Former ministers attack childcare cuts

Former ministers have attacked plans to cut childcare vouchers for middle-class parents
Former ministers have attacked plans to cut childcare vouchers for middle-class parents

By Emmeline Saunders

Nine former ministers have hit out at Gordon Brown's "greatly unfair" cuts to childcare for working parents, which could jeopardize Labour's election prospects in marginal seats.

In a letter to Downing Street, the usually loyal former ministers - including Patricia Hewitt, Caroline Flint, Estelle Morris, Hilary Armstrong and Beverly Hughes - warned the plans to cut childcare vouchers for more than 340,000 parents would "mark the undoing of one of Labour's landmark achievements".

Mr Brown announced he was axing tax relief on childcare vouchers available through employers, which save parents up to £2,400 a year on nurseries, nannies or childminders, because too much of the money was going to middle-class parents.

Instead he has outlined plans to give parents of 250,000 two-year-olds 10 hours of free childcare.

But the ministers' letter said this cutting of popular support for hard-working parents could seriously harm Labour's chances at a crucial stage of the run-up to the general election.

"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," the letter argued.

"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."

It added: "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."

The prime minister proposes to rearrange childcare benefits to help the poorest parents, but critics say this penalises the middle classes.

The changes are due to come into force by 2015, meaning 340,000 parents could lose benefits.

More than 75,000 people have signed a Downing Street website petition criticising Mr Brown's decision, and opponents say the government's belief that the tax relief is regressive is based on out-of-date figures.

The former ministers believe the Treasury mistakenly views the childcare voucher as a middle-class perk, but the latest surveys suggested around three-quarters (74 per cent) of the childcare scheme users are basic-rate taxpayers.

Downing Street said it would review the criticisms in advance of the pre-Budget report, but the government maintains existing beneficiaries of the tax break will not lose out, and the current system privileges higher-rate taxpayers over poorer parents.


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