Labour would increase bank levy to fund free childcare


Ed Balls: "We will increase for working families free childcare for three and four-year-olds"

Working parents of three and four-year-olds in England would get 25 hours of free childcare a week if Labour wins the next general election.

Shadow chancellor Ed Balls plans to raise the banking levy by £800m a year to fund the move.

Three and four-year-olds currently receive 15 hours of free care a week, but Mr Balls wants to increase this.

Meanwhile, he has asked the government's spending watchdog to review his party's economic plans.

Money would be provided for Wales, Scotland and Northern Ireland, but it would be up to the governments there to decide whether to spend it in the same way as England.

Extra 10 hours

The extra 10 hours of free childcare proposed by Mr Balls would be made available to households where all parents are in work - whether single parents or couples.

At the Labour Party conference the shadow chancellor claimed families had lost £1,500 a year in childcare support under the current government.

In other Labour conference developments:

Ahead of his speech to the party faithful Mr Balls told the BBC the policy would be "a huge change and really welcome for families getting out to work".


Call them what you like. The squeezed middle. The strivers. The politicians have a tricky task. They haven't made them better off. But they desperately want their votes.

These are the people who will decide the next election. And if the parties can't appeal to these increasingly sceptical section of the electorate direct - then they will try to appeal to them through their children.

So, last week, the Lib Dems tried to prove there is such a thing as a free lunch - school meals for infant school kids irrespective of their parents' income. Every little helps.

The Conservatives, too, tried to force down the cost of childcare by changing the adult/child ratio in nurseries - that is until their coalition partners stopped it.

Now Labour has entered the fray by pledging to increase free child care for working parents of three and four-year-olds. Note - working parents.

All the parties have to convince the "strivers" that they are not soft on welfare and that they will spend wisely. Hard pressed parents will also want reassurance that policy pledges aren't just for the conference season but are for real.

Hence Labour's offer to have all its tax and spending plans independently audited.

It's a measure of how far trust in politics has fallen amongst floating voters that it's been felt necessary to suggest this. So the next election won't simply be fought on the doorsteps - or in TV studios - but in the nurseries and school rooms too.

"That's a clear and costed commitment showing that even in tough times, when there's going to be less money around, we will make a difference," he added.

He said that "for the first time" parents would be able to work part-time "without having to worry about the cost of childcare".

"Childcare is a vital part of our economic infrastructure that, alongside family support and flexible working, should give parents the choice to stay at home with their children when they are very small and to balance work and family as they grow older.

"But for many families, high childcare costs mean that it doesn't even add up to go to work. So to make work pay for families, we must act."

Bank levy

In his speech in Brighton Mr Balls also claimed the government's banking levy had raised £1.6bn less than expected.

He said: "At a time when resources are tight and families are under pressure, that cannot be right. So I can announce today the next Labour government will increase the bank levy rate to raise an extra £800m a year."

In June 2010, Chancellor George Osborne announced that banks operating in the UK would be subject to a levy - an annual tax on their balance sheets - in a joint move between the UK, France and Germany.

The idea was to raise more than £8bn for the Treasury over four years, and Mr Osborne it was "fair and right" that banks should contribute to the economic recovery given that the financial crisis began in banking.

Labour's policy pledge comes shortly after the government announced that all pupils at infant schools in England will get free school lunches from next September.

Economic 'stunt'

Labour has already promised all parents of primary school children will be able to get "wraparound" childcare - meaning children can be left at school from 8am to 6pm - if it wins the 2015 election.

On Saturday, Ed Miliband said he would "legislate for a primary school guarantee that every school is an 8am to 6pm school", although party officials said schools could band together to offer the opening hours between them.

They said the scheme would be paid for from existing schools budgets, which Labour said had already been raised for the purpose by the last government.

Speaking on BBC Radio 4's Today programme, Mr Balls reiterated his pledge not to increase borrowing to fund day-to-day government spending.

But asked about so-called capital spending - on building and infrastructure projects - he said: "We won't make that decision until we see where we are on the economy in a year and a half's time."

In a separate move, Mr Balls said on Sunday that he had written to the Office for Budget Responsibility to ask it to review his pledges for the economy - although it would have to have its remit changed to be able to do so.

Andrew Tyrie, Conservative chairman of the Treasury Select Committee, said such a review could "improve the quality of public debate" but Treasury minister Sajid Javid called Labour's request a "stunt".


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  • rate this

    Comment number 21.

    Spending other people's money again.

    Banks will just raise charges to cover this.

  • rate this

    Comment number 20.

    Sounds like a "Back to the Future" sequel....or Brighton Rock.

  • rate this

    Comment number 19.

    How about a revolutionary change to a system whereby people man up, get a job and take responsiblity for themselves and their families? I do. I'm no rocket scientist but with a sense of responsibility and a bit of hard work, you'd be surprised what you can achieve. 25 hours free - great, but I'd prefer to pay my own way and others to do the same.

  • rate this

    Comment number 18.

    Typical Labour, spouting about this that and the other but never really saying where the money is going to come from to pay for everything, oh yes I forgot we put the country in even more debt that's the solution, even if people are against the Conservative party, can you really see Ed Miliband as the next PM............I'm sticking with UKIP

  • rate this

    Comment number 17.

    I am sure the small print says it will be means tested, not combined with other special offers and not available on weekdays.

  • rate this

    Comment number 16.

    that's really great news!
    oh wait a minute - what about me?! I live in Wales and we won't get ANY benefit from that what so ever but what us pay for it!
    I have to give up work as we can't afford to pay for childcare and you are getting it free?!
    ridiculously unfair!

  • rate this

    Comment number 15.

    More pre-election pandering by Labour.

    The government of this country is stoney broke. Whilst the idea is good, how on earth would they pay for this? Ummmm, increase taxes?

    I'm struggling to support my own family, let alone subsidise everyone elses!

  • rate this

    Comment number 14.

    Labour are moving toward if you have any money then it will be taxed to fund their socialist ideology.
    People with savings will be hit again.
    If you have retired then savings is the only irreplaceable security you will have for the future.

  • rate this

    Comment number 13.

    Good old Ed Milliband - comes up with some great ideas - what about nobody has to work ever - everyone on benefits - free holidays, sports cars and big houses - somebody has to pay presumably but hey, what the heck, lets just promise everything....the electorate are stupid - they will go for it. Ridiculous....

  • rate this

    Comment number 12.

    No 3 well said.

    I think the Tories are doing a thankless task, reducing the deficit by having to make unpopular decisions. People seem to forget that labour would have to apply the same cuts or more likely great tax rises ie national insurance( which is supposed to be for the NHS and pensions).

  • rate this

    Comment number 11.

    Eh balls, where shall i leave my wallet....

  • rate this

    Comment number 10.

    I don`t know about a conference, its more a procession of the very same people who were members of a govt which made a total mess of the economy , allowed immigration to run free and got us bogged down for years fighting in wars which were none of our concern promising to get it right next time.

  • rate this

    Comment number 9.

    does this mean that MPs are going to look after our kids?

  • rate this

    Comment number 8.

    Pre-election promises never bear any resemblance to what actually happens after the election.

    Take it all with a pinch of salt. Politicians are liars.

  • rate this

    Comment number 7.

    And on the other hand, watch council tax bills rocket!

  • rate this

    Comment number 6.

    Frankly, I am fed up to the back teeth with having to pay through my taxes for all these people and their kids. If you can't afford to support them don't have them and don't expect the tax payer to subsidise them.

  • rate this

    Comment number 5.

    Not a bad idea .... but. There is no such thing as a free lunch, someone has to pick up the tab. In this case, bank tax revenue may not be enough to cover the cost so it will become another drain on payroll tax.

  • rate this

    Comment number 4.

    It is all very well for labour to tell us yet again how they are going to spend cash.

    How about, for once, letting us know how they're going to save some and I might be interested.

  • rate this

    Comment number 3.

    I'm sure this is just one of a long list of things they'll promise, no doubt all to be paid for by taxing bankers and the 'rich'. No extra borrowing,of course, because they're responsible now. Just as they're also promising to manage migration. i.e. all the things they didn't do in the last 13 years they were in.

  • rate this

    Comment number 2.

    Can the government stop saying people will get 'free' anything. Its taxpayer funded. same as teax payer funded school meals announced.

    There should be no such thing as a universal benefit for all, everything should be based on need. I cant afford to help pay for everyones kids to have free this that and the other, especially when their own parents could be millionaires


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