Childcare and women’s employment rates

by Liam Byrne | 16.07.13 | in: Communities, Families and children, Welfare reform, Work and Pensions

Speech to the Resolution Foundation, 1st July 2013

James, thanks very much for the opportunity to speak to the Resolution Foundation today – and congratulations on becoming Think Tank of the Year.

Your work tackling the challenge of the squeezed middle and how we raise living standards for millions in our country is amongst the most important in British politics today.

And you’re pursuing the argument with the forensic rigour that marked out so much of your work in government.

The battle lines in politics are now becoming clearer and clearer.

A couple of weeks ago, Ed Miliband and Ed Balls set out a distinctive Labour approach to governing in 2015.

An approach that is at once realistic about money and radical about power.

And last week we heard the government’s spending review.

Rather more politics than economics I’m afraid.

No plan to get Britain back to growth, nothing to get back to work the million young people locked out of work, and nothing for hardworking communities.

Just petty politics and more of the same.

Just another rather crude attempt to carve out yet another dividing line in the tortured politics of welfare reform.

Every effort possible not to sow harmony but to provoke dissent.

Divide and rule. Not one nation.

And then we saw the figures for the Work Programme.

An abject failure for nine out of ten people on the programme.

If this government spent as much time on managing delivery as they did on arguing about Europe, the country might be in better shape.

So what we’re determined to do is set out a distinctive Labour argument for reform of social security.

To put the system back on an even keel for the long term.

Reform that is both fiscally judicious and socially just.

As Ed Miliband said that means a new approach to getting people back to work; making sure people are better off in work and third putting the something for something back into the system. Restoring the contributory principle that was so important to Beveridge’s appeal in 1942.

It’s my personal mission to deliver this big long term reform because I see it as vital to rebuilding the social solidarity on which social security in a democracy must rest.

In a modern democracy like ours, if people don’t think the system delivers for them, they will vote for people who will change the system.

And that’s why we in the Labour party must not be defenders of the status quo.

We must be the reformers. And right now, it is us who are the reformers.

Last week I argued that our work to restore the contributory principle should start with the over 50s – the people who have paid in the most and cared the most.

The people for who there is almost no extra support to help them return to work despite the fact they are grappling with the highest level of long term unemployment of any age group.

There is however one more group of citizens who struggle to work – and struggle to be better off in work.

They are people who also pay in – and yet don’t back get back out what they need to help them work.

They are Britain’s working mothers.

I’m really glad that here at the Resolution Foundation you’ve led the argument for more childcare because you know just how important it is to raising living standards.

Your argument matches my experience.

A few weeks ago, I organised the first ever mums’ jobs fair in my constituency.
We had our Jobcentre team, training providers and lots of help and advice from colleges, the great team from Mumprenuers, and people who could help with starting a business.

I spent the morning talking to mums about what they felt they needed to get back into work.

In my community, mums want to work.

Just like families everywhere, our families are really feeling the pinch right now – and lots of mums are looking to get into work to help top up the family income, especially now tax credits have been cut back so savagely and because bills are spiralling up and up.

Yet, our story is a national story.

In fact, a couple of weeks ago the Women’s Business Council published brilliant report which estimated 2.4 million more women want to work, and 1.3 million women want to boost their hours.

The second big message our mums had for me, was that we need an awful lot more skills training. Lots wanted ambitious programmes, – and lots were struggling to find basic ESOL provision.

But, most important of all, the parents I serve told me they need more childcare.

And lots of mums said to me that they simply couldn’t find it, especially for one year olds or two year olds.

People had heard about the new entitlement to free places for two year olds – but it was very hard to find anywhere planning to offer it locally.

And, because free provision was available for only 15 hours – and often only available in bite-size chunks in the morning or the afternoon, it was really hard to find work to fit around it.

In a community like mine, we simply can’t tackle the great challenges that we came into politics to solve, unless we make the right to work a reality for parents.

What I’ve found missing from the government’s argument is any assessment of just what are the priorities for expanding childcare, if our goal was to free mothers to work, and raise the employment rate for women.

Since my mum went back to work after having me in the 1970s, the employment rate for women has been transformed.

Female employment has risen by over 50 per cent since 1971 – 4.5 million more women work than when my mum had me – and went back out to work.

Crucial to this was the investment we made in early years during our time in office.

We introduced free early years education to all four year olds in 1998, and extended that to three year olds in 2004. We introduced Sure Start centres, which the Children, Schools and Families Committee called ‘the most innovative and ambitious Government initiatives of the past two decades.’

But now, women have been bearing the brunt of unemployment.

Women’s unemployment increased by 120,000 since the election, while men’s unemployment has fallen by over 100,000. And women account for more than three-quarters of the rise in long-term unemployment since 2010.

When Yvette Cooper came to Birmingham recently to speak to a women’s policy event, she made a powerful speech. She talked about the risks for her daughters – and mine – that the progress of her grand-mother and mother’s generation either stalls or retreats.

As Yvette Cooper says: for many women today, it feels like the clock is being turned back.

So, in a world of limited money we need to debate our priorities.

And so I want to share with you research that I am publishing today.

Across every child’s age range, we have higher employment rates for women that the OECD average.

Except one.

For mums with children aged three to five, our employment rate is much lower than the OECD average – and far lower than the best countries like Denmark, Sweden, Iceland, Estonia and Slovenia.

What’s more for women with children of this age, who do go to work, twice as many are in part-time work as the OECD average.

Now at the moment, three and four year olds are obviously entitled to 15 hours of childcare. That’s a good start.

But here’s the problem.

The average part-time job in Britain is 15.4 hours a week.

Throw in average journey time of 42 minutes there and back and you need at least 17.5 hours of childcare to tie down a part-time job as a mum in Britain.

The best countries have of course gone much further:

In Denmark, kindergarten is available full-time for young children, the majority of which are by municipalities. And the charges are transparent and simple: parents can’t be charged more than 25 per cent of the cost of childcare.

In Sweden too, there is a clear cap on costs, with parents not paying more than three per cent of their income on childcare. Municipal governments are responsible for offering places, normally within three to four months of a parent’s application.

But what’s fascinating is the new international evidence that now shows that raising mums’ employment rates can pay for itself.

In Quebec for instance, research shows that investment in childcare more than pays for itself through the impact on mums’ employment rates, GDP and tax revenues.

Reforms in Quebec in the late 1990s introduced a cap on childcare costs.

The result was that about 70,000 more women with young children entered the workforce; and the labour participation rate of women in Quebec overtook that over other Canadian provinces.

Studies have found that for every dollar the Quebec Government invested, the Government recouped .05.

That is success we should look at.

And what would better childcare mean for Britain?

Well, according to the House of Commons library, if we moved our employment rate for mums up to the average of the world’s best five nations, we’d have 320,000 more women in work and – wait for it – another £1.7 billion in tax receipts (and that’s assuming 43 per cent work part-time).

What are the further steps we need to review?

Our system is a long way from perfect and as Stephen Twigg and I argued last year there is much Britain can learn from the better systems enjoyed by our competitors in places like Denmark.

But sadly, the present Government is too consumed with petty squabbles about unpopular and unworkable proposals on ratios to really get to grips with the problem.

So I’ll give them some free advice – Ministers should stop shouting at each other and start listening to parents.

Here’s four things they should be looking at today.

Firstly, finding a place for your child shouldn’t be any more complicated than it needs to be.

Right now, mums in my constituency tell me it’s really hard to find out about vacancies and secure a place in an organised way.

If you want to make a major change like moving into work, that’s a real barrier.

So ministers should look for better ways to organise admissions locally, so there’s a clear and accessible way for parents to get information on the availability of places and to secure a place, without undue hassle.

Second, there has got to be much more transparency on costs.

We should be looking at ways local authorities can do more to publish a price for childcare.

Local authorities already determine a local price, through the funding formula, they should ensure parents can use this as a benchmark when shopping around for extra provision.

Third, it has to be clear to parents not just how much things will cost – but how much they will be on the hook for.

Right now this varies wildly, depending on the family’s income, the age of the child, and the number of children.

A family could receive help for anything from 70 per cent of costs, to nothing at all.

If this isn’t clear it will be impossible for parents to plan their budgets.

Ministers have got to do more to ensure everyone has the information they need at their finger-tips.

Fourth, Government should look to clear away a lot of the barriers that stop nurseries starting or expanding on primary school sites.

At the moment lots of providers are unable to expand because they are not allowed to set rates that will let them expand without negotiating reams and reams of red tape.

When the head of children’s services in Birmingham told me about the hoops a school-based nursery would have to jump through to expand provision at an affordable rate I couldn’t believe it – right through to writing and submitting a business case to the local authority.

There are quite simply an awfully big set of barriers that shouldn’t be there.

Next year is the 70th anniversary of the 1944 White Paper on full employment.

It wouldn’t surprise you to know that there wasn’t much in that old white paper about helping women.

Today, the road to full employment will look very different to 1944.

And so as we set about building a new road to full employment we have to put women’s struggle at the heart of our politics and our priorities.

Let’s not be the generation of politicians that saw the clock turned back for women.

We are determined to be the party that says we’re going forwards not back.

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