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Minister says countries with more childcare provision ‘pay more tax’

Minister for Families Will Quince (PA)
Minister for Families Will Quince (PA)

The children and families minister has said that countries with cheaper childcare provision pay more in tax as he introduced Government reforms on childminders in England.

On Monday, the Government announced a new consultation exploring a change to staff-to-child ratios from 1:4 to 1:5 for two-year-olds, which would bring England into line with ratios in Scotland.

Labour has said the proposed changes are “pathetic”, while Neil Leitch, chief executive of the Early Years Alliance, has said the plans are “beyond frustrating” and that the Government needs to admit “that if we want to have affordable, quality, sustainable care and early education in this country, we need to invest substantially more into the sector than we are doing at the moment”.

Mr Quince told the PA news agency that countries with more investment in childcare also paid more tax.

“We currently invest around £4-5 billion a year on childcare and early years’ education… there are other countries – France, Sweden, the Netherlands – who do put far more money into early years’ education,” he said.

“They also pay a lot more in tax; so take Sweden for example, where nearly all of your childcare costs are covered – even the lowest paid workers pay 35% tax, whereas we’ve lifted millions of people out of paying tax altogether.

“So these are all choices that we need to make.

“One thing we can’t do in any way is compromise the quality, we have some of the best early years’ education… in the world, and those other countries I’ve visited look at our systems and education outcomes and school readiness with some envy.

“So I think it’s important that in the medium to long-term we look at what more we can do without compromising quality and safety to improve the affordability for families up and down the country.”

Playground stock
Children enjoy playing on swings (permission granted) (Gareth Fuller/PA)

Childcare in Sweden is set at a maximum of 3% of guardians’ yearly income for the first child, and for a fourth child it is free of charge.

Asked about pushback from the sector over the reforms, and the fact he has said the ratio reform will be no “silver bullet” for issues in the sector, Mr Quince said these comments “related specifically to the ratio reform” which he described as a “relatively minor change and a smaller part of the package of measures that we are announcing”.

“Alongside that we’ve got a consultation on fairer funding, so making sure that the funding reflects the costs across the country,” he said, adding that the Government had invested an an extra £10 million for maintained nursery schools and an expansion of childminders.

He added that what would be “game-changing in terms of cost” would be ensuring that the hundreds of thousands of parents not claiming tax-free childcare took this up.

The minister said the Government was running a communications campaign to raise awareness that families are entitled to up to £2,000 per year towards their childcare costs tax-free, while those on Universal Credit could recover 85% of their childcare costs from Government funding, while disadvantaged two-year-olds could receive 15 hours of free childcare per week.

Mr Quince said that he heard the sector’s concerns around whether the ratio increase would fuel a recruitment crisis, and said: “That’s exactly why I’m not just pressing ahead with this; we have a consultation which will go ahead over the summer and I’ll listen very carefully to both the sector and indeed parents as to what they want to do.”