Employers’ national insurance hikes will increase the cost of childcare and put nurseries out of business, making life for working mothers even harder than it already is, says Alys Denby Governments are notoriously bad at picking winners, but Britain is about to find out what happens when leaders are more interested in picking losers. From Darren Jones agreeing that big businesses should “suck up” tax rises to Wes Streeting dismissing independent schools’ “crocodile tears”, Labour has made no secret of the sectors it holds in contempt. But there is one group the government may find harder to accuse of special pleading: working mothers.
It bears repeating (as ministers appear to have forgotten) that Britain has some of the highest childcare costs in the OECD. This entrenches the gender pay gap, curtails women’s choices and suppresses growth by making it simply unaffordable for many parents to work. And Labour’s tax rises are about to make things worse.
Nurseries, which tend to employ part-time staff on the national living wage, are warning that increases to employers’ national insurance and the lower salary threshold will dramatically increase their overheads. The government has committed to subsidise 30 hours a week of childcare for all children under five, however the fees it pays to providers were set before the Budget and therefore don’t account for the increased tax burden. Many nurseries will have to raise fees outside the government-funded hours to c.
