Childcare Boost 'Unfair To Stay-At-Home Mums'

Plans to give tax breaks worth £1,200 per child to families with two working parents have been condemned as unfair to stay-at-home mothers.

Chancellor George Osborne launched a consultation on the proposals, heralded in his Budget in March, on Monday as he toured a London nursery.

Parents earning up to £150,000-a-year will be eligible for the tax-free childcare vouchers, allowing families with up to £300,000 in total income to claim them.

Critics have pointed out that this is in stark contrast to child benefit, which has been cut for families with one parent earning more than £50,000 and axed entirely if one is on £60,000 plus.

Working parents will be able to claim 20% of childcare costs, up to a maximum of £6,000 per child a year, working out at £1,200.

The average cost of a part-time nursery place for a child under two in the UK is now over £5,000 per year.

Ministers believe the scheme, set to be in place by 2015, will help 2.5million households but it will not help the more than a million stay-at-home mothers and house husbands.

The Pre-School Learning Alliance, which represents childcare providers, accused the Government of going back on its promise to support stay-at-home parents.

Chief executive Neil Leitch said: “To offer this money to a couple whose dual earnings could reach £300,000 but not to a couple earning a fraction of this amount who choose to have one parent staying at home seems perverse.

“We would prefer the Government to properly fund universal childcare provision for all families, regardless of income. Instead, this seems to be more about dangling a £1,200 carrot to tempt mums back to work rather than providing real childcare choices.”

Parenting website Mumsnet welcomed the extra funding to help with the crippling cost of childcare but warned about a double standard.

Justine Roberts said: “There is concern that single-parent households might lose out whilst some very high earning two-parent households will benefit.

“A couple could earn £300,000 a year and still benefit. That doesn’t seem sensible and is inconsistent with other cuts, such as those to child benefit and to childcare tax credit.”

Meanwhile, the Resolution Foundation thinktank, which campaigns for low-income workers, warned that the extra money would mostly help higher earners.

It said 160,000 families on the bottom 40% of incomes would qualify, compared to 1.7m in the top 40%.

“It’s crucial that, following this consultation, the Government adapts its scheme to help the poorest working families – the very people who find high childcare costs the biggest barrier to work,” deputy chief executive Vidhya Alakeson said.

Mr Osborne insisted tax-free children would give working parents more choice and better access to the childcare they need.

The “vast majority – and I use the word vast to include virtually everyone who is going to benefit from this – are people on low and middle working incomes,” he insisted.

He added: “I have huge regard for mothers who want to stay at home and look after their children, that’s their lifestyle choice. I want to help those families, too, I’m not trying to be exclusive.

“We have a proposal on married couples’ tax breaks which I’m going to introduce in the Autumn Statement later this year … that will help stay-at-home mothers.”

Downing Street said the measures had to be taken in the wider context of the Government’s tax and benefits changes.

The Prime Minister’s official spokesman said stay-at-home parents were valued and would be helped by plans for a marriage tax break and the introduction of a single-tier pension.

He defended the £300,000 threshold, saying it was easier to stick with established tax levels because it would reduce red tape.

“This is about trying making it a straightforward scheme which will give support to those families where you have got both parents out to work,” the spokesman added.

Labour claimed the plans were proof that the Government is out-of-touch with parents struggling in the face of cuts and the rising cost-of-living.

“This Government has hit hard-working parents. Families with two children have already lost up to £1,500 in childcare tax credit,” families spokesman Sharon Hodgson said.

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