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11/11/2009
PM Faces Childcare Vouchers Revolt
Plans to scrap tax relief on childcare vouchers for most parents could cost Labour crucial votes at the election, a group of senior MPs have warned.
Nine ex-cabinet ministers are among the signatories on a letter to Gordon Brown warning the proposals could harm Labour and jeopardise efforts to tackle the recession.
Over 300,000 families are currently using the vouchers to save up to £2,400 a year through tax breaks on childcare costs.
However, Mr Brown wants to divert the money to fund means-tested free childcare for less well-off families. He believes the tax relief is badly targeted.
Over 75,000 people have signed a petition on the Downing Street website calling for the PM to reverse the proposal.
In response to the petition, Mr Brown said working parents on lower incomes would get more support through tax credits.
He added that around a third of the benefit from the tax relief on childcare vouchers went to higher rate taxpayers and that no-one currently using the scheme will be affected by the plans within the next five years.
According to the Guardian, Patricia Hewitt, Estelle Morris, Hilary Armstrong, Beverley Hughes and Caroline Flint are are among 43 MPs to sign the protest letter.
The letter printed in the Guardian said: "Withdrawing [the vouchers] 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.
"Crucially, in the run-up to an election, it will remove support for working parents and for businesses in key marginal constituencies."
The 43 MPs have also backed a Commons motion warning the move would exacerbate the gender pay gap, reduce opportunities and incentives for two parents to work and make childcare less affordable.
Business Secretary Lord Mandelson said he will study the letter but warned the MPs to be realistic about the "difficult choices" the government faces over targeting the resources at those most in need.
(GK/KMcA)
Nine ex-cabinet ministers are among the signatories on a letter to Gordon Brown warning the proposals could harm Labour and jeopardise efforts to tackle the recession.
Over 300,000 families are currently using the vouchers to save up to £2,400 a year through tax breaks on childcare costs.
However, Mr Brown wants to divert the money to fund means-tested free childcare for less well-off families. He believes the tax relief is badly targeted.
Over 75,000 people have signed a petition on the Downing Street website calling for the PM to reverse the proposal.
In response to the petition, Mr Brown said working parents on lower incomes would get more support through tax credits.
He added that around a third of the benefit from the tax relief on childcare vouchers went to higher rate taxpayers and that no-one currently using the scheme will be affected by the plans within the next five years.
According to the Guardian, Patricia Hewitt, Estelle Morris, Hilary Armstrong, Beverley Hughes and Caroline Flint are are among 43 MPs to sign the protest letter.
The letter printed in the Guardian said: "Withdrawing [the vouchers] 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.
"Crucially, in the run-up to an election, it will remove support for working parents and for businesses in key marginal constituencies."
The 43 MPs have also backed a Commons motion warning the move would exacerbate the gender pay gap, reduce opportunities and incentives for two parents to work and make childcare less affordable.
Business Secretary Lord Mandelson said he will study the letter but warned the MPs to be realistic about the "difficult choices" the government faces over targeting the resources at those most in need.
(GK/KMcA)
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