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.
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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.

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 

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

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.