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 61.

    Roll up! Roll up!
    Vote for me and I will guarantee a free (paid by the taxpayer that is) ride on Virgin Galactic!
    We all know its complete balls in more than one sense of the word.
    So why don't they all shut up and give us a bit of credit for intelligence?
    We all know it's never going to happen because once in it will be.
    "Sorry but we did not realise at the time what a mess everything was in."

  • rate this

    Comment number 60.

    39. Quo Vadis
    I honestly don't know why the BBC is asking for opinions when the great British public generally haven't got a clue what they're talking about.

    British Politicians don't seem to know what they are talking about, either.

  • rate this

    Comment number 59.

    Please act like Labour should and explain how you're paying for this by getting some of the ridiculously rich to start contributing, else nobody will believe you.

    I know for a fact that as a country we are rich enough to provide a decent standard of living for everyone, it'd just take a bit less greed and selfishness.

  • rate this

    Comment number 58.

    Messrs Milliband and Balls need to understand some very basic economics: 1) Nothing is free-everything has a cost. 2) Governments only have two sources of money - tax from me, and borrowing-which is repaid by taxing me.
    It is not my place to subsidise other people's breeding-especially since the biggest growth area for this is immigrants-that I wasn't asked if I wanted in the first place!

  • rate this

    Comment number 57.

    This is gross stupidity! Apart from the fact that Balls lives up to his name (as usual) why should yet more money be thrown at parents for free child care. If you want to have children, fine - but pay for them yourselves and don't expect the taxpayer to do so.
    On a similar note, I would limit child allowance to 2 children. End of.

  • rate this

    Comment number 56.

    Put children in school from 8am to 6pm??!! How lovely for them. When do they get to spend any time with their patents being nurtured and loved?

  • rate this

    Comment number 55.

    I am sick to the high teeth of paying for things for other peoples kids that the parents should be paying themselves"

    Will you be refunding in full and with interest, the state funded services your parents enjoyed (or were entitled to) in your upbringing: education, healthcare, child benefit etc?

  • rate this

    Comment number 54.

    Here we go again

    Why do the Socialists always expect one group to pay for the choices made by another. If you want children then, like my husband and I, appreciate that it will involve lifestyle changes and, yes, some sacrifices.

    Labour seem hell bent on creating a generation who expect to be nannied from cradle to grave. Will they never learn we live in a competitive world and not fantasy land

  • rate this

    Comment number 53.

    BBC: To call this proposal 'free' is just reporting Labour's spin.

    To increase the bank levy will just result in lower dividends and therefore lower pensions for everyone. This isn't free childcare, it's just a reallocation.

  • rate this

    Comment number 52.

    @40 so don’t help the people that’s keeping the country going then? Instead give OAP's above inflation rises in pension and winter fuel allowance. Open your eyes we need people to get back in the work force and this will help. What about the OAP's that are 'irresponsible' not saving for their future properly and relaying on government hand outs. Pot and kettle

  • rate this

    Comment number 51.

    "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"

    Why bother with that?
    He's only got to look to the economics experts on HYS for a review of his pledges

  • Comment number 50.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 49.

    Time for the Tory trolls to get mobilised. Ohm they already are....

  • rate this

    Comment number 48.

    It appears Ed has managed to cock up something that should've been well recieved.

    The days of public ignorance of politics are gone; we aren't so easily fooled anymore. The mire the last Labour government landed us in has pricked up public ears to Labour's MO: spend until there's no more to spend, making Tories unpopular as they have to cut deep to fix it.

    We're not so naive anymore, Ed.

  • rate this

    Comment number 47.

    So, the Conservative party line is that "increasing the quality of public debate" is a "stunt".

    Tells you everything you need to know about their commitment to open democracy. Roll on 2015.

  • rate this

    Comment number 46.

    Balls and miliband's fiscal policy:-

    Spend now

    Worry later

  • rate this

    Comment number 45.

    This is a good idea in principle but needs to be focused on those families that actually need free childcare for working to be economically viable.As it stands there is often no incentive for both parents to work as childcare costs can easily exceed the often pathetic salaries we are supposed to live on.

  • rate this

    Comment number 44.

    I am sick to the high teeth of paying for things for other peoples kids that the parents should be paying themselves

  • rate this

    Comment number 43.

    Dangling goodies to tempt us to vote does not work. We have been let down by political parties before and we have no faith in any of them
    In fact, it just makes them look desperate.
    I see Alex Salmond is offering to pay for universal early retirement if he gets his independence vote.
    Look, politicians of all parties , it is our money you are proposing to spend!

  • rate this

    Comment number 42.

    Labour would increase bank levy to fund free childcare

    And the banks will charge its customers to cover this cost, whichever way you look at this, the cost comes back to the taxpayer, thats you and me.... personally i would rather keep some of the money i have spent all week earning... Come on Balls (up) lets have some practical cost affective policies, not this gibberish.


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