Gordon Brown Advised to Rethink Childcare Plans

 
The Prime Minister has been warned over his plans for the future of childcare vouchers. However, Mr. Brown says that the current arrangements are badly targeted. About 340,000 parents take part in the vouchers scheme , with more than 300,000 families using them to save up to £2,400 a year through tax relief on the cost of childcare. The Prime Minister wants to replace the current scheme with funds directed to nursery places for two-year-olds.

In reponse to the proposals more than 75,000 people have signed a petition on the Downing Street website calling for a rethink. Mr Brown has responded to the petition by saying about one third of the benefit from the tax relief on childcare vouchers went to higher rate taxpayers.

It would seem that he also faces opposition from within the House of Commons to his plan, as 43 MPs have also signed the protest letter.  The same 43 MPs have also signed a Commons motion warning the move would exacerbate the gender pay gap, lessen opportunities and incentives for two parents to work and make childcare less affordable. One of the signatories, former international development minister Sally Keeble, told the BBC it seemed "quite wrong" to take support from one group of parents to help another. She also suggested the government risked a potential revolt on the scale of that over the 10p tax row unless it reconsidered the changes. 

The current scheme, which was introduced in 2005, can be used for nurseries, nannies or child-minders. It works by allowing parents to have up to £243 automatically deducted from of their salary - before tax and national insurance are taken off - in exchange for electronic "vouchers". These vouchers are then paid to Ofsted-registered child carers, from au pairs to nurseries.

Citizens Advice Northern Ireland, responding to the proposed changes, stated  "Citizens Advice cannot support the announcement made by Prime Minister Gordon Brown that more parents of two-year-olds will benefit from free care and early learning. The Prime Minister is proposing that his new scheme is to be funded by abolishing the current and extremely effective scheme of childcare vouchers. Under the new scheme the free childcare places on offer are to be for children in England only, as opposed to the UK wide reach of the current system.  As it appears that childcare vouchers are to be abolished across the whole of the UK this policy would actively discriminate against parents in Northern Ireland who will lose present entitlement and receive nothing in return. In addition, these proposals only allow for 2 hours of childcare per day and this is likely to be totally inadequate to allow parents to return to work, something which the childcare voucher system readily enables them to do. Citizens Advice is aware that more must be done to assist families but the impact of these proposals on those families who rely on existing support arrangements to meet the cost of childcare would be too great and as a consequence are unacceptable."