Tory leader Kemi Badenoch has vowed to end what she described as an “absurd” childcare trap affecting parents earning above £100,000. This announcement is scheduled for the first day of the party’s conference in Birmingham.
The current childcare cliff edge, which was introduced under the previous Conservative government, means that earning just one pound over the £100,000 threshold can leave families financially worse off. Former Chancellor Jeremy Hunt created this threshold when he announced that parents earning under £100,000 could claim 30 hours of free childcare for under four-year-olds.
Badenoch stated that the policy punishes individuals for working more. The proposed change, which also includes removing the cliff edge for tax-free childcare, is estimated to cost about £700m per year. This figure is based on a report by the Centre for the Analysis of Taxation (Centax).
Party officials indicated that the cost would be covered by reversing the increase in public servants in non-departmental public bodies, which they estimate would save approximately £1.6bn by 2030.