Spring Budget: Non parents support tax incentives to help parents into work

The challenge designing popular and affordable return-to-work policies is laid bare in new research by PwC ahead of the Spring Budget.  With cost of living dominating the public’s priorities, voters across the political spectrum favour tax cuts and interventions that help everyone, rather than specific groups.  However, when it comes to targeted measures, there is more support for tax incentives that help parents of young children, rather than the over 50s. 

Targeted income tax cuts for parents of young children are seen as a popular method to encourage this cohort back into work - with 58% of people thinking this is fair (including 55% of non-parents) and at least 57% of respondents across all age groups.

Reduced tax rates for nurseries and childcare centres to help them lower fees is also regarded as both effective and fair, among 68% and 74% of respondents respectively. 

While income tax cuts to support the over 50s are also seen as effective (60%) and fair (57%), the support drops significantly among under 40s. Just 49% of those aged under 25 think this would be fair along with 50% of those aged 25-39.

According to the research, the fairest policy of all to encourage people back to work would be a universal guarantee of flexible working, although respondents felt targeted flexibility for parents of young children would actually be more effective.

Laura Hinton, PwC’s UK Head of Tax, People and Organisation, said:

“We know that getting economically inactive people back into the workforce is a key priority of the Chancellor to help kickstart growth. But some of the most popular ideas to expand the labour force come with a significant upfront cost, while targeted measures have the risk of alienating those people who don’t benefit. However, the research highlights the extent to which the public empathise with the challenges faced by the economically inactive, particularly parents of young children. 

“What stands out is the importance of fairness, especially at an intergenerational level: measures should be universal, except to correct perceived unfairness - for example around double taxation or parenthood.”

Ends.

Notes to editors:

1. Polling data based on polling of a representative sample of 2,067 UK adults carried out by Brunswick on 3-5 March. For more information on the polling please contact david.bowden@pwc.com