James Frayne is Director of communications agency Public First and author of Meet the People, a guide to moving public opinion. The focus of this column is Theresa May’s conservatism for “ordinary working people”.
Childcare for those “just about managing”.
The Government’s childcare policy is expensive and confused. Expensive because of a combination of subsidies – recently the introduction of free childcare for three- and four-year-olds – and burdensome regulation. Confused because it constantly muddles up desires to: (a) persuade women into the labour market (often informed by politicians’ experience of upper-middle class professional women, rather than the majority); (b) improve early years education (usually an acute issue for the most deprived, rather than the majority of parents); and (c) relieve parents of massive costs.
It’s one of the many policies distorted by the unthinking view that the world is made up of the very poor and the wealthy, with no one in between.
That doesn’t mean there’s no problem to solve. A recent survey found almost one in five couldn’t get a mortgage because of childcare costs. While my polling of the Just About Managing for Policy Exchange found childcare was low down the overall list of policy priorities for families (presumably partly because it hits families for a relatively short period of time, and partly because the Just About Managing are more likely to stay at home or rely on grandparents) it was high up for specific “family friendly” policy options.
Childcare is a classic example of a high consumption cost that could usefully be smoothed over time – just as we do for the cost of education and housing through student loans and mortgages. The time when families are trying to buy a house is also a time when they are likely to be struggling with childcare costs and possibly still repaying student loans. This is a big triple whammy.
The difficulty is supporting families in a way that doesn’t unnecessarily distort their choices. For example, childcare loans would discriminate against parents who lose income in other ways – namely by choosing to stay at home and look after their children. It would also continue to push people away from small childminders, for whom loan administration would be a huge burden, and from grandparents.
Government should help parents struggling with short term costs and do so in a way that suits those parents. One of the least distorting ways to do this would be through the tax system. By allowing parents “tax breaks” that were breaks, not subsidies, you could allow them to lower their taxes now and pay extra a decade later – when dependents were much less costly.
This effective loan through the tax system would not have the degree of regulations and controls required by other forms and would give parents a well-earned break. Crucially, it could be signalled that it was designed with the bulk of ordinary parents in mind – who work part-time, often at unsociable hours and who are also loving and perfectly capable of making good decisions for their families – by giving them ultimate flexibility. This would be more sensible for both the taxpayer and the parents than the endless highly regulated freebies Government increasingly doles out.