Free childcare for millionaires, nothing for mums at home

Under the plan the Conservatives announced last weekend, a parent earning £1 million a year could get free childcare, but a mother who gives up work to look after her own baby gets none of it. Asked about that on the BBC, Kemi Badenoch said, “It doesn’t matter what you earn”. Her test is that “what matters is that people are out there working” – so a mother at home doesn’t count at all. As under the Government’s own scheme now, both parents must be in work. The most the tax system gives her and her husband for being married is £252 a year.

David Paton, Professor of Industrial Economics at Nottingham University Business School, has a better answer. Help for young families, he says, should put “the ball in the parents’ court”. I spoke to him about the birth rate, which fell again last year in England and Wales, to 1.39 children per woman, and what marriage has to do with it. You can watch our discussion here.

Marriage, David explains, used to be “a route towards stability and security”, and now couples see it as “the consequence of being secure”. Yet when two people set up home together, he points out, their benefits go down, which “can discourage families to get together”. A mother at home with a one-year-old is £5,700 a year worse off if she marries or moves in with her child’s father on £20,000 a year, the Centre for Social Justice has calculated. That’s the couple penalty.

David would rather the money went into Child Benefit for every family than into childcare alone, so that “some mothers will go back to work part-time, some will delay for a little bit, some will want to stay at home”.

Some will say families should be helped only through the tax system, and ideally, they would be. But if the state is going to have a childcare pot, it must be open to the parent or grandparent who looks after a child at home, not only to a nursery. The Shadow Education Secretary, Laura Trott, said the pledge would give parents “the freedom to make decisions about work and childcare based on what is right for their family”. It won’t, because it pays out only when both parents are in work.

The tax system makes it worse. The Marriage Allowance lets the parent at home pass on just a tenth of their tax-free allowance. One parent earning more than £80,000 means a family pays back all its Child Benefit, while two parents on £59,000 each keep every penny. David would let the parent at home hand over the whole allowance, so “you’re assessing taxes at a household level, not just benefits”.

The Chancellor can put this right in the Budget on Wednesday 28 October.

Please write to your MP before then – again, sorry. Make these three points for inclusion in the budget:

1. While the state pays for childcare, the parent or grandparent who looks after a child at home must get the same help.
2. A parent at home must be able to pass their whole tax-free allowance to their husband or wife.
3. The couple penalty must come out of the benefits system.

Put them in your own words, or they get ignored.

More than half of last year’s babies in England and Wales were born within marriage or civil partnership, a share that has risen three years in a row. David wants “a positive culture which welcomes marriage and children”. At C4M, we know the married family is the best place for a child to grow up, and we call on the Chancellor to stop penalising it. Do watch David’s interview and pass it on.