Controversy grows over plan to axe tax aid on childcare vouchers

Published on Wednesday 11 November 2009 21:47

THE row over Gordon Brown's plans to scrap tax relief on childcare vouchers escalated last night, threatening to echo the controversy over the 10p tax.

So far, seven former Cabinet ministers have confronted the Prime Minister over his decision to phase out the childcare vouchers – worth up to 2,400 per family – over five years.

Mr Brown tried to play down the controversy, telling MPs at Prime Minister's Questions that no-one currently receiving the tax relief would lose it.

Downing Street said later that the voucher programme was a "very important government initiative" which would be refused to new applicants. But a spokesman said the government was open to persuasion.

The Conservatives signalled that they would keep the vouchers, despite earlier pledges to scrap "middle-class" benefits. The shadow family minister, Maria Miller, said working parents would lose vital support.

She said: "These are basic-rate taxpayers, working in areas such as the health sector and doing vital jobs. They rely on this support."

She added: "Hard-working families will be left to pick up the pieces, and this has got to stop."

About 340,000 families use childcare vouchers. The government estimates many of these are in the higher tax bracket, and ministers want to divert the cash to free nursery places for two-year-old children instead.