Will government pay for childcare?

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David Cameron in daycarePA

The cost of childcare is fairly heart-stopping. It's hardly surprising that so many families give up the fight and stay at home to look after the kids themselves. It's how 40% if women end up stopping work after having children.

However, a think tank has a more ground-breaking idea. It has suggested that the government should foot the bill. It also reckons free childcare would end up making money for the government if they took this approach.

The cost

If you put your child into nursery or with a childminder for just 25 hours a week, it would set you back roughly £5,000 a year on average. If you opted for care down the more expensive end of the spectrum this much care would cost as much as £14,000 a year. It's hardly surprising that we spend some 27% of our household income on childcare.

Payback

The argument, from the Institute for Public Policy Research (IPPR) is that free childcare would make it a no-brainer for the vast majority of mothers to return to work - in at least some capacity.

This would make a huge difference to their earning potential. It would mean not only would more women work in the pre-school years, but they would cease to take a massive step backwards in the workplace, and earn more for the rest of their career.

Tax

This increased earning would mean they pay more tax, and the IPPR calculates that this total tax would far outstrip the initial government outlay for free childcare.

It says the cost of free childcare would be around £6.7 billion - or £14,000 per child for the four years of pre-school. During that time a woman on the average wage would pay £34,000 in tax and national insurance. Even taking into consideration many women would be working part time and on lower wages, women will pay on average £4,860 more in tax than the childcare would cost the government.

But what do you think? Should the government pay for care? Would they make their money back? Let us know in the comments.