provision from 15 to 25 hours for three-and-four-year-olds with parents in work will make a real difference to families struggling under this government. It will give parents choice about increasing their hours or returning to work after caring for young children. Worth £1,500, parents will be able to work part-time without having to worry about childcare costs. Guaranteeing before and after school care in a local school will help parents with the logistical nightmare of before and after school care. This primary childcare guarantee will support parents balancing work and family life.

We know women who take career breaks face a pay and status penalty for the rest of their lives. Affordable, flexible high-quality childcare is part of the answer to ensuring that parents have choices to meet their aspirations for their families. There is a gap in support at the critical 0-2 years period and I'll continue to champion support for families at this crucial time when parents make choices about returning to work.

Labour understands this dilemma and is working to alleviate the childcare crunch families' face. As we move towards the election , childcare will be centre stage and this IPPR report shows just how high the stakes are for families and the economy if the government continues to get it wrong.

Lucy Powell MP is the shadow minister for childcare and children