Conservatives propose £700m childcare giveaway for high earners ahead of conference

The Conservatives have unveiled a proposed £700m childcare giveaway for high earners ahead of their annual conference, saying they would end the “cliff edge” where free entitlement ends at salaries above £100,000.

The plan, set out the day before the event begins in Birmingham, follows the earlier proposal by Kemi Badenoch’s party to abolish most stamp duty, another change to taxation that would disproportionately benefit wealthier people.

Under the current system, put in place under Rishi Sunak’s government, families with young children in England are eligible for 30 hours a week of free childcare, but this cuts off if one parent earns more than £100,000, irrespective of another parent’s salary.

Under the Conservative plans, this limit would be abolished, with all parents working 16 or more hours a week able to claim the childcare.

The party says it would cost aabout £700m a year, which it says would be paid for by cutting jobs at organisations such as Arts Council England and the Environment Agency.

In comments released to promote the idea, Badenoch said the current system was “absurd” and a disincentive to work more.

She said: “Conservatives believe that you shouldn’t be punished for working more, but this childcare cliff edge does exactly that.

“I’m a mum-of-three and I’ve had to make the same choices many families have had to make on work and childcare. Those choices are difficult already, government should not be making them harder.

“No one should be turning down a promotion or a pay rise because they literally cannot afford to earn more.

“It is often women who end up carrying more of the childcare responsibility so a system that makes it harder for them to progress in their careers is not helping families, it is not helping women and it is definitely not helping the economy.”

A Labour spokesperson said: “It tells you everything you need to know about the Tories that the first of their own tax policies they want to unpick is one helping higher earners. They clearly don’t want to admit that they set the thresholds in the first place.”

The idea of abolishing stamp duty on people’s primary residences in England and Northern Ireland was unveiled by Badenoch at last year’s conference, costing an estimated £9bn a year.

While some economists have argued that stamp duty can have a drag on the housing market and even the economy, as it disincentivises moving, scrapping it rather than reforming the tax would disproportionately benefit better-off people and those in London and south-east England.

The other main policy set out ahead of the conference was a plan to build 50,000 new prison spaces in England and Wales, a 50% expansion in capacity.

This would be paid for in part by slashing overseas aid to £1bn a year, a 90% cut on current plans. Under Keir Starmer, Labour said they would reduce aid from 0.5% of GDP to 0.3% by 2027, but even that lower proportion would still amount to £9bn a year.