IEA responds to government’s childcare package


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Victoria Hewson writes for The Telegraph

Tax and Fiscal Policy
Commenting on the government’s package to reduce the cost of childcare, the IEA’s Annabel Denham said:

“Government intervention in childcare is an expensive mishmash of ill-conceived policies. Subsidies cost the taxpayer at least £6bn per year, yet parents here pay on average three times more than those in France or Germany. It is therefore encouraging that ministers are exploring how deregulation – rather than yet more government spending that would fail to address the underlying problems – can drive down costs.

“The renewed emphasis on childminders, whose numbers plummeted as the sector became increasingly formalised, is welcome. Where in the mid-1990s, there were over 100,000 childminders, the latest data show this has fallen to below 40,000. The move would signal an understanding that many parents want – and need – part-time help with their under-4s rather than a full-time educational experience. Slimming down the Early Years Foundation Stage will open up childminding to more groups, making this lower-cost option more widely accessible.

“Rather than campaign to increase take up of tax-free childcare, government should scrap the scheme. Given the weak case for general subsidies to childcare, a benefit that likely disproportionately helps the middle-classes is difficult to justify.

“As with any attempt to slash red tape, these measures will be met with fierce opposition by vested interests – such as companies that have already had to adapt to these restrictive rules, or individuals who believe the state can do a better job of raising children than parents. Ministers should proceed regardless.”

ENDS

Notes to editors

Contact: [email protected], 07763 365520

IEA spokespeople are available for interview and further comment.


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