Schedule 13 - Childcare and childcare vouchers
Finance Bill (except clauses 4, 5, 20, 28, 57 to 77, 86, 111 and 282 to 289, and schedules 1, 3, 11, 12, 21 and 37 to 39)
5:00 pm
Ms Dawn Primarolo (Paymaster General, HM Treasury; Bristol South, Labour)
I cannot rule out some switching. It would be impossible to give an undertaking. The measure is about seeing a growth in the provisions for child care made by employers—because employers are doing a lot. We do not see it as a substitution. Frankly, if people were to move across from one child care provision to another as a result of the voucher, they would free up the child care place that they have left for someone else.
The hon. Gentleman chided me earlier on, saying that I should ensure that we track the provision. It is cash-limited for a specific purpose. The tax planning industry would even have to surprise me, which takes some doing now, if it could tell us how £50, cash-limited, only for child care, paid direct to the child care provider and then cashed in from the voucher issuer, with a complete audit trail, could fail to be transparent—let us wait and see. I think the hon. Gentleman was trying to have a bit of fun, given what I have had to say before about tax planning.
I turn now to the question of the self-employed. Allowing a tax deduction for the cost of child care for all working parents rather than through a targeted exemption would be expensive and poorly targeted. I will not make any bones about that—the Government just would not do it. We believe that financial help towards child care cost for low to middle-income families should be provided in the tax credits. Self-employed people can receive help with the cost of formal child care through the child care element of the working tax credit.
We believe that the whole point of the arrangements is that employers have an important role to play in helping their staff to balance their work and family lives. The measure provides the incentive to encourage employers to support their employees with child care. The Daycare Trust estimates that only one in 10 large employers currently help their staff with child care. We believe that the measure is targeted at employers, and it is right that it should be. There is help elsewhere for the self-employed and it is impossible to see how we could make a voucher system work in such a way.