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Cameron readies childcare package

6 January 2013

1:57 PM

6 January 2013

1:57 PM

David Cameron and Nick Clegg will launch the coalition’s mid-term review tomorrow. There will be some announcements in it. But I understand that some of the most interesting, new coalition policies are being held out from it. The government wants to keep some of its powder back for later.

There are also some final details to be worked out in certain areas. I’m informed that there’ll be a Quad on childcare this week. The coalition is close to agreement on a package which, as I say in the Mail on Sunday, would see working mothers receive thousands of pounds of help with childcare costs for the under fives. This will follow on from moves to liberalise the sector which will be announced in the next week or so.

In private, Cameron calls affordable, quality childcare the ‘Holy Grail’ of British politics. He knows that this would ease the squeeze on family budgets, help those parents who want to go back to work and send a potent message that the Conservatives are on the side of working mothers. At the moment, there is little financial incentive for those earning less than £40,000 to return to their jobs in the first few years after they have given birth.

The precise working of scheme is still being thrashed out. Some are pushing for a third of the cost of childcare to be tax deductible (see Sunday Times report), others are arguing for a voucher-style system that would be simple to administer—and, arguably, fairer—as it would be worth the same regardless of income. Interestingly, this policy will make up for the loss of child benefit in the case of higher income families where both parents work. I wonder what stay-at-home mothers will make of this.

At the moment, the favoured model would see working mothers receive a fixed amount of the £9,000 a year cost of childcare for someone under five. A working mother with two children under five could be as much as £5,000 a year better off under this scheme.

In Number 10, this policy is being treated as a ‘personal priority of the Prime Minister’ — meaning it is unlikely to get caught in the system. In a sign of the political importance attached to it, I understand that his senior advisers are pushing for Cameron to announce these changes himself in a speech later this month.

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