Vouchers for the kids

The Nineties have not been kind to many middle-class parents with young children. Weighed down by negative equity, fearful of losing their jobs, worried about the cost of childcare, there hasn't been much good news. Until yesterday, when John Major offered them a hand-out of pounds 1,100 to help pay nursery fees for four-year-olds. It looks like a shrewdly judged part of the Conservatives' pre-election strategy to reassure formerly loyal Conservative voters that a government which has taken the axe to one middle-class subsidy, mortgage tax relief, is not averse to finding a few substitutes.

The proposal is that every four-year-old should be entitled to a pounds 1,100 voucher for nursery education. The money could be spent in the private or voluntary sector, where parents would have to pay a top-up fee of anything up to pounds 2,000 a year. Alternatively, parents will have to rely on the cheaper state system, where no topping up would be permitted. But there is no certainty that they would get places there, since local authority nurseries are already oversubscribed. John Major did not guarantee a place for every four-year old. He only promised a voucher.

In principle, the nursery voucher is a good idea. It draws extra funds from central government - pounds 165m in all - into the vital sector of pre- school education. And by putting cash in the hands of parents, it allows the consumer to shape the system. That means more variety of provision, greater parental influence over standards and, in theory at least, more choice. There is fear that the private sector is short of capacity, but if the demand is strong, educational entrepreneurs will in time deliver the facilities. There is also a concern about the monitoring of quality, although there is no reason why this should be more difficult to achieve in private-sector nurseries funded in part by vouchers than it is in state schools and nurseries.

The weakness of the proposal is that it fails to discriminate between those who can already afford to pay for good-quality nursery education and those for whom even a pounds 1,100 subsidy will not buy a full-time place. This is the same argument which says that child benefit, another important part of the welfare state distributed to thousands of families which do not need it, should be taxed or means-tested.

It would be perfectly possible to target vouchers more carefully than offering a flat rate payment to each four-year-old. Taxation is one route, means testing is another. It would perhaps be simpler to offer a two-tier voucher, one worth, say, pounds 2,500 per child for those with family income below a certain threshold and the standard, lower-value voucher for everyone else. This is a more promising line of thought for Labour and Liberal Democrats than blanket condemnation of the voucher idea.

The case for giving children from less well-off families a particularly strong start in their educational life is formidable. Britain's biggest education problem is that it fails a quarter of those who pass through it. All the evidence indicates that more and better nursery education would cut that failure rate. Vouchers have a part to play in that process, but they will not work if their benefits are experienced mainly by families for whom nursery education is already an affordable reality.