GORDON BROWN is facing a revolt from Labour women over plans to axe a childcare tax break that benefits the middle classes.
Senior backbenchers, including Patricia Hewitt, the former health secretary, and Caroline Flint, the former Europe minister who stepped down in June, have protested to No 10 over the decision to abolish childcare vouchers. They save parents up to £2,400 a year on the cost of nurseries, nannies or childminders.
Brown is withdrawing the benefit because he believes it is being used by too many people who can afford to pay the full costs themselves.
Advertisement
The decision has triggered a wave of protest from working mothers, many of whom say they will no longer be able to afford to work if the vouchers are scrapped.
More than 60,000 people, mostly women, have signed a petition on the Downing Street website lambasting Brown's decision and urging him to reconsider. A second petition is also being launched. Almost 40 Labour MPs have signed a parliamentary motion protesting about the move.
Advertisement
Last night there were signs that the rebellion was growing, with backbenchers preparing a letter to the prime minister. It has emerged that two cabinet ministers, Tessa Jowell and Yvette Cooper, were ambushed on the issue at a private breakfast meeting in Downing Street last week, during which Labour policy strategists labelled the proposals a "retrograde step".
Flint said: "This sends the wrong message to working mums. I am very worried about us taking a benefit away from a group of working women.
"We are in danger of not being seen to support working mothers, some of whom could find they are no longer able to afford to work. We need to be very clear about what we are trying to achieve here."
Advertisement
About 340,000 families claim childcare vouchers through about 35,000 employers. The vouchers can be used to offset the cost of childcare from Ofsted-registered providers, saving higher rate taxpayers £1,195 a year, and basic rate taxpayers £962 a year.
Both parents can use the vouchers, potentially saving couples £2,390 a year.
Advertisement
Brown plans to phase out the system from 2011, using the money saved to extend provision of free nursery places to two-year-olds from the poorest families. Downing Street claims a third of the benefit from childcare vouchers goes to high earners, meaning it is a "poorly targeted" tax relief.
However, the majority of those who benefit are on middle or lower incomes, with nurses among the biggest groups likely to be affected if the scheme is scrapped. Some have warned they will have to quit working for the NHS.
Some MPs fear the issue could become as politically damaging as Brown's notorious 10p tax proposal, which he was forced to abandon following widespread protest. Working women are a particularly important voter group for the Labour party, which has ploughed huge resources into benefits such as increased maternity leave and pay.
Advertisement
Hewitt has publicly labelled Brown's proposals "the wrong thing to do socially and the wrong thing to do politically". It is understood that she has privately urged No 10 to reconsider.She said: "We all welcome an extension of nursery education for two-year-olds, but I hope the government will think again on childcare vouchers."
Brown has admitted the issue has become a "big concern" for working mothers, who attacked him over the plans in a live interview on the website Mumsnet.
However, a No 10 source insisted it was right to phase out the scheme, saying: "This was not designed as a benefit for rich people. It is not being
as well targeted as it should. We believe it is right to redirect the money at nursery places for two-year-olds."