MPs revolt over childcare vouchers
Updated on 11 November 2009
Labour's plans to scrap tax breaks on childcare vouchers could cost party votes and jeopardise efforts to tackle the recession, MPs warn.
A Labour revolt, including nine former cabinet ministers, has mounted as MPs urge a rethink.
The MPs have backed a Commons motion that says the plans could worsen the gender pay gap, reduces incentives for parents to work, remove income from nurseries and impair the quality and affordability of childcare.
Over 60,000 people have signed an online petition demanding the government reverse the proposals.
Currently working parents can make savings on childcare costs by opting to receive £243 of their monthly pay in vouchers before tax deductions.
Scrapping the tax breaks would fund means-tested free childcare for less well off families.
The money saved through will instead be used to provide 40 per cent of two-year-olds with 10 hours of free childcare a week.
Patricia Hewitt, Estelle Morris, Hilary Armstrong, Beverley Hughes and Caroline Flint were among signatories on the petition letter sent to the Progress thinktank.
"We believe the government must look again at the decision, carefully considering the full impact of removing the tax relief on parents, employers and the childcare sector," they said.
"Surely this is not the time for us to remove a key support from hard-working families at the very point we need them at their most engaged and productive to fuel the recovery from recession.
"Crucially, in the run-up to an election, it will remove support for working parents and for businesses in key marginal constituencies."
"Childcare vouchers are an essential support to over 340,000 parents enabling more than 33,000 employers to help their employees, especially women, balance family and work responsibilities.
"Withdrawing them will penalise a significant number of lower rate taxpayers, reduce the overall amount of funding available for childcare, reduce parental choice and impact negatively on the economy as the UK moves towards recovery."
