Budget Resolutions and Economic Situation

Martin Docherty-Hughes Excerpts

Tuesday 21st March 2023 Commons Chamber

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

It is a pleasure to follow the right hon. Member for Islington North (Jeremy Corbyn). One policy proposal in the Chancellor’s statement leapt out at me. It was yet another one praising the efforts of small independent northern neighbours. Just before announcing a range of measures to increase childcare, the Chancellor said:

“Our female participation rate is higher than average for OECD economies, but we trail top performers, such as Denmark and the Netherlands. If we matched Dutch levels of participation, there would be more than 1 million additional women working.”—[Official Report, 15 March 2023; Vol. 729, c. 845.]

On the announcement of universal childcare for one and two-year-olds, we could say that imitation is the sincerest form of flattery, since my preferred candidate to be Scotland’s First Minister, Humza Yousaf, had already announced his intention to implement that policy in Scotland, based on our Government’s scheme—also copied by the UK Government—for three and four-year-olds. However, it was the choice of countries that the Chancellor used, and being able to delve a little into the reality behind the headline statistic, that intrigued me.

While the Netherlands and Denmark have higher female participation rates, the consequences of both are quite different. While the Dutch Government policy has encouraged more women into working, it has done a very poor job of allowing flexibility within the workplace and with childcare, resulting in the unfortunate scenario whereby Dutch women’s outstanding participation in the labour market paradoxically contrasts with them working the fewest hours of women in any developed country. The University of Utrecht calls that phenomenon the part-time trap, as women seeking to balance childcare and household commitments are forced into working fewer hours. That has a consequence for the economy as a whole, with representation for Dutch women in senior positions lagging behind that in similar states, and the resultant gender pay gap costs the country €10.8 billion annually. On a personal and social level, it means that only 64% of Dutch women are financially independent, compared with 81% of men.

It will be no surprise to those who know my politics to hear me say that increased female participation in the labour market could best be achieved by following the social democratic principles that underpin the Danish childcare system, with the Dutch system—underpinned by the same imperfect patchwork of primarily private providers—rivalling the UK for its cost to families. In Denmark, this system is underpinned by local authorities helping parents to find provision, with central Government helping to subsidise costs. Of course, we all know that the real leader seems to be Finland, which provides universal, local authority-led provision from birth to six years.

The key for me is the local authority-led aspect of this. This increase in Government-funded provision will be of little tangible use if it is fed through a majority of less accountable private providers that have less bargaining power with central Government and will therefore be more vulnerable to the inevitable future squeezes in the per-place fee, passing it on to parents through other costs and making it a less attractive option for those parents who can least afford it.

However, the biggest barrier to public sector involvement in provision for one and two-year-olds will be capital expenditure for new facilities, especially as they face their own pressures—investment that I am willing to bet will not be forthcoming from a Government who are always intent on doing things on the cheap.