U-turn pending

Lobbydog has learnt that Number 10 is on the brink of officially announcing a U-turn on childcare vouchers.

At present, working parents can make savings on the cost of childcare by opting to receive £243 of their monthly pay in vouchers before income tax and National Insurance are deducted.

However Gordon Brown had said no new entrants would be accepted to the scheme after 2011, while the tax relief would end for all people still receiving the vouchers from 2015.

At conference the PM said the money saved would instead be used to provide 40% of two-year-olds with ten hours of free childcare a week on a means-tested basis.

But a revolt by Labour women who reckoned the change would push middle class voters away has forced the plan to be shelved.

I understand that they may simply take people on the top rate income tax off the vouchers scheme but retain the rest – time will tell.

News of the U-turn had yet to be confirmed by Downing Street officials, who until now claimed that no decisions had been made.