Artillery Row

Ending Britain’s childcare arms race

What is the end goal of extending childcare provision?

In the UK, childcare has become something of a political football. The two major Parties are locked in a childcare arms race, competing to offer more and more hours of “free” childcare to parents of young children.

In March, the Chancellor of the Exchequer raised the stakes, committing to extend full time state-funded childcare provision to babies from the age of nine months in a considerable expansion of the current offer for over threes. Last week Labour hit back, outlining plans to create thousands of new nursery places as part of a “modernised childcare system” available from the end of parental leave (usually around six months). It seems the consensus political plan for babies is a few short months at home before being handed over to the State so that mummy and daddy can get on with the important national endeavour of generating GDP.

Because let’s be honest, while policymakers sometimes claim that childcare policies are about education — as if toddlers require formal instruction that only someone with official qualifications can be trusted to provide — the truth is that free childcare is all about getting parents back to work.

Now there may be good reasons for this, such as helping families to increase their income and concerns for national economic growth. But let’s not pretend that these motivations include the long-term best interests of children.

Infants may not be a target audience for politicians but, if the voting age was reduced to zero, (maybe one day in Scotland), my bet is that babies would not vote to be taken from their mothers and put in the care of strangers for hours and hours every day.

Perhaps surprisingly, this seems to be a contentious thing to say, especially on Twitter where a post I wrote to this effect on Friday has had 2.4 million views and counting. I may be new to this platform but I do know that going viral is not usually an indication of popularity. The Twittersphere — and the “progressive” establishment — very much wants to believe that it doesn’t make any difference who looks after babies and children, because it allows the unhindered pursuit of the liberal dream of full individual autonomy and the socialist dream of universal participation in the workforce.

But in reality, it does matter who looks after a baby. There is a wealth of evidence to support the importance for babies of a secure attachment with a single caregiver — normally the biological mother — and the negative consequences of this attachment being disrupted. For the State to actively encourage mothers back to the workplace as soon as possible is to completely devalue the irreplaceable role of mothering in the crucial first two years of a child’s life. It is also increasingly clear that there can be negative long-term impacts of long hours in institutional childcare for infants. There are many skilled and dedicated early years professionals, but as far as babies are concerned, mothers are not fungible.

This is not to say that there isn’t an important and beneficial role for formal childcare. The sector is highly valued by parents and plays a vital role in our social ecosystem. There are undoubtedly advantages of good nursery provision for preschoolers and the Government should not try to short-change providers. But this recent promised expansion of childcare marks a significant departure from the “preschool” model, with the offer of “free” places for babies as young as six or nine months old. As any parent knows, there is a world of difference between what is best for three-year-olds and what is best for an infant. If it is to be the Government’s policy — and therefore implicit recommendation — that babies start formal childcare before the age of one, it is incumbent on policymakers to set out the child development evidence to support that recommendation. I have yet to see this.

While we have to make assumptions about what babies want, thankfully we can use straightforward polling to find out the preferences of parents. Politicians and commentators often assume that mothers of small children want to get back to the workplace as soon as possible. This is certainly true for some and they should be supported to do so. Women should have just as much right to pursue opportunities in paid work as men. But polling consistently shows that two thirds of women would choose to work less when their children are young if they could afford to. In fact, nearly four in ten mothers of under fours would prefer to give up work altogether to look after their children.

This makes sense given that the emotional bond between mother and infant is one of the strongest there is. There are sound reasons why many mothers don’t want to leave their children for too long in the care of others during those crucial — but short — early years. I have never understood why feminists, who are surely interested in what women actually want, are so quick to dismiss the idea that many women find motherhood fulfilling, and prefer to look after their own children, even if that means making career and financial sacrifices.

But for so many families in 2024, theoretical arguments about what babies or mothers might want will be irrelevant. Whatever families wish for in an ideal world, in the real world parents must feed, clothe, and provide for their children. And, over the last 30 years it has become increasingly difficult for families to make ends meet on one full-time income, driving an increase in the number of parents of small children in full-time work and consequently more demand for formal childcare.

It is absolutely right for policymakers to seek to relieve pressure on family budgets. But instead of competing to offer more and more state-funded childcare as a sticking plaster on cost-of-living challenges, we should be addressing the structural reasons why family finances have become so stretched.

The key drivers for this are taxation and housing costs. Following tax reforms in the 1990s, British families pay far more tax than their OECD counterparts, thanks to our system of individual — rather than household — taxation. This, combined with frozen tax thresholds, and the way that benefits are withdrawn as income increases means that many families are paying effective tax rates of 70 or 80 per cent on every additional pound they earn. In this context it is almost impossible for one partner to increase their net earnings enough so the other can take time off to look after small children.

And over the last thirty years, the average house price has doubled from four times to eight times the median annual wage. If housing costs and taxation had remained static as a proportion of household income, British families would be better off by hundreds of pounds a month.

Trying to fix these structural cost of living issues through expanding state funded childcare provision is like buying a bigger pump to bail out water from a leaky boat. The only long term solution is to fix the boat, by reforming our tax system and implementing radical housing solutions like the one I proposed here.

But what about the case for the economy as a whole? UK productivity and GDP per capita have been stagnant for years. Could it be that nudging parents back to work is necessary for economic growth?

Again, we need to understand the structural issues behind the UK’s economic challenges. Wages and productivity have flatlined not because of parental leave, but because of unprecedented levels of low-skilled immigration, driven by labour shortages caused by 50 years of below-replacement birth rates. As Philip Pilkington argues here, it is this shortage of young people entering the workplace that is hindering economic growth.

More free childcare is not the solution to our national economic woes. According to the OBR’s forecast, current plans to extend childcare provision would see the return of 110,000 parents to the workforce. This would make little difference to the labour market — where there are currently around one million vacancies — and at a £4 billion cost to the public purse (£36,000 per parent), would represent a considerable net loss to the taxpayer.

Neither does it seem likely that reducing the cost of childcare would be an effective long-term strategy to increase the birth rate. The countries with some of the most generous childcare offers in the world — like Finland — are also those with the fastest falling birth rates.  A far more popular offer would be the CSJ’s plan for “Family Credit”, rolling together existing childcare budgets to be spent as parents wish — whether that is on formal childcare, a childminder, extended family, or using the money to help provide care themselves.

If politicians really want to improve family finances, then tax and housing reform are the only real solutions. But in the clear absence of any political appetite to address these two issues, taxpayer funded childcare seems to be the only option on the table. Sadly it’s an option that seems doomed to fail, given that in the current economic climate we have neither the money nor the workers required to deliver the number of childcare places that both political parties are promising. In fact, the sector continues to shrink with the loss of over 600 nurseries and preschools and 24,000 childcare places in the last year.

Perhaps before continuing the childcare arms race, policy makers of all political leanings should declare a cease fire and ask what is the end goal? The young, the old and the sick will always need care. If we move increasingly to a model where all working age adults are employed in the formal economy, this care work increasingly has to be done by paid workers, thus requiring more adults (often women on low wages) to enter the workforce.

Not only is this just a giant Ponzi scheme, it’s not what people want, and it’s not what the economy needs. Although “professionalising” all care work may give a superficial boost to overall GDP, it will do nothing to tackle the very serious issues of extortionate housing costs, stagnating wages, rising taxation and falling birth rates. Arms races do not end well.

A thriving economy requires thriving families, whose unique responsibility it is to raise the citizens, workers, leaders, carers and volunteers of tomorrow. Politicians should stop treating babies as a hindrance to economic growth and instead support the bearing and raising of children as the key to a strong, prosperous and productive nation. The State is a very poor substitute parent; it must stop trying to be one.

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