Arguments for universal childcare have been around ever since investing in early years became a political priority under the previous Labour government. Many believe that the high cost of providing a universal system of childcare rules it out as an option in these straitened economic times. I beg to differ and here are three key reasons why Labour’s policymakers should be looking at it as a serious manifesto commitment.
First, introducing universal childcare will save the state money, rather than increasing borrowing over a parliamentary term. The IPPR has worked out that there is a net return to the government of £20,050 (over four years) in terms of tax revenue minus the cost of childcare for every woman who returns to full-time employment after one year of maternity leave. So this policy would be a prime example of why it’s right to invest now to save later.
Labour has consistently made the argument that we should prioritise spending which reduces the deficit. According to the TUC, women are the majority of underemployed workers and the number of underemployed women workers has risen by 40 per cent since 2008. By enabling women to go to work, the net benefit to the exchequer is £4,860 per mother who is in paid employment.
Second, universal childcare is important to redress the inequalities women face when it comes to childcare and the cost to their earnings potential. I’ve lost count of the number of mothers I’ve met on the doorstep who have left work to look after their children because the figures just don’t add up. If you spend all week away from your kids, just for your entire salary to be spent on the childcare, it’s no wonder that mums (and it’s still mostly mums), choose to do the childcare themselves.
The gender pay gap stubbornly persists in this country, which means that it is usually the mother in a family who chooses to forgo her job, rather than the father who has higher earning power. If women don’t have to choose between their job and childcare, it is less likely that women will compound the inequality gap in pay by dropping out of the job market just when they need to be rebuilding their career.
Third, we know that high quality, affordable childcare, is incredibly important for a child’s life chances, particularly those from the most disadvantaged backgrounds. The effective provision of pre-school education (EPPE) study found that children who attended high quality early years education achieve higher results in language, reading and numeracy, even once family background had been accounted for. This was one of the reasons for introducing Sure Start, but making the provision universal could help to once and for all break the link between parental income and a child’s life chances. It goes without saying that every parent wants their child to have the best start in life – what better signal could Labour send that we want to help them?
On the doorstep it is easy to see why an offer of state-funded childcare for children between 1 and 5 years old would appeal: it would pay for itself in increased tax revenues; it would give women and men a real choice about how they raise their children; and it would contribute to their children’s future wellbeing. While real terms average wages have fallen by £1,600 a year under the current government, average childcare costs have increased by more than 6 per cent – more than double the rate of inflation. It is the East of England and the South East which have seen the biggest rise in childcare costs over the last year – precisely where Labour needs to win seats to form a majority government.