Labour has ruled out offering universal free childcare for children over nine months old but is considering a means-tested offer, sources have told the Guardian, as the party strives to prove its fiscal credibility.
Bridget Phillipson, the shadow education secretary, told the Sunday Times earlier this year that Labour would guarantee childcare from the end of parental leave until the end of primary school, saying her reforms would resemble the “birth of the NHS”.
But shadow ministers are exploring options that backbenchers warn will fall short of that ambition. Instead of offering free or very cheap childcare to every family with a child over nine months old, Labour is looking at giving more support for poorer families, while tapering it off for those on higher incomes.
Labour officials are working on their plans even as the party’s leadership tries to reduce spending commitments in an attempt to ward off attacks about the party’s tax and spend policies.
A Labour spokesperson said: “An expansion of childcare to all children is not Labour’s policy. Last year Labour announced that as part of its plans to modernise childcare that we will deliver free breakfast clubs for all primary school pupils in England, paid for by closing the non-dom tax loophole, and allowing councils to offer more childcare provision where they are able to do so.
“Everything in our manifesto will be fully costed, fully funded, and subject to our fiscal rules.”
The UK has one of the most expensive childcare systems in the world, with some parents spending as much as 80% of their take-home pay on care for young children.
But while the Conservative government plans to expand the current offer of 30 hours’ worth of free childcare a week so that parents can claim it before their children turn three, Labour has vowed to replace the system entirely, saying it does not pay enough to providers to offer the necessary places.
Labour officials are now fleshing out the details of that policy, with sources saying they are looking at a range of options to extend support to as many families as possible without breaking the party’s pledge to ensure government debt is falling by the end of the parliament.
Party sources say they are keen to eliminate the gap that exists between the end of parental leave and when a child turns three and qualifies for the free-hours programme. One of the most effective ways to do this would be to increase means-testing, they say.
At the moment most working families where both parents have an expected annual income of below £100,000 qualify for the full 30 hours of free childcare in England. Labour officials are looking at whether that could be adjusted so that some families below that threshold do not get the full allocation, as a way to pay for more support to families with younger children.
Another option would be to give schools money to offer subsidised, but not free, childcare places. Estonia, for example, offers guaranteed kindergarten places from the age of 18 months at heavily subsidised rates, with fees in some settings equivalent to about £50 a month.
While Labour officials say they never promised universal childcare from nine months onwards, some backbenchers are concerned the eventual proposals will not live up to Phillipson’s rhetoric.
One Labour MP said they were concerned the childcare policy had become an “easy target” for the party as it tried to demonstrate its fiscal responsibility.
Last week Rachel Reeves, the shadow chancellor, wrote to shadow ministers warning them not to make any unfunded policy announcements. And on Friday, she announced the party would not meet its flagship promise to spend £28bn on green energy schemes until several years into the next parliament, drastically cutting the scope and cost of the plans.
Reeves has also told shadow ministers that the Green Prosperity Fund would be the only pot of money available for new capital projects, sparking a flurry of lobbying as senior figures in the party push to earmark money for a range of projects, from schools to housing.
