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Tax Credits

Volume 447: debated on Thursday 8 June 2006

To ask the Chancellor of the Exchequer what assessment he has made of the impact of the working tax credit child care element on child care costs; and if he will make a statement. (75178)

Child care costs are affected by a number of factors, such as the availability of child care provision, local wage levels, or land or rental prices where child care is offered. The child care element of the working tax credit has had a significant impact on the affordability of child care for low to moderate-income families, reducing the proportion of child care costs that they pay. Through the child care element of the working tax credit, working parents receive financial assistance with up to 80 per cent. of the costs of registered and approved child care, up to a maximum of £300 per week (£175 for one child). In April 2006 374,000 families were benefiting from the child care element, and they were receiving an average of £50 per week towards their child care costs.

The Government remain committed to its vision to ensure that all families are able to afford flexible, high quality child care services that are appropriate to their needs.