Politics

Liberal Democrat manifesto: The childcare wars

All three parties' promises on childcare are pitched at better off families, while the poorest are left out

September 03, 2014
Attempts to pump government money into childcare may drive up costs
Attempts to pump government money into childcare may drive up costs
Who said what to whom? In the latest sally of the childcare wars, the Liberal Democrats have said their manifesto will promise to provide free childcare for all two-year-olds.

What does it mean? It’s no carte blanche for childcare, instead they are offering 15 hours free childcare for two-year-olds. It will be paid for in part by scrapping the transferable tax allowance for married couples, a Conservative initiative in the Coalition programme. The Liberal Democrats say this proves that they have a different approach to their partners in government, standing up for families as opposed to privileging the institution of marriage.

Labour has criticised the Liberal Democrats’ announcement. Their counter-offer to parents is to extend the current 15 hours free childcare for three and four-year-olds to 25 hours. The think tank IPPR though, often not far from Labour thinking, is in this case a step removed and recently proposed exactly what the Liberal Democrats are now promising.

What could go wrong? Those in the poorest families are already getting the entitlement to 15 hours free childcare under the Coalition, as are three and four-year-olds. In that sense, despite the now familiar “fairer society” branding, the new Liberal Democrat measure is about doing more for middle- and high-income families. If the focus was genuinely low income families, then a better measure may be to improve the current offer of 15 hours to something more substantial just for them.

The Liberal Democrats have said that their long-term ambition is to increase the 15 free hours to 20 hours. But, they want to include everyone that is eligible, rather than target the increase. And it seems that before they go from 15 to 20, their ambition is to extend the 15 hours offer to all children between the ages of nine and 24 months from families where both parents work. This is particularly regressive in its effect. Families where both parents work are much more likely to feature higher up in the income distribution than families where only one parent is in work or, heaven forbid, there is only one parent.

When will we know? The hints from Labour are that extending the current 15 hours offer for three and four-year olds to 25 hours may be the limit of what they can afford in their future spending plans. The Conservatives may be more likely to continue down the path of providing tax relief on childcare expenditure, a state benefit that kicks in next year for families with incomes all the way up to £300,000 per year.

Frankly, the measures from all the parties are pretty unfocused ways of using limited public spending. However, they do give us useful information about their electoral appeal—all the measures are designed to appeal centrally to middle-income families, not the poorest, not single parents. In other words, the kids who may have the greatest need for state funding in order to access some early years education aren’t getting as much as they might.