Government urged not to scrap childcare vouchers
Prime Minister Gordon Brown is being urged to rethink plans to phase out childcare vouchers, amid fears that lower rate taxpayers could be penalised as a result.
Under the current scheme, families can save up to £2,400 a year on childcare costs in the form of tax relief, by sacrificing part of their pre-tax salary in return for electronic vouchers. The vouchers are then paid to officially-registered childcare providers.
The Prime Minister recently announced plans to scrap the scheme, with the proceeds being diverted to fund nursery places for two-year-olds.
A group of ex-ministers has written to the Prime Minister, voicing concerns that the measures will increase the gender pay gap, reduce the incentive for parents to work, and make childcare less affordable. A petition has also appeared on the
Responding to concerns, Gordon Brown has reiterated the fact that the changes would be phased in, and that nobody who is currently using the scheme will be affected in the next five years.
Further details on the changes are expected to be announced at the time of the Pre-Budget Report, on 9 December.