Conservatives launch manifesto with pledge on childcare and tax cuts

The Conservatives have published their manifesto with a pledge to create a new £1 billion fund for holiday and breakfast and after school childcare.

In a section on working families, the party puts a big emphasis on tax cuts. It promises not to raise the rates of income tax, National Insurance or VAT and it says it will raise the National Insurance threshold to £9,500 next year with an “ultimate aim” of the first £12,500 earned being free of tax.

There is little mention of Universal Credit and no mention of the five-week delay and sanctions widely viewed as being behind the big rise in people going to food banks, many of them working families with children. The manifesto says “we will continue our efforts through the tax and benefits system to reduce poverty, including child poverty”. The manifesto also praises the Conservatives’ welfare reforms, which it says “have encouraged more people into work”.

A report by the Resolution Foundation which looks at the different parties’ manifesto pledges predicts child poverty is set to continue rising under the Conservative Party’s social security plans and could reach a 60-year high of 34 per cent. It also says that the fact that Labour does not mention reversing the benefits freeze could mean its plans also increase child poverty and that the Lib Dems’ plans will not significantly reduce child poverty.

Other proposals on welfare in the Conservative manifesto include a pledge to help carers in receipt of Universal Credit and to review assessments for those with disabilities.

The manifesto also contains a promise to extend the entitlement to leave for unpaid carers, the majority of whom are women, to one week and to review a pensions loophole which means many with net pay pension schemes who earn between £10,000 and £12,500, most of them women, have missed on pension benefits.

There are pledges on business support, including a £3 billion National Skills Fund, a reduction in business rates, an increase in the Employment Allowance for small businesses, support for start-ups and small businesses via government procurement and an expansion in start-up loans.

On employment rights, the manifesto pledges to create a single enforcement body and crack down on any employer abusing employment law, ensure that workers have the right to request a more predictable contract, encourage flexible working and consult on making it the default unless employers have good reasons not to allow it, legislate to allow parents to take extended leave for neonatal care and “look at ways to make it easier for fathers to take paternity leave”.

Reaction

Paul Johnson of the independent Institute for Fiscal Studies pointed out that the tax cuts would mean less than £2 a week extra for the average worker and that the triple lock on tax, NI and VAT rises would mean no extra long-term funding for public services.

He stated: “If a single Budget had contained all these tax and spending proposals we would have been calling it modest. As a blueprint for five years in government the lack of significant policy action is remarkable.

“In part that is because the chancellor announced some big spending rises back in September. Other than for health and schools, though, that was a one-off increase. Taken at face value today’s manifesto suggests that for most services, in terms of day-to-day spending, that’s it. Health and school spending will continue to rise. Give or take pennies, other public services, and working age benefits, will see the cuts to their day-to-day budgets of the last decade baked in.”

According to the BBC, the money for wraparound childcare will be £250m a year, for at least three years, plus a £250m capital spending boost. Early years childcare providers, who have struggled over the last years due to the underfunding  of the Government’s ‘free’ childcare policy for three and four year olds, gave the announcement a less than enthusiastic welcome.

Neil Leitch, chief executive of the Early Years Alliance, said: “Promises of business as usual like this will mean little to those providers struggling to make ‘free childcare’ work.

“Even as we have seen soaring costs in wages, pension contributions and business rates, early years funding levels have remained stuck at what they were when they were set in 2015. That underfunding has plunged the sector into crisis, creating a huge and growing shortfall of two thirds of a billion pounds and forcing thousands of providers to close.

“Perhaps it was too much to expect a serious conversation about the future of the sector during this election – but that is what is urgently needed. Instead, we’ve had offers of more ‘free’ hours from the other political parties and this loose change from the Conservatives. Providers can’t go on like this: we need funding rates that cover the true cost of delivering childcare and a firm commitment for levels to be reviewed annually.”

Meanwhile, Sophie Walker, Young Women’s Trust Chief Executive, commented on the fact that the money pledged for childcare was half that promised to fix potholes. She said: “Mr Johnson’s pledge to spend twice as much on fixing potholes than on fixing the current childcare crisis is disappointing. You don’t need to be a rocket scientist to work out that proper investment in childcare benefits us all.

“A fully functioning infrastructure of care creates jobs, gives young women increased access to paid work, boosts productivity and economic growth, creates higher tax revenues and cuts welfare payments – all of which also provides more money to fix potholes.”

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