Kemi Badenoch is set to promise the abolition of the controversial childcare “cliff edge”, a policy that can leave some working parents tens of thousands of pounds financially worse off.
Speaking on the first day of the Conservative Party conference in Birmingham, she will pledge that a Conservative government would end the loss of free childcare support when either parent’s income rises above £100,000.
The Conservatives have described the existing arrangements as “absurd” and promised a new system that is “both pro-family and pro-growth”. They said the change would represent a “first step” towards broader tax reform.
Under the current rules, families can lose eligibility for as many as 30 hours of government-funded childcare each week if one parent earns more than £100,000.
As a result, some parents may be financially better off remaining on a salary of £99,999 and turning down pay rises worth tens of thousands of pounds to retain their childcare support.
The Conservative pledge follows a warning from the Centre for the Analysis of Taxation that, by 2030, the average parent who crosses the threshold would need to earn £124,000 to offset the loss of free childcare.
Citing Institute for Fiscal Studies figures, the party said a parent with two children in nursery in London would need an income of almost £150,000 to be better off than someone earning just below the £100,000 limit.
The Conservatives argued that the rules effectively penalise parents for increasing their hours, pursuing promotion, working harder or accepting a better-paid role.
Kemi Badenoch is expected to promise an end to the childcare “cliff edge”, which can leave some working parents tens of thousands of pounds worse off
The party also said the system made it harder for couples to balance careers and family life, potentially encouraging some people to postpone having children or decide not to become parents.
Removing the threshold, the Conservatives said, would ease pressure on thousands of taxpaying working parents while strengthening economic growth by improving the incentives to work and increase productivity.
It would also address what the party called the unfairness of a system based on an individual parent’s income rather than the financial circumstances of the household as a whole.
The Conservative proposal comes after Chancellor John Healey faced calls to overhaul the childcare arrangements.
Shadow Education Secretary Laura Trott said: “The childcare cliff edge creates problems for families, workplaces and nurseries – it leads to promotions being rejected, working hours being cut and endless paperwork.
“That is why the Conservatives would remove the £100,000 childcare cliff edge for both free childcare hours and Tax-Free Childcare, giving parents the freedom to decide how to balance work and childcare according to what suits their family.”
She added: “We want working families to have children. There is a real contrast between us and Labour here.
“We want to cut childcare costs for working parents who are trying to do the right thing, while Labour has simply abolished the two-child benefit cap. It is a clear statement of values.”
Shadow Chancellor Andrew Griffith said: “Ending this childcare cliff edge is the first step in our plan to deliver lower, simpler and fairer taxes across the board.
“Britain needs a tax system that creates the right incentives by supporting people who work hard, invest and build businesses here.
“Working parents should not be penalised simply because they are trying to combine a successful career with raising a family.”
The Conservatives said scrapping the childcare cliff edge would cost more than £700million, but claimed that would be covered by reversing the increase since 2016 in the number of people working for ‘executive non-departmental public bodies’ such as the Arts Council.
Brexit bigwigs want migrant referendum vote push for migrant cap drive
Arron Banks (left) was pictured alongside Donald Trump and Nigel Farage in the days after the Republican’s 2016 presidential election win
The so-called ‘bad boys of Brexit’ are reuniting to campaign for a national referendum on restricting immigration.
Arron Banks and Andy Wigmore – who ran the Leave.eu movement and were key allies of Nigel Farage – plan to bring the organisation back to raise support for a national vote on enforcing a hard cap of 50,000 net migrants a year.
Mr Banks, who gave £8million to leave.eu, said it would match Marine Le Pen’s committment to a French referendum on immigration if she wins power. His donors include Malcolm Robinson, a Manchester-based businessman who has donated substantial amounts to Reform UK.
Mr Banks was even pictured alongside Mr Farage and Donald Trump in the days after the Republican’s 2016 presidential election win.
