Sam Gyimah is the Parliamentary Under Secretary of State at the Department for Education, Parliamentary Secretary at the Cabinet Office and MP for East Surrey.
For many parents, the cost of childcare is up there with the rent or mortgage when it comes to family finances. The real worry is the wages that disappear straight away on the high cost of childcare, making a return to the workplace unviable for new parents. That’s why, as the new Childcare Minister, I’ve ensured that the government’s plan for childcare has three key aims: affordability, flexibility, and quality.
Our long term economic plan is delivering unprecedented opportunities for mothers in the workplace, with 14.4 million women in work today – up 60 per cent since the early 1970s. Around two-thirds of mothers in the UK now work, meaning that dual income couples are now the norm.
Whilst no-one could deny that this is a good thing for our economy and the future of our country, it does mean some pretty big changes in the way we care for our children. With both parents working, and perhaps less able to rely on family and friends for support than in the past, some families find it a real challenge to get the right childcare provision.
But, as all the evidence tells us, childcare is about much more than somewhere to leave your child where they will be safe and happy. It’s also about their development and future.
This is why, as part of our plan, this government is spending £5 billion – rising to £6 billion – a year on childcare over the course of this Parliament. And our commitment doesn’t end there: we’ve also put in almost another £1.5 billion to make sure that the families that need it most benefit from the government’s help to support their children. These numbers are huge. We’re pumping billions into the sector.
But as a new parent myself I know that, for many parents, what matters is what government help means for their families on a month by month basis; and what matters is the amount of money they have left over after paying for the essentials to enjoy life with their family. That is why I am launching a campaign to show parents the cash value of the childcare support they get.
The good news is that, after years of ever-rising prices, the costs of childcare in England have stabilised for the first time in over a decade. And as a result of the action we have taken, there is now more support than ever before for parents.
Under this Government, the entitlement to free childcare for three and four year olds has increased from 12.5 hours a week to 15. This equates to a saving of £2,200 per year. For the first time, deprived two year olds also get 15 hours of free childcare. Parents on tax credits can also claim back against additional childcare hours, saving them almost £6,370 per year.
And, when tax-free childcare is introduced in autumn 2015, the Government will contribute to 20 per cent of childcare costs – capped at £2000 per child per year. This will benefit two million families with children up to 12 years of age. We also know that the world of work is changing, and fast. That’s why, for the first time, working parents who are self-employed, or whose employers don’t offer employer supported childcare, can also get extra support.
But let’s look at what this means for an average family in England. A working couple with one three year old, earning a middle income could be facing bills of £8,000 per year for childcare if they didn’t receive any help from the Government. With the 15 hours free entitlement and support from tax free childcare, the family could be supported to the tune of 43 per cent. That’s almost a three and half grand saving, that could go towards a house deposit; a new car; or it’s simply an extra few hundred pounds a month towards enjoying life.
For a working couple with one three year old on a low income, support through working tax credits means the government could fund up to 79 per cent of childcare costs – that’s over £6,000 per year – a saving of £500 per month. This is why I genuinely believe Conservatives are the party of childcare and the family.
The Labour Party is promising parents a big increase in the number of free hours given to three and four year olds, with £800 million from the bank levy. The problem is that, yet again, their numbers don’t add up. They’ve already pledged to spend the same money in 11 different ways – from investment in housing to tax credits to capital spending. And the true cost of the increase in hours would be at least £1.5 billion. The Labour plan is a “childcare con”.
So a lot has been done and there is more to do to support parents, combat disadvantage and drive social mobility. We have a moral mission to get this right, and we should let parents know that Conservatives are committed to delivering on this.