Extra childcare ‘worth £2.2bn for Scotland’ claim

ALEX Salmond’s plans to xtend free childcare will increase economic output by £2.2 billion and revenues by an estimated £700 million, a Scottish Government paper claims today.

Alex Salmond in Cowdenbeath with by-election candidate Natalie McGarry. Picture: Hemedia
Alex Salmond in Cowdenbeath with by-election candidate Natalie McGarry. Picture: Hemedia

An analysis of the impact of the SNP’s childcare plans claims that its proposal to enable more mothers to go out to work will result in an improved economic performance.

According to the Scottish Government document, the SNP proposals will result in an increase of six percentage points in the female labour market activity rates.

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Getting more women into the workplace will have the knock-on effect of increasing output by 1.7 per cent (£2.2bn) and revenues by an estimated 1.5 per cent (£700m).

The Scottish Government has put extending childcare at the heart of its campaign for independence.

Last week, Finance Secretary John Swinney announced a £3.5m drive to help more women find work.

It followed a Scottish Government announcement to extend free childcare to more than 15,000 two-year-olds by 2015.

The Scottish Government also unveiled plans to introduce free school meals for primary one to three pupils to signal its commitment to a welfare state at a time when Chancellor George Osborne is examining ways to cut welfare expenditure.

The Scottish Government document is also expected to compare the differing amounts of cash for Scotland and Westminster under the new income tax powers that will come to Holyrood as a result of forthcoming constitutional changes.

The paper will claim that even under the forthcoming powers of the new Scotland Act, 88 per cent of increased revenues and accompanying reductions in welfare spending flow to Westminster, with just 12 per cent going direct to the Scottish Government.

Last night Swinney said: “We can and will stretch every financial sinew to expand childcare. The announcement of more places for two-year-olds, helping their parents find work, shows that. But we cannot hide from the simple reality that a wholesale transformation to match the best in Europe can only come with independence.

“Increasing the number of people in work moves people out of welfare and into paying tax. That generates the extra government revenues we need to pay for the transformation of childcare. The paper reveals, however, the stark reality of devolution. Even with the new powers coming to Holyrood under the Scotland Act, the vast bulk of those increased revenues go to Westminster.”

Swinney added: “Given the Chancellor is boasting of £25bn of cuts to come, no-one believes that he plans to make the bulk of that revenue available to Scotland. The only way to access it is with independence.”

Given that power over childcare is devolved to the Scottish Parliament, Labour has argued that Salmond can improve conditions for mothers who want to go out to work without an independence vote.

Scottish Labour’s finance spokesman Iain Gray said: “John Swinney is making our point for us. Increasing childcare will undoubtedly bring more people, particularly women, into jobs and help Scots deal with the cost of living crisis.

“He doesn’t need independence to do that, he could do it now. We said that politics is about hard choices and it’s clear that funding everything we want isn’t always possible. But it was the SNP who said childcare was their top priority, so if that’s true then they should deliver their White Paper pledge and give childcare to 50 per cent of two-year-olds now.”

Speaking after Labour failed to support the Scottish Government in a Holyrood debate last week on free school meals, the SNP MSP Annabelle Ewing said: “Do Labour have any policies left? We’ve only been back in parliament for one week and already they’ve appeared to throw out five policies they once claimed to be for: free school meals, extension of childcare, the council tax freeze, the small business bonus scheme and lower business rates.

“The pressure is on Johann Lamont to explain exactly what – if anything – Labour stand for in the new year.

“They say they support free school meals and the extension of childcare provision. But actions speak louder than words, and by voting against these policies this week it’s clear they cannot possibly support the measures.”