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 1421.

    Usual easy answers and giveaways when in opposition why would we let Balls get his hands on the countries checkbook again

  • rate this

    Comment number 1420.

    I agree that we should all pull together as a society BUT why does the nanny state feel the need to throw cash at couples to have kids and then more money to bring them up. Sorry, bring up your own kids and for the millions like me who have none of the little perishers, send me an allowance for being single and grumpy! Dishing my money out to lazy breeders isn't the best use of tax payers' money.

  • rate this

    Comment number 1419.

    I am afraid your statistics are incorrect. You are only referring to
    income tax and that usually only makes up around 25% of the tax revenue to the Treasury.

    Please provide a link for your statistics.

  • rate this

    Comment number 1418.

    A promise of free childcare? Paid for how exactly?

    Compared to the Coalition's (well the Lib Dems really) already delivered cuts in tax for everyone by increasing tax thresholds, this just isn't enough to keep me voting Labour. Sorry, but the Lib Dems have done what Labour had 13 years to do and didn't.

  • rate this

    Comment number 1417.

    6 captainswing1 +228
    Also the demographics are bad enough without less children!
    Yes some will not contribute,but the lions share will,if you simply based having children on affordability many very responsible hard working couples could never contemplate having their own,if that's your position think through the short term costs to the state against the longer term gains & social mix!

  • rate this

    Comment number 1416.

    So this is the great Labour strategy for getting my vote and something that will turn the economy around - up the levy on Childcare. Fan-bloody-tastic. A sure winner.

  • rate this

    Comment number 1415.

    So where do you expect the new houses to be built then? more in the overcrowded south of England I suppose ......

    that's why we need HS2 to update the UK Infrastructure rail system that has been neglected for the past 30 years or so.

    Spread the wealth around !!


  • rate this

    Comment number 1414.

    How many people would rather stay at home and bring up their own children rather than fob them off in someone else.

    The real problem is high cost of living and low wages meaning both parents have to work, they'll sell this as pro choice but its only pro-choosing to work.

    Treat the problem Ed not the symptom.

    Oh and good idea to finance it from the banking levy - so that's like free money is it?

  • rate this

    Comment number 1413.

    #1382: "The top 10% contribute 57% to the treasury. That is a ONS fact. The top 50% contribute 89% to the treasury."

    There's not much evidence that simple, verifiable facts like these have much impact on the prejudices of the left, is there? Labour & its supporters much prefer the "money grows on trees" approach where "the rich" can provide infinite funds for their social engineering schemes.

  • rate this

    Comment number 1412.

    Tax & Spend; Tax & Spend.

    This is a party making policy to buy votes... nothing more.

  • rate this

    Comment number 1411.

    #1400 - Bubblehead

    "Take from those who work and give to those that won't should be your mantra Mr Balls(up)"

    Which word out of 'working parents' is causing you problems?

    Maybe 'take from those who don't know what they're talking about' would be a more effective mantra?

  • rate this

    Comment number 1410.

    My parents worked all hours, in all kind of jobs - never claimed a penny.

    They made sure they could afford to feed me, clothe me and provide me with a roof before they had me.

    It's a shame today's young parents can't do the same. That they're only way to get the extra penny is to have the children first, then claim.

  • rate this

    Comment number 1409.

    If you're not going to put psychopaths and sociopaths in jail, by all means: tax them heavily for destroying the lives of the remaining 99%.
    But the rest of it seems a bit like: I'll see your "free school lunches", and raise you "free child care".

  • rate this

    Comment number 1408.

    Sad to say it is all (Ed) Balls!!
    After the mess he contributed to, can you believe a word he says?

    No, thought not

  • rate this

    Comment number 1407.

    1396 Aly
    I hope Labour carry on helping the low paid employed as well as the parents.The low paid have been hit the hardest by the conservatives
    Although it was the last labour government that canned the 10p tax rate and made the poorest pay 20%"

    And now they pay 0%. Labour have nothing to do with helping low paid people. Its highly paid people who are directly helping them by paying their taxes.

  • rate this

    Comment number 1406.

    1382. OllyinLondon
    The top 50% contribute 89% to the treasury. No one is stealing from the poor. Those who earn the most subsidise the poor.

    And where do you think this money that they "earn" comes from? Do you think, for example, that the millionaire founders of made those millions by altruism?

  • rate this

    Comment number 1405.

    The rich needs the poor to keep having children. Otherwise who will make them their money? Who will they have left to look down on? When the factory floors are empty are the boardroom members going to get their hands dirty? Not a chance. Most of them wouldn't have a clue how to do even the most basic jobs in their own company.

  • rate this

    Comment number 1404.

    As someone pointed out only children of working parents are eligible, so using the current 7.7% unemployment (not accounting for the fact many children do in fact still have 2 parents and only one need be eligible) that suggests £1.15 per child per hour rather than £1.06 it will actually be between the two. So still doesn't add up.

  • rate this

    Comment number 1403.


    "It has nothing to do with being inhumane - it is about the fact that a lot of people who receive nothing"

    So the NHS, Education, Police/Fire service, Road/Railway network, Armed Forces, Libraries, Post Offices, Museums etc etc are according to the right whinge "nothing".


  • rate this

    Comment number 1402.

    Nick says Ed has something big up his sleeve for his next speech. I hope its another apprentice scheme - like the labour team run a whelk stall for Lord Sugar, but loose a fortune and get fired. They did that one in the last series but there was a lot of back stabbing, anyway I think they should have another go, it would still be good experience. They don't have much else on the CV poor dears.


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