Stay-at-home mums are making a lifestyle choice and can expect no help with childcare costs, says Osborne

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Online voucher system expected to benefit about 2.5m households
Even two parents who earn £150,000 a year each will get payments
But plan has been criticised as an 'insult' to stay-at-home mothers
Chancellor says non-working mums have made a 'lifestyle' choice
Vouchers available to both parents earning up to £150,000 each
Critics brand policy 'inconsistent' with other cuts for those earning £50,000
Tory MP Nick de Bois says 'clumsy' policy gives the rich 'unnecessary' help

Published: 07:12 EST, 5 August 2013 | Updated: 19:39 EST, 5 August 2013

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Mothers who stay at home with their children have made a ‘lifestyle choice’ and can expect no help with their childcare costs, George Osborne declared yesterday.

The Chancellor enraged campaigners by unveiling a plan to hand up to £1,200 a child to families where both parents work – even if they bring home as much as £300,000 between them.

The scheme will be available to up to 2.5million families and will allow them to claim back 20 per cent of childcare costs.

Chancellor George Osborne left Titas (left) unimpressed during his visit to a nursery in Hammersmith as he unveiled plans for cheaper childcare

With the cost limit set at £6,000 a year per child, the scheme would be worth up to £2,400 for a family of four.

The 1.2million parents who stay at home with their children will not get a penny.

Mr Osborne said he had ‘huge respect’ for stay-at-home mothers and pointed out that the Government will ‘help’ them with a married couples tax break in November.

But he was accused of being patronising by saying those who put their children first had simply made a ‘lifestyle choice’.

He told BBC Radio 4’s World at One: ‘It will help those on tight family budgets who have to weigh up the cost of childcare when they are making difficult lifestyle decisions.

‘This is help for formal childcare. Obviously it’s not for stay-at-home mothers.

'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.’

But Laura Perrins, a mother who left her job as barrister to raise her two children, said: ‘Saying stay-at-home mothers have made a lifestyle choice is pejorative and patronising.

‘They are contributing to the economy, to society, to everything. Staying at home is not a luxury, it’s not a hobby. Women who chose to stay at home make huge sacrifices.

'The married tax allowance is something we have been calling for but their version is pretty pathetic when compared to the childcare vouchers.’

She accused the Government of ‘social engineering’ and claimed ministers ‘think that stay at home mothers are not conforming to what they want’.

Eye-popping: Critics have slammed the plans to offer taxpayer help to families earning up to £300,000 a year

Mr Osborne faced criticism from mothers’ groups because an existing, less generous, system of free childcare, which is due to be frozen from 2015, helps families with children as old as 16.

Justine Roberts, of parenting website Mumsnet, said: ‘In an ideal world you’d want help with childcare costs up until the time you stop needing childcare for your kids – which is more like 15 than five.’

The Chancellor defended the decision as the least bureaucratic way to implement the policy.

He said: ‘The administratively simple way to do that is to align it to one of the tax bands, one of the tax thresholds and at £150,000 there’s a 45p tax rate kicks in.

‘We could either have done it at £150,000 or we could have done it at just over £40,000 which is when the 40p tax rate kicks in and I took the view that I didn’t want to stop families earning £42,000 getting the help for tax-free childcare.’

But Lynne Burnham, secretary of Mothers at Home Matter, pointed out Mr Osborne has removed child benefit from families where just one parent earns more than £60,000.

She said single-earner families have suffered a ‘series of blows’.

Tory MP Nick de Bois said: ‘I want to see more support directed at families where one partner, one spouse, chooses to stay at home.’

The handouts will be available from September 2015 to parents with children aged five and under.

EVERYTHING YOU NEED TO KNOW ABOUT CHILDCARE PROVISION

WHAT CHILDCARE PROVISION IS AVAILABLE NOW?

Parents can surrender up to £2,915 a year from their gross salary which the employer will pay directly into the voucher account of a recognised childcare provider.

If they sacrifice this level of salary, basic rate taxpayers can make tax and national insurance savings of £933. The ESC scheme is not available to the self-employed or to those whose employers have not signed up.

Both parents can claim separately, doubling the amount of tax they can save.
The voucher scheme closes in September 2015 although those already in it can keep claiming.

WHAT’S THE NEW PLAN?

Parents will receive a tax break worth 20 per cent of their childcare costs, per child, up to £6,000.

That means they will receive £1,200 of free childcare for each of their children. There is no limit on the number of children who can be covered.

When the scheme is introduced in September 2015 it will apply to all children under 5. By 2020 it will apply to all children under 12.

HOW WILL IT WORK?

To receive tax-free childcare, a working family will set up a voucher account with a government-approved provider.

The family will pay money into their tax-free childcare voucher account.

The Government will top up the family’s payment at a rate of 20p for every 80p the family pays in. The provider will then issue a voucher equal to the value of both these contributions.

The family can then use this voucher to pay a qualifying provider for childcare.

WHO WILL QUALIFY?

The 2.5million families where both parents are in paid work and where neither is earning more than £150,000 a year.

In addition, anyone on carer’s allowance will be included, as well as parents who are on either maternity or paternity pay.

The Treasury claims 1.2million families will be better off moving to the new scheme and 1million families who couldn’t get ESC will be able to access the new scheme.

WHAT DOES ‘WORKING’ MEAN?

The Government has asked for views on who precisely should qualify. It could be someone working a minimum of 16 hours a week, or someone working two days a week.

The tale of two families

COUPLE ON £150,000: IT'LL BE A REAL HELP

In favour of vouchers: Janet Burton with son Ned, four

Mark and Janet Burton believe the childcare vouchers are ‘very important’.

Mr Burton, 55, a civil engineer, and his wife, 48, a marketing consultant, from Clapham in South London, have both returned to work since the birth of their son Ned four years ago.

Their combined income is £150,000 and since Ned turned three they have received 15 hours of free childcare per week, with £240 in childcare vouchers each month. The help with childcare costs mean the money the couple would have spent on childcare can be put aside to pay for private school fees.

Mr Burton said: ‘Both of us really appreciate the childcare help because it pays for nursery and after school clubs for Ned.

‘I think policies like this are very important for parents as working is really worthwhile. It’s an idea I fully support.’

STAY-AT-HOME MUM: IT'S ANOTHER KICK IN THE TEETH

'Real downer': The Bowers with daughters Emily and Naomi

Simon and Caroline Bower say the Government’s voucher system is another ‘kick’ for mothers who choose to look after their children.

Mrs Bower, 40, gave up her job as an assistant head teacher seven years ago when her daughter Emily was born, and has stayed at home to look after their two-year-old daughter Naomi.

The family felt penalised when they lost out on £2,000 a year in child benefit because Mr Bower’s business brought in more than £50,000 a year. They now stand to miss out on a further £1,200 because Mrs Bower no longer works.

Mr Bower, 43, who runs Pollards coffee roaster in Sheffield, said he did not understand why the Conservatives were undermining stay-at-home mothers.

He said: ‘This government is using fiscal policy to penalise stay-at-home mothers. It seems to have a real downer on them.

‘It’s just kick after kick for people like my wife who work hard for the good of their family.’