Tax and Fiscal Policy

More state interference will make childcare more expensive


Economic Theory

Alexander Hammond writes for CapX

Annabel Denham writes for The Spectator

IEA Director of Communications, Annabel Denham has written on the problems with childcare policy, arguing that spending more taxpayers’ money on subsidies will fail to improve the issue of rising demand and falling supply.

In an op-ed for The Spectator, Annabel claims government subsidies, which are below the market rate, have increased costs on parents who’s children need additional care or are self-funded through cross-subsidisation. Regulation on teacher-to-child ratios has also restricted supply by increasing wage bills for nurseries and diminishing profits.

Annabel said: “Already, pupils in Britain begin primary school younger than on the continent. There is no need for them to be assessed – or parented – by the state any sooner. We should unwind this misguided experiment and use it as a case study to discourage government interference in other areas. The alternative is yet more subsidies that sap pluralism from the market, strip parents of choice, and allow costs to spiral for all involved“.

Read the full article here.