18 Jan
The Times
Childcare tax breaks scuppered by Lib Dems
Apparently it's because most women earn hardly anything, not even enough to pay tax (terrible that that is so in 2013 rather than women earning even more than men - we have a long way to go to get equality)... and that full time working women who with their husbands pay half each of say a £30k full time child care cost would benefit most from a break of tax relief for that cost. Why should they not? What do we continuously protect those who work not very many hours when the squeezed middle work 10 hour days plus often 2 hours commute to keep the part timers in their benefits?
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Generous tax breaks to help working parents to pay for childcare have been scuppered by the Liberal Democrats, The Times has learnt.
The news will disappoint higher-paid mothers who lost their child benefit this month. They had been hoping to recoup part of the loss. Reports had suggested that the tax breaks could be worth up to £2,000 a year.
The plans have been abandoned because wealthier families would benefit the most. Mothers earning less than £8,105 do not pay tax and so would not be eligible, while thousands who receive tax credits would be excluded.
At a meeting this week of the ?coalition quad? ? David Cameron, Nick Clegg, George Osborne and Danny Alexander ? the Lib Dems insisted that helping these lower-paid families had to be a priority for any extra cash. Many have already been hit by a cut in child tax credits that increased their childcare bills by 10 per cent a week.
The two sides remain deadlocked over what a new childcare subsidy should look like, so the announcement has been put off. It had been pencilled in for last Monday, but is now unlikely to come until the end of the month.
However, details may soon be announced of sweeping deregulation of nurseries and childminders, a move that ministers hope will lead to lower prices. Under the reforms, childminders could be allowed to look after up to five children instead of the current limit of three, and staff ratios at nurseries would be lowered. There are, however, caveats about the type of experience and training required for those allowed to look after more children.
A source close to the negotiations said that the ?red line? for Mr Clegg, the Deputy Prime Minister, had been that the least-well-off had to come first. He is concerned that benefit changes and the introduction of the universal credit will increase disincentives to work for some low-paid families.
?Plans for tax breaks have been effectively killed off but there is still no agreement on funding,? the source said. ?The system is complicated and ministers are trying get the money to the parents who need it most, but it is not proving easy, especially as there is not a lot of new money.?
British families pay some of the highest childcare costs in the world, with on average 27 per cent of income going on nurseries, childminder or nannies. This compares with an EU average of 13 per cent. Despite the expense, quality is variable. Ofsted rates one in four providers as in need of improvement.
The Government spends almost £5 billion a year in subsidies but ministers are struggling to understand what it is all going on.
Stephen Burke, director of the Good Care Guide, opposed the plans for tax breaks, saying that they would only benefit better-off families. But he said that something had to be done to reduce costs or the economy would suffer. ?It?s make-or-break time for British families. The cost of childcare is crippling many families and ensures that work doesn?t pay for many parents,? he said. ?As other European countries show, the answer is for government to substantially increase subsidies for childcare.?