Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of raising the upper limit of the tax-free childcare allowance in the context of rising nursery fees.

Tax-Free Childcare (TFC) provides financial support for working parents with their childcare costs. For every £8 parents pay into their childcare account, the Government adds £2 up to a maximum of £2,000 in top up per year for each child up to age 11 and up to £4,000 per disabled child until they are 17.

The Government recognises the importance of supporting parents with the costs of childcare and continues to support families with a range of other childcare offers. At Spring Budget 2023, the Government announced that it will expand the free childcare hours offer, so that eligible working parents in England will be able to access 30 hours of free childcare per week for 38 weeks per year from when their child is 9 months old, to when they start school. Parents who are not eligible for 30 hours may still be able to access other offers: all three- and four-year-olds can access 15 hours of free childcare per week, regardless of circumstance; and two-year-olds who meet certain social and economic criteria can receive 15 free hours per week. This additional investment at Spring Budget will bring total Government support for childcare to over £10bn by 2027/28. In addition, parents working on Universal Credit claimants are able to claim up to 85 per cent of their childcare costs At Spring Budget, the government announced it would increase the Universal Credit childcare maximum amounts to £951 for 1 child and £1,630 for 2 children, as well as ensuring parents moving into work or increasing their hours have support with childcare costs upfront when they need it.