Britain’s childcare costs lead to ‘motherhood penalty’, says PWC

BRITAIN has fallen behind Poland and Hungary in gender equality rankings as excessively high childcare costs keep women out of the workforce.

The UK now ranks 14th among 33 OECD countries for workplace equality, according to a new report from PWC.

Britain has fallen five places in the rankings over the past year, dropping behind Finland, Belgium, Ireland, Hungary and Poland.

PWC said rising childcare costs were keeping British mothers out of the workforce and holding back their lifetime career progression.

Nursery fees in Britain have risen by a fifth since 2017, significantly outpacing inflation. The availability of childcare providers has shrunk by 10pc in the past four years.

Larice Stielow, senior economist at PWC, said: “For many it is more affordable to leave work than remain in employment and pay for childcare, especially for families at lower income levels.”

While fewer women than men dropped out of the workforce, PWC found the gender pay gap in Britain grew by 2.4 percentage points to 14.4pc. The increase was four times the OECD average. Ms Stielow said: “The motherhood penalty is now the most significant driver of the gender pay gap and, in the UK, women are being hit even harder by the rising cost of living and increasing cost of childcare.”

Parents in the UK contend with much higher childcare costs than other developed nations. British parents typically spend 29p of every pound they earn in a month on childcare, compared with just 1p for German couples, PWC said.

Separate research published by the British Chamber of Commerce today found that women were nearly twice as likely as men to say childcare responsibilities had hurt their career progression. Two thirds of mothers said caring duties had held them back, the BCC said.

Chancellor Jeremy Hunt is reportedly considering some giveaways for parents in next week’s Budget in an effort to get more parents back to work and address labour shortages.

Businesses have urged Mr Hunt to extend free childcare hours to parents with young children, however, the Treasury is understood to believe this would be too expensive.

Luxembourg, New Zealand and Slovenia scored highest in terms of gender equality, PWC said. The auditor looked at a range of metrics such as female labour force participation, unemployment and pay gap.