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London will lose out more than other regions in a plan to curb tax relief on childcare vouchers, it has emerged.
Government sources say a U-turn is likely to be confirmed in next month's pre-Budget report on plans that would hit middle-class families to fund new childcare for the poorest homes.
Labour MPs, including seven former ministers, threaten a rebellion unless the plan is toned down. A new version is expected to target families on higher earnings, where the breadwinner is on the upper tax rate of 40 per cent.
However, this means Londoners will be more heavily affected because salaries are higher in the capital to reflect housing costs, without necessarily making families significantly better off than people outside the capital.
Children's Secretary Ed Balls yesterday confirmed the rethink, adding it was "good for the Treasury to listen".
Reader views (1)
No surprises with this. Why is it the middle class people who actually work hard end up the worst off in this country? I have worked hard at school, found myself a career as well as having having a child and here I am yet again paying for the individuals who prefer to reproduce rather than work. Thinking about it these people have actually got it right!
- S Pope, Worcs, 16/11/2009 13:28
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