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Charlotte Salomon is Deputy Chairman Membership for Saffron Walden Conservatives.

They don’t do espresso martinis in Pizza Express: the workaround is to order wine and a coffee separately, together – and alternate. It was my first time out after having children; first time wearing proper outdoor clothes and Weetabix-free hair – and first time realising that the country had an unsolved problem.

Ok, I’ll concede the Government has pushed out well-meaning schemes; they’ve even introduced cosmetic grants to patch up the well-meaning schemes. However, nothing has really stuck to the wall. Try as they may, when it comes to childcare the Government has only tabled pacifier policies rather than practical ones.

My friends and I ate from a fixed menu, pretending we weren’t secretly resenting leaving the house whilst sleep remained a rare commodity – and, although it was difficult, we tried not to talk about our children. Scanning my brain for polite dinner conversation, I reached for normality. “When are you going back to work?”

I’d assumed it was an acceptable question to ask women who spoke openly about their careers pre-maternity leave. However, it struck an uncomfortable tone.

“What’s the point?” One mother replied. “My salary would barely cover nursery fees, along with extra travel expenses and possible late fees because y’know— trains. It doesn’t make sense.”

She was right. It doesn’t.

Many new parents are finding themselves in something called “pay-neutral” work. This means that their childcare and travel costs wipe out their entire net earnings. So when did returning to work after having children become a luxury only afforded to Britain’s wealthier parents?

The Government decided to switch out of childcare vouchers in 2017 for something called tax-free childcare. It gives parents up to £2000 per year per child, if eligible. This operates through an online Childcare account provided by National Savings & Investments (NS&I) in partnership with HM Revenue and Customs (HMRC). Households on low incomes who qualify for Working Tax-Credits are entitled to claim ‘the childcare element’, giving them up to 70 per cent of approved childcare provider costs.

Not all are eligible for tax credits, and considering that a full-time childminder will charge an average weekly rate of £217.30, and that a nursery could charge £232.84, parents in full time employment need to budget £10,000 – £12,000 per child (- £2000 if eligible for Tax-Free Childcare) on top of their basic living expenses.

The median annual income in the UK, according to the Annual Survey of Hours and Earnings, is £28,677 for full-time employees. If childcare isn’t affordable, is the Government really cutting the cost of living?

We encourage our young people to take out student loans, get an education, learn skills, build and climb the career ladder. We’ve built affordable homes and propped them up with help-to-buy schemes. This Government wants to see Generation Rent finally turn things around: this is the Government determined to see savings settling in millennial bank accounts. So why abandon them in parenthood?

According to research from the National Childbirth Trust (NCT), 29 per cent of women and 14 per cent of men have found that returning to work after having a child isn’t financially worthwhile. And it’s not as if the gods of good fortune are acting in new parents favour; one in four employers believe it’s fair to ask interviewees if they plan to have children, and the Equality and Human Rights Commission (EHRC) approximate that 54,000 women are losing their jobs each year after having children.

Three in five professional women returning to work after a break are likely to move into lower-skilled or lower-paid roles, experiencing earning reductions of up to a third (PWC reports); and according to the Fawcett Society, for each year a mother is absent from the workplace, her future earning potential will fall by four per cent.

Losing employees to parenthood isn’t free. If you underline the costs of hiring and training new staff, redundancy payouts and lost productivity, parents being pushed out the workplace are inflicting costs up to £280 million a year. And the echoing effect from the higher earnings and spending power lost could mean the economy is losing out on an extra £1.7 billion, according to PWC.

But there is a solution.

The Childcare Loan would possess the same skeletal model of the student loan, allowing parents affordable childcare up until the age of five when fulltime education kicks in (and beyond, if after-school childcare is required). Four years of fulltime childcare demanding £900+ in ongoing monthly payments – made bite size.

Giving parents the freedom to return to work quashes anxiety about potential lost earnings, missed pay rises and forfeiting promotions. Utilising the Childcare Loan, parents could choose to stretch childcare payments over time whilst they continue earning the salary they deserve.

Paid back over ten years (for example), fulltime childcare with the added 6.3 per cent interest could cost a family £4252 a year. Under the Tax Free Childcare Scheme, this would be almost double. Like the student loan, variants could be introduced to ensure that people on lower incomes pay a lower interest rate, and parents who become unemployed can ‘pause’ the loan until they return to work.

It would initially cost the Government over £2 billion to get those 54,000 women back into work by employing the Childcare Loan method, but when faced with the economic impact of losing workers to parenthood the Chancellors’ purse strings might loosen.  And there is that infamous rumour that we may have £39 billion up for reassignment.

47 comments for: Charlotte Salomon: Introducing the childcare loan

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