Families hit with £15 billion worth of cuts to support; call to restore tax credits and expand nursery provision - Twigg & Cooper

16 March 2013

Stephen Twigg

Families hit with £15 billion worth of cuts to support; call to restore tax credits and expand nursery provision

New figures released by Labour today show that families with children will have been hit with a cut of £15 billion to support over the course of this Parliament & up to £7 billion a year by 2015. This includes cuts to tax credits affecting families with children, child benefit, and other benefits for families with children.

At PMQs on Wednesday David Cameron claimed he had found the money for a ‘every major step forward’ on childcare1, but people won’t forget the huge leaps backwards he’s already taken in the last two years, making things harder for parents.

Labour is calling on the Prime Minister to make good on his pledge to help with childcare, if they finally want to make good some of the damage they've done, in the current economic climate they should start by providing immediate help to low and middle income parents with child care and family costs - for instance by reversing the cuts in child care tax credit and extending free nursery hours for three and four year olds.

Stephen Twigg MP, Labour’s Shadow Education Secretary and Chair of Labour’s Childcare Commission, said:

“David Cameron’s Government will have cost parents £15 billion in support by the next election. Families are being hit in the pocket, and they are seeing their local children’s centres closing down. Mums need real help now, but the only people who will benefit are the millionaires who are getting a tax cut. Parents need to be supported so they can get back into work and get our economy growing again.”

Yvette Cooper

Yvette Cooper MP, Labour’s Shadow Home Secretary and Minister for Equalities, said:

“Some parents have already lost up to £1500 in child care support on top of the wider cuts to family budgets. Families with new borns are losing £1700. This Budget needs to help mums not millionaires.

“David Cameron has promised ‘a major step forward’ on child care, but families have already been forced to take several major steps back. If they finally want to make good some of the damage they've done, in the current economic climate they should start by providing immediate help to low and middle income parents with child care and family costs - such as reversing the cuts in child care tax credit. For the future they should also be looking at the most cost effective way to expand child care provision - for example through more free nursery hours.”

The Government has hit families with £15 billion worth of cuts, and failed to tackle rising costs. This includes:

•         The Government has cut childcare support to families. The Government cut childcare tax credits in 2011, meaning the average award has fallen £570 a year - with some families losing up to £1,560 a year.

•         Under David Cameron, childcare costs are eating further and further into household incomes. Daycare Trust figures suggest average nursery costs (for age 2 & over) have risen by 7% over the last year alone, while average hourly earnings have fallen.

•         David Cameron is hitting women who want to work. According to Aviva, between October 2010 and October 2011, 32,000 more women were put off going back to work due to the rise in childcare costs.

•         David Cameron said he’d protect Sure Start, but he’s cut it. The Government have cut the Sure Start budget by a third - there are now 401 fewer centres compared to May 2010, with many of those remaining cutting back on daycare provision.

•         Now the Government’s plans threaten the quality and safety of care. Their answer to soaring costs is to say nursery staff should have to look after more children - even though the Government’s own advisers say it won’t reduce costs, and threatens the quality and safety of care.

Labour’s own work on our future childcare proposals is ongoing, but if the Government has found additional funding, to start putting right the damage they have done to childcare support in this country, the priority should be reversing their cut to the childcare tax credit, which has seen some families lose up to £1,560 a year in help with childcare costs and increasing the childcare support for 3 & 4 year olds to 20 hours a week.