“Families where two parents work are far more deserving of State support for the care of their children than families where one parent cares for their children at home.”
The message from the government is loud and clear. ‘We do not value the unpaid care carried out at home. It brings no revenue to the Treasury, it can not be accounted for as ‘growth’ on our books.
We wish to boost third party care, which can be seen as an engine for growth, regardless of whether this costs the taxpayer more to support than a parent at home doing the same job for ‘love’ and not ‘money’.’
But what about the needs of our very young children, or the sustainment of family life? The childcare allowance does not help family life at all. It’s just paying families to pay another to look after their children.
How taxes are applied and where the burden of taxation falls has a huge impact on our lives, encouraging certain types of behaviour and discouraging others. It is therefore an important statement about where our values as a nation lie.
Since 1990 the emphasis of our taxation system has been on the individual and the family unit is not recognised. The UK is unique amongst developed nations in not doing so. It has resulted in families bearing a much greater share of the income tax burden while the tax burden on single people and couples with no children has considerably eased.
The Coalition government has been a far from neutral player in the changes that have disadvantaged single earner families (where one parent financially supports the family whilst the other stays at home to care for the children) and forced mothers into the workforce.
Families with two working parents benefit from two personal allowances, a higher household threshold before they pay the 40% higher tax rate, a significantly higher household income threshold before child benefit is removed (£120k instead of £60k) and now a tax allowance of £2,000 per child per year towards costs of childcare.
In contrast, single-earner families have become the least well off at all levels of the income distribution. According to the Joseph Rowntree Foundation they are the biggest group living in poverty.
Instead of questioning why this should be, the reaction across the political spectrum has been to clamour for more affordable good quality childcare to ‘enable mothers into the workforce’ to make up the income the father is unable to do on his own, not through his own fault.
Because for every pound he earns he is hit with higher tax, loss of tax credits and/or benefits, and should he reach £60k loss of child benefit and no allowance of tax relief for childcare.
In practice it means for a family with 3 children on £12k for every pound earned he loses 73p and for a family with three children on £60k he also loses 67p for every pound earned. It makes a mockery of the fury on the 50p rate tax rate!
But the family already has ‘good quality childcare’ in the form of a mother/father who is in most cases best suited to meeting the needs of the child and this could be ‘affordable’ if it were only supported in the tax system.
Staying at home is a choice mothers want. By the government’s own statistics 71% of parents at home were there by choice while only 13% parents cited cost as a problem.
In addition to this 37% of working mothers said they would prefer to stay at home and look after their children if they could afford it, while 57% said they would like to work fewer hours and spend more time looking after the children if they could afford it.
Yet no political party is prepared to stand up for this choice. It is time to re-evaluate what we value and put the needs of families and children back at the heart of our policy and taxation!