Cristina Odone is Head of Family Policy at the Centre for Social Justice.
“They shouldn’t have children if they can’t afford them.”
I heard this familiar refrain often, when I was growing up, directed at lone mothers raising a brood of kids on welfare. Why should hard-working tax-payers shell out so someone could slob about the house in pyjamas and curlers, children at their feet?
That was America, in the 1970s. But a spirit not dissimilar is at work in twenty-first century Britain. The state sees no reason to help mothers who don’t work.
Yes, the Government, which offers up to 30 hours of free childcare for three and four-year-olds to families, will extend this to mothers who have been furloughed.
The policy has packed a less than powerful punch for low income families: at a recent extraordinary witness session of the Early Years Commission run jointly by the Centre for Social Justice and the Fabian Society, participants reported that because there “is no norm of pre-school offer” and the offer is too complicated, the share of childcare spending on low-income families has fallen by close to half, from 45 per cent to 27 per cent.
The aim was to promote female participation in the labour market. Successive governments from New Labour on have regarded this as a priority: more taxes raised, less benefits paid. It makes financial sense when you calculate that £16.7 million is lost every year in potential tax gains and benefits paid to mums who have not returned to work.
A tax system that treats us as single units seems equally sensible. We may be parenting the same children, but we regard ourselves as autonomous individuals, judged on our own merit.
This mindset suits many women. High-profile and professional, they regularly take to social media and the airwaves to hail free childcare for liberating women, and limit their asks to equal pay for equal work, flexi-time at the office, more part time opportunities – and maybe a creche at work.
These women have a well-paid career – or a wealthy partner or spouse. They can afford to spend the first years of their children’s lives off work, or to hire a nanny or au pair. They will still multi-task crazily, taking on maternal and professional tasks. They will still bridle at the glass ceiling that persists across almost every industry. But they can afford a family.
Slide down the earnings ladder to the woman for whom work amounts to a job, not a high-flying career. How can she afford to raise a family? She would love to stay home to care for her children, provide a role model for them, share with them her own parents’ values and traditions. She senses what neuroscience confirms: that those first 1001 days from conception are key in a child’s development. And even later on, schools may offer a great deal – but until they are 14, a child spends 84 per cent of their time at home.
This working mother loses out on every front. After tax, her spouse’s income is not enough for the family to survive on, so she must work too. Neither partner can afford to work part time: anything less than what they earn now would spell penury. She can’t do overtime, though, without worrying about leaving her children vulnerable to gang-recruitment or child sexual exploitation.
The couple work all hours just to break even, and arrive home stressed and exhausted. Money worries and job uncertainty (McKinsey reports that women’s jobs are 1.8 times more vulnerable during the pandemic than men’s) rock the relationship. The family risks breakdown – with all the damage that this entails.
It need not be this way.
The Treasury could transform this mother’s fate by adopting a simple, tried and tested, approach: tax parents on their combined income, and offer them tax credits for each child. With this one move, the Chancellor would recognise the value of the family, and the important role parents play in forming the next generation.
Championing this fiscal model is a high-profile mother – the Miriam Cates, the recently-elected MP for Penistone and Stockbridge. Cates is socialising the idea at Westminster – and getting traction among women both sides of the House.
The present system, Cates points out, ignores total household income and parental responsibilities. A woman on £30,000 a year will pay the same amount of tax and national insurance, regardless of whether she is living on her own, without children, or is a lone parent with three dependent children.
Cates was inspired by the way the German tax system takes into account the significant costs, in terms of time as well as money, of raising children. By taxing couples on their combined income, Germany promotes rather than penalises single earner families. In this country the opposite is true – so that a one earner couple with two children in the UK pays nine times the taxes that their counterpart in Germany will pay. The child tax credit – in Germany, this is £2500 – further contributes to a more family-friendly fiscal system.
For Cates, representing a Red Wall constituency, this is a key part of any levelling up agenda: why should raising children become an elitist pursuit? She has a point: a government willing to subsidise restaurants and pubs can surely subsidise children, too.
Being seen as a family-friendly government would prove popular – and not only among the socially conservative Red Wall voters. A recent CSJ survey found that 88 per cent of parents and 82 per cent of adults thought that more should be done to help parents who wish to stay at home and bring up their children in the early years.
The benefits of incentivising one-earner families extend well beyond the home. The present system, which steers everyone into paid work, undermines the other kind of work – the unpaid, altruistic volunteering that has proved key to the country’s resilience during the pandemic. Mothers are not the only ones who have, or should, volunteer; but again and again, they ran the PTA, helped with the church bazaar, offered to shop for the octogenarian neighbour. Help them to be in a position to raise their children and they will be in a position to help the rest of us too.
The Chancellor should stop treating us as atomised individuals, freed of any relational moorings. Families cannot be ignored, nor should they be punished. They could even, dare I say it, be encouraged.