THE state will pay close to £14,000 a year for someone to look after another woman’s baby. It will pay the baby’s mother £252, at most, to do it herself.
Those are the two numbers to hold on to. The first is the value of a fully funded nursery place for an under-two – 30 hours a week, 38 weeks a year, at the £12.04 hourly rate confirmed for 2026-27 – available only where the parents go out to work. The second is the Marriage Allowance, the solitary gesture the tax system makes towards the couple who decide that Mum will raise their children on Dad’s wage.
Into this landscape comes Policy Exchange with A Matter of Choice: Giving Parents Back Control Over Childcare, written by Will Orr-Ewing and published on July 1, 2026, with a foreword by the former Labour education secretary Ruth Kelly and endorsements from left and right.
Credit where it is due: the report sees what the childcare establishment refuses to see. It says plainly that the system fails ‘both parents who want to work more, and those who want to spend more time with their children’. It cites polling suggesting that around six in ten parents, given complete financial freedom, would rather one of them stayed at home with their young children – a finding the education department’s own parents’ survey echoes, with two-thirds of working mothers of under-fives saying they would cut their hours to be with their children if they could afford it. It rebukes the state for ‘picking winners’ among family arrangements. Its best idea is genuinely good: add £2,500 a year to child benefit for every child under two, universally, with no work test – money a family may spend on a nursery, a childminder, granny’s petrol, or simply on making it possible for mum to stay. For the under-twos, Policy Exchange trusts the family. Two cheers.
At the third birthday the trust runs out. All existing entitlements for three- and four-year-olds would be replaced by a £7,000-a-year voucher on a pre-loaded card, spendable at any Ofsted-registered provider and nowhere else. The nursery qualifies; the childminder qualifies; the holiday club and the ‘registered neighbour-carer’ qualify. The one person in Britain who cannot receive a penny of it is the child’s own mother. The logic the report applied to babies – give families cash and let them choose – is abandoned at age three without a word of explanation. A report that scolds the state for picking winners ends by picking the oldest winner of all: paid strangers over unpaid mothers. Mothers of school-age children, who might want to be there after school and through the holidays – and through the teenage years, when children need their parents differently but no less – appear nowhere at all.
The word ‘marriage’ does not appear in its 63 pages; the nearest it comes is a line about how the system ‘marries up state structure’. That silence matters, because the deeper unfairness sits in the tax system the report leaves untouched. A single earner on £61,000 starts losing child benefit; the couple next door on £59,000 each – £118,000 between them – keep every penny. A wife who stays home may transfer a tenth of her personal allowance to her husband, worth that £252 a year; the rest of it dies the day she gives up her salary. CARE (Christian Action Research and Education) calculates from OECD data that the tax burden on a one-earner married couple with two children on the average wage is nearly 40 per cent above the OECD average. Policy Exchange abolishes the £100,000 childcare cliff – a real anomaly, chiefly afflicting the well-paid – and leaves the architecture of family taxation exactly as it found it.
Strangest of all, for 63 pages about small children, is the question never asked: is any of this good for them? The words ‘mental health’ appear nowhere in the report. Neither does ‘attachment’, nor ‘wellbeing’. The nearest approach is a single line conceding that development milestones ‘have not shifted in a positive direction for some time’. One in five children aged eight to 16 in England had a probable mental disorder in 2023; in 2017 it was around one in eight. Nobody can honestly pin that rise on nurseries, and I will not pretend otherwise; screens, lockdowns and poverty are all in the dock. The evidence still deserved a hearing. Quebec’s cheap universal childcare left measurable marks – more anxiety and aggression in small children, then worse health, lower life satisfaction and more crime when those cohorts reached their teens. Studies of stress hormones find most toddlers’ cortisol rising through a nursery day and falling at home. Britain’s own EPPE research linked high levels of group care before age three, especially before two, with slightly more anti-social behaviour in a minority of children. Civitas reviewed 40 studies across 12 countries and found not one able to show that 30 hours a week of formal care from nine months leaves a child better off in the long run than being cared for at home. A plan to re-route £10.5billion of childcare spending owed the children at least the question.
The report cannot claim ignorance. David Goodhart endorses it, and his own book The Care Dilemma argues that Britain’s devaluation of mothering has cost children dear – proposing both a Home Care Allowance, put at £10,000 per child per year on the report’s own account of it, and tax relief for the sole breadwinner in a two-parent family: precisely the reforms this report declines to make. When your own endorser has written the book on your blind spot, the omission is not oversight. It is a failure of nerve.
The right answer starts where this report would not go: with the family, not the childcare place, as the unit of support, and the tax system as the honest instrument. A child tax allowance for married couples – substantial, transferable, attached to the couple actually raising the child – would let families keep enough of their own money to make the choice the pollsters keep hearing about. Hungary spent fifteen years building exactly that architecture: lifetime exemption from income tax for mothers of three or more children (and, since January, most mothers of two), an interest-free marriage-only loan with a third of the debt cancelled at the second baby and all of it at the third, and housing help scaled to family size. Marriages doubled from 35,520 in 2010 to a record 72,030 in 2021. Fertility rose, then sagged; Hungary is no demographic miracle, and the cost, commonly put at some five per cent of GDP, is contested. It proved something simpler: the machinery can be built, and a modern tax system can be made to see mothers, marriage and children. Even Hungary’s new government, elected in April to sweep away Viktor Orbán’s regime, has shown no appetite to dismantle the family architecture; its manifesto promised to extend family allowances, not abolish them.
There is a place to say all this. The Competition and Markets Authority opened its market study of childcare on July 1 and takes evidence until July 26. Somebody should put this report in front of it – the half that is right and the half that is missing – and ask the question Policy Exchange funked: why does a mother’s care count for nothing? A country that pays £14,000 to a registered stranger and £252 to a married mother has not just mispriced childcare; it has forgotten what the family is for.
