Progress urges PM to rethink scrapping relief on childcare vouchers

By Jessica Asato / @Jessica_Asato

Yesterday, Progress sent a letter to the Prime Minister signed by 10 backbench Labour MPs including former Health Secretary Patricia Hewitt, former Education Secretary Estelle Morris, former Europe minister Caroline Flint and former Children’s minister Beverley Hughes. It asked Gordon Brown to rethink his announcement to remove tax relief on Employer Supported Childcare Vouchers because of the impact it would have on hard-working parents, and particularly on women’s ability to juggle work and childcare. The relief is being taken away to pay for an increase in state support for childcare for 250,000 two-year olds, which Gordon Brown announced in his speech to Labour Party Conference this year.

We believe that extending childcare is an excellent step forward, but not if it comes at the expense of other parents who often struggle to balance work and childcare. The Government’s argument is the tax relief currently goes to higher rate tax-payers, which could be better targeted on poorer families with children aged two. We agree that in general it is a good idea to redistribute government spending from rich to poor, particularly in a tight fiscal situation as we are experiencing now. But by concentrating on the 30% of higher rate taxpayers who receive the benefit, the Government are ignoring the 70% of parents who are basic rate taxpayers and receive childcare vouchers. These people are not rich and they rely heavily on childcare vouchers to ensure that they can cover their childcare responsibilities.

I wrote an article about this issue last week and was moved by the comments I received from working mothers about how this would directly impact on them. I thought that it surely can’t be right to take away a benefit from one group of working women when you’re not likely to encourage many women into work by only funding 10 hours’ childcare for two-year olds. Why can’t we find that funding from somewhere else? Like downgrading Trident, for example?

The strength of anger in the country can be heard loud and clear – the most popular petition on the Downing Street website is one which also asks the PM to rethink his plans with over 76,000 signatories on it.

Progress have also launched a petition and we are asking Labour Party activists and supporters to sign it to see if we can change the Government’s mind.

Ideally this Government would eventually support universal childcare, but until then, let’s not take childcare support away from parents who rely on it in a difficult economic climate.