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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Should tax-free childcare and ‘free hours’ be universal?

438 replies

Nursery772 · 29/01/2024 12:03

Having attempted to apply for the new 15 free hours for my nearly two year old, I discovered you are not eligible if you earn over £100k.

My four year old also receives only 15 of the 30 free hours for the same reason.

I am not sure if the additional 15 hours from 9 months / 2 years will be income contingent.

Between this and tax-free childcare, I will lose about £12,000 of post tax income in 2024/5 tax year.

This seems very onerous!

Should tax-free childcare and ‘free hours’ not be universal? It is an expense to allow me to work, and I’m paying quite a bit of tax.

Also being applied as a cliff edge is brutal, seems to create an artificial ‘cap’ on the amount parents of preschoolers can earn.

OP posts:
Oliotya · 01/02/2024 11:28

ThePeaAndThePrincess · 01/02/2024 11:07

I have read the thread.
None of the comments have justified why someone on 100k+ needs what is essentially a state benefit.

It is not a "benefit" unless you consider education and healthcare to be "benefits". The reason for taxes is to provide public services for all citizens that are a) a public good that benefits citizens and the country, and b) are more practical and/ or efficient to provide on a collective basis, either for reasons of practicality/ necessity, reduced costs or risk spreading.

Childcare/ early years education fulfils these criteria. Decades of data from other countries and a significant body of independent research clearly demonstrates that the provisions of heavily subsidised or free universal childcare improves health and educational outcomes for children, reduces child poverty, increases overall tax revenue and more than pays for itself in the long-term, reduces the gender paygap, reduces welfare dependency, reduces lifelong wealth inequality between men and women etc.

Economic data also shows that the lack of provision for higher earners (whom the UK is unusually dependent on for a disproportionate percentage of its tax revenue and productivity) alongside the cliff edges in the tax system that need to be removed, reduces productivity and growth and decreases overall tax revenue therefore reducing the money available for services/ benefits for the poorest. Discouraging your most productivie workers, many in skills shortage areas, from working full time is clearly a bad idea. There is a significant body of independent economic research on this as well as the HMRC data which shows the pattern quite clearly hence the Chancellor commissioning an independent investigation into the impact on productivity, the final report of which states very clearly that this is a key driver of low UK productivity and tax revenue.

Then there is the fact that means-testing public goods like childcare undermines public support for the provision at all because those who are funding it for everyone don't even get to use it. As we have seen the effect of this over time is that fiscal drag is inevitably applied to the threshold and therefore fewer and fewer people are eligible. This is how you effectively abolish a service or benefit by stealth. It has been demonstrated repeatedly every time something has been means tested, see also child benefit. The same will happen to state pensions if the electorate are ever stupid enough to support means-testing them out of spite and envy, thinking the threshold will never apply to them. Means-testing is the first step in abolishing something entirely and normalising the idea that it isn't an essential public good that the state should provide to all citizens.

All of this has been explained in the thread so for you to claim that none of the comments justify why it should be universal is rather bizarre.

If you do have some economic studies or data that somehow refutes the huge evidence base for the above then please share it. Otherwise your opinion on the matter is clearly wilfully ignoring the facts because your resentment of the idea that higher earners should also be allowed to benefit from the services they fund even when them doing so benefits everyone else as well and preventing them doing so costs the country more than it saves, and is therefore not of any value in terms of assessing what the policy should be. You are entitled to hold illogical opinions that contradict all factual evidence, of course, but if you cannot support them with any logic or evidence then there's not much point in pretending you can contribute anything worthwhile to a discussion with others on the topic.

Excellent post!

OrangeMarmaladeOnToast · 01/02/2024 11:38

It really is. It's phenomenally self indulgent to bleat on about need without even considering what we might have to do to actually fund and maintain services. I'm on the left, we ought to be the people shouting loudest about the impact of fiscal drag and how to protect our public services instead of having them undermined.

Araminta1003 · 01/02/2024 11:48

The problem is I no longer have faith in the structure of our “services”. I no longer have faith that the NHS is efficient or properly run, same goes for HMRC and the plethora of overcomplicated rules. I no longer have faith in the education “system”. I do not want Central Government interference in matters they don’t really understand that they then push out of self interest. It royally annoys me. So whilst I agree we have to fund and maintain services I do not trust those in charge to do it properly. It is the system that is the problem - it is all far too centralised and run from afar.

CaribouCarafe · 01/02/2024 12:11

@Araminta1003 I think part of the issue is a lot of policies are brought in for optics rather than from informed studies - I don't believe the level of examination in education is warranted and firmly believe it actually stunts learning and mental development whilst creating massive undue stress to teachers who now are saddled with not only teaching children but a host of pastoral duties too. Of course, some of this is ideological, keep the population sufficiently uneducated to maintain power, but some of it is just through poorly thought knee-jerk policies. Low educational attainment? Let's just create a new qualification! GCSE grade averages getting too high? Let's create a new grade band! Low uptake of A level maths? Let's make it compulsory! 🙄

Similarly, the NHS has swelled to unmanageable levels because of shortcomings in social care, education, and public services and the solution seems to be to throw more money at the managerial levels whilst underfunding nurses and doctors, removing bursaries, removing paid medical places at universities. Again, some is ideological - removing the NHS by stealth, but some of it is pure selfishness and stupidity. Claiming to invest record-breaking levels of money into the NHS without accounting for population growth or inflation is the most common lie. And again with optics. Covid? Let's create new Nightingale hospitals that we don't have staff for! 🙄

The problem with 4-year governments is that there's no reward for enacting long-term policies, and the opposing party rather than working together with the government will do whatever they can to work towards their benefit rather than the benefit of the public.

We need more investment into a range of different services, rather than expecting teachers, doctors and nurses (etc.) to pick up the slack from deeper societal problems.

ThePeaAndThePrincess · 01/02/2024 12:36

@CaribouCarafe I agree absolutely. This is one of the problems with our adversarial, FPTT system of politics because it encourages policy made for political and optical reasons rather than the discussion that has to take place in a coalition. We also swing from one extreme to the other so any useful policies are abandoned before long-term benefits can materialise. What the UK is lacking is evidence-based policy making. The exceptionalism also feeds into this in that evem when there is copious long-term and irrefutable evidence from other countries on the effectiveness (or not) of certain service models/ policies, inexlicably UK politicians choose to ignore this. We do not need to reinvent the wheel. We know which models of healthcare, childcare, education, taxation etc work. UK politicians have chosen not ti adopt these even in the face of that enormous amount of evidence and it is a badly educated electorate largely ignorant of basic economics but also - as can be seen in this thread - unwilling to read or accept evidence that doesn't fit their prejudices, which allows them to continue to do so. It is a sad state of affairs and if this trajectory continues living standards in the UK will continue to decline quite sharply over the next couple of decades.

ThePeaAndThePrincess · 01/02/2024 12:47

Excuse typos! Trying to multi-task and clearly failing. Grin

Pottedpalm · 01/02/2024 19:06

I think @ThePeaAndThePrincess should run the country!

Perhapsanorhertimewouldbebetter · 01/02/2024 19:31

Still not convinced, but you all crack on in your echo chamber.

BIossomtoes · 01/02/2024 21:13

Pottedpalm · 01/02/2024 19:06

I think @ThePeaAndThePrincess should run the country!

Heaven help us.

ThePeaAndThePrincess · 01/02/2024 22:08

Pottedpalm · 01/02/2024 19:06

I think @ThePeaAndThePrincess should run the country!

👸🏻Grin

ThePeaAndThePrincess · 01/02/2024 22:09

Heaven help us.

Nah, no supernatural stuff. I said evidence-based.

Natsku · 02/02/2024 05:46

Excellent posts by ThePeaAndThePrincess
Childcare/early childhood education is absolutely a service, and should be available at an affordable rate to everyone because its nothing but beneficial to everyone (well, as long as its quality care)

The UK tax system is so rigid, such stark differences in tax rate from just a small pay rise. In Finland its much more incremental which probably means no cliff edges (I certainly don't earn high enough to know for sure, I mean my income tax rate is 1.5%!) and every child, no matter what their parent earns, has a right to subsidised childcare (and child benefits, no cut off for that either) so everyone feels invested in the welfare state and sees real benefits to themselves as well as to others.

OrangeMarmaladeOnToast · 02/02/2024 06:33

Perhapsanorhertimewouldbebetter · 01/02/2024 19:31

Still not convinced, but you all crack on in your echo chamber.

Mmmm, a few people disagreeing with you on a lengthy thread is definitely an echo chamber.

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