Lucy Powell has big ambitions for Labour’s childcare policy, find Robert Philpot and Adam Harrison
There is a pram in the corner of Lucy Powell’s small Westminster office. Labour’s shadow childcare minister does not keep it there as a prop. For her, the personal truly is political. A working mum with three children – a stepson and daughter at school and nursery back in her Manchester constituency, and a baby son in the parliamentary nursery – she is that rare thing: a politician with hands-on experience of her brief.
But while she empathises with the millions of other women who also juggle work and parenthood, Powell believes the case for investment in childcare is a hard-headed one: yes, she agrees, spending on early years helps to tackle gender inequalities and, with the right kind of high-quality provision, it can also reduce some of the inequalities that exist by the time children go to school. And, Powell emphasises, ‘it’s good for the economy because it will help get more women back to work.’ ‘You cannot get away from the fact that good quality childcare is expensive,’ she argues, ‘and a system where those costs are ever-increasingly borne by parents, which is the way it’s going at the moment, is a drag on the economy because it’s stopping people from working.’
Labour has already made clear that if it wins next May it will extend the entitlement to free childcare for three- and four-year-olds from 15 to 25 hours a week as well as guaranteeing ‘wrap-around’ care for primary school children. Powell has, though, dropped heavy hints she wants to go beyond this, having stated that her ‘personal ambition’ is a system of free universal childcare for all pre-school children.
Paying for that ‘personal ambition’ does not come cheap, however. As IPPR’s Condition of Britain report last month indicated, while the government can expect long-term returns on its investment, the short-term price tag is over £2bn per year. IPPR proposed abolition of the Tories’ new marriage tax allowance, restrictions on pensions tax relief, and a freezing of child benefit for school-age children to fund it. Labour trumpeted increases in child benefit throughout its time in office and the party moved swiftly to distance itself from any such freeze. Powell’s response is more nuanced: ‘My main objection to that would be that if we’re going to freeze child benefit for the over-fives, which in and of itself might not be a bad idea, I would want to see the fruits of that going to the over-fives.’
The shadow childcare minister goes on to indicate that she agrees with IPPR’s argument that the next government should prioritise universal childcare over further increases in benefits for all children, or restoring the universality of child benefit: ‘I think one of the things IPPR are saying in this report, which I think is a very welcome debate, is about trying to shift public support from money in the pocket to quality services and institutions.’ She believes the lessons of the last Labour government – which used childcare vouchers and tax credits to put cash for childcare directly in the hands of parents – need to inform the actions of the next. ‘While that was welcome; and they were good policies, what over time you weren’t able to do with that demand-side policy agenda is … to drive up quality, we weren’t able to increase provision, and in some cases it actually led to price inflation.’ If the government is to spend more on childcare, Powell says, ‘we have to make sure that we’re using that money to drive the policy agenda that we want to see, and I think that’s why supply-side funding, the extension of free entitlements, enables you to better do that than simply putting money in the hands of parents.’
For Powell, early years investment is a key, but under-developed, part of the public service reform agenda. ‘We talk a lot about decentralisation and devolution and place-based service reform and I think what’s not so high up in terms of the debate, but which is just as important for me, is how we reform the public realm to make the interventions and investments much earlier in cycles,’ she suggests. ‘Early intervention is a much more effective way of spending public money and if we can, as we are doing, think about how we can do that once we are in government I think we can see some real transformation in the way public services are delivered.’
Childcare has moved in recent years from a somewhat peripheral issue to a key political battleground. After an ill-fated attempt to promote deregulation as a cure-all for the interrelated problems of rising costs and lack of provision, the Tories are now trying to wrest one of Labour’s traditional strong suits from the party. Having extended free childcare from 12.5 to 15 hours per week for all three- and four-year-olds, George Osborne used March’s budget to beef up tax breaks, allowing people up to 20 per cent of childcare costs for each child under 12.
Is Powell not concerned that, even if it is not outbid, Labour may find voters unable to differentiate its incremental approach from that of the coalition parties? ‘If there were a general election tomorrow the offer on the table in terms of childcare is a very clear one … Our proposals at the moment are in addition to what the Conservatives have put on the table.’ She says, however, that ‘the challenge over the coming year to the election is to articulate that further [and] to be clear that there is a direction of travel. I’m clear I have bigger ambitions and my challenge is both to identify how these things can be paid for and come up with policy solutions for the challenges as we see them. And then, more than that, win the political argument internally for what I passionately believe in.’
References to winning ‘an internal political argument’ pepper our conversation. Recent media stories indicate shadow chancellor Ed Balls is reluctant to ‘fast-track’ universal childcare and considers the party already has ‘a pretty good childcare policy’. Powell acknowledges that Labour’s existing commitments – funded through an increased levy on the banks – amount to £800m, roughly one-third of the costs identified by IPPR for its proposals, while also indicating that, over time, she wants more. Lifting the lid on this behind-the-scenes jockeying could be seen as a healthy sign: an acknowledgment that shadow ministers are engaged in a fight for a limited pot of cash and that the party is serious about identifying its priorities for government.
And Powell is no novice when it comes to political street-fights. After working at Millbank in the run-up to the 1997 general election, she became a parliamentary researcher for Beverley Hughes, later a minister for children and families, before becoming director of Britain in Europe, the pro-Europe, cross-party pressure group established in 1999, initially to support British membership of the euro. ‘I bear the scars of several years trying to promote the importance of the EU to this country,’ she remarks wryly. Having seen the ‘absolutely vital’ relationship to jobs and investment in her constituency, Powell remains ‘absolutely passionate’ about Britain’s membership. Nonetheless, she thinks that ‘Europe fundamentally has got to start reforming the way in which it works. It has become too distant and remote.’ Would she like to see Labour do more to make the case for Europe? ‘I feel that the right position for the country is to say that we’re not going to promise a referendum at some point in the future on the basis of a renegotiation that’s not been had, but that we will offer one if [there are] any further changes to the EU.’ She acknowledges, however, that Labour’s position is ‘a really hard argument to have because it looks like we’re not giving a say to the public’. Nonetheless, Powell argues, it is the right policy, not least because of the uncertainty over business investment decisions which, she thinks, the Conservatives’ referendum pledge has created.
After leaving Britain in Europe, Powell was selected to fight Manchester Withington. Narrowly failing to defeat the Liberal Democrat incumbent in 2010, Powell spent the following summer managing Ed Miliband’s leadership campaign, later becoming his acting chief of staff, and then deputy chief of staff. A by-election in November 2012 saw her elected member of parliament for Manchester Central. What most surprised her during her two years at the Labour leader’s side? ‘Oh God,’ she laughs, before recalling the immediate post-general election period. ‘If someone had said to me in 2010, “in 2014 the Labour party will have been ahead in the polls most of the parliament, the Tories will be floundering, and the next election will be Labour’s for the taking,” I think I, and probably nearly every one of my parliamentary Labour colleagues, would have absolutely taken that.’ And, for her, much of the credit must go to the oft-criticised, somewhat beleaguered, man she helped elect to the party leadership: ‘When I look back to how things were in 2010 when Ed first became leader and how difficult they were at that point and how divided the party was given that we’d had such a close and difficult election for the leadership, it’s amazing that we’ve come through, that Ed’s led us through that time to now, those issues largely having been put to bed.’