ALAN Milburn has accused David Cameron of planning to help the better off with the soaring cost of childcare – while the poor miss out.
The former Darlington MP – the Government’s adviser on child poverty – said new flagship proposals would “put taxpayers' money in the wrong place”.
And he added: “Subsidising the childcare of families with earnings of up to £300,000 is the wrong priority when low-income families in work have had Government support for their childcare cut.”
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The comments are the strongest criticism made by Mr Milburn since – to the anger of many Labour figures – he took on the role as Mr Cameron’s adviser.
They follow the Coalition’s pledge to bring in 20 per cent tax relief on childcare from 2015, worth up to £1,200 per child per year.
Ministers insist their plans will help parents in the so-called “squeezed middle”, hit by increases in the cost of nurseries and childminders.
They will help all parents in work who earn less than £150,000 per year and do not already receive tax credits or the current employer-supported childcare scheme.
But the Coalition cut the proportion of childcare costs funded by tax credits for low-income families from 80 to 70 per cent - costing a two-earner couple up to £1,560 a year.
Furthermore, under the troubled ‘Universal Credit’, parents will receive less help with childcare costs if they earn just below the personal tax allowance.
Now Mr Milburn’s Commission on Social Mobility and Child Poverty is demanding a rethink to show the Government is serious about tackling in-work poverty.
The former Cabinet minister wants a lower £120,000 cap on the income of dual-earner families who qualify, with the money saved switched to low-income families in work.
He told The Independent: "The Government's proposals put taxpayers' money in the wrong place.
“The Commission believes a fairer, simpler deal is needed. By making childcare more affordable, work incentives would be strengthened.”
Without action, 80 per cent of the £750m to be spent on “tax-free childcare” from next year would go to better-off families.
A Daycare Trust study last year found that North-East parents were paying up to 7.5 per cent more than a year earlier for places at nurseries and at childminders.
The weekly cost of 25 hours’ nursery care for under-twos was £95.96 in the North-East and £95.54 in Yorkshire, the organisation found.
And the North-East had the highest after-school club charges anywhere in Britain in 2012 - £55.50 for 15 hours - after a staggering 26.1 per cent leap on 2011.
But, backing his childcare scheme last year, the prime minister called it “a boost direct to the pockets of hardworking families”.