The rabbit in Jeremy Hunt’s hat watches children’s telly, still drinks milk at bedtime and has
a personality disorder. Meet… the toddler.

In his Budget on Wednesday, the Chancellor will enter battle with Labour on childcare.

British parents face some of the highest childcare costs in the world. This drives middle- and low-earners out of work, because they feel it is simply not worth them getting a job. They lose money, or the financial gain can be marginal, leading them to question why they should sacrifice time with their
young families.

This continues to disproportionately affect mothers’ careers and earnings, consequently acting as a drag on the British economy.

So the £4bn boost to free childcare for one- and two-year-olds – expected on Wednesday – is a socially progressive, pro-growth policy.

The proposal shows how childcare has become a key battleground ahead of the next general election. And the Treasury finally accepts the need to intervene, in order to unblock Britain’s labour market, as well as to incentivise extra capacity among childcare providers.

If this policy is well funded and carefully constructed, the results could be spectacular for society and the economy. But there is little point in pledging more free hours if Government subsidies to childcare providers don’t cover their costs. There would be no incentive for nurseries and childminders to create capacity for extra chiddlers.

All eyes on the despatch box at 12.30pm on Wednesday.

Twitter: @olyduff

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