Question to the HM Treasury:

To ask the Chancellor for the Exchequer, what assessment he has made of the potential merits of increasing the tax-free childcare allowance, in the the context of increases in the cost of living.

Tax-Free Childcare 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 £2,000 Tax-Free Childcare top up has been set at this level because the Government believes it strikes the right balance between helping parents with their childcare costs, and managing the public finances in a responsible way.

The Government is committed to supporting parents with their childcare costs. 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. Through this expansion, the government will be more than doubling its spend on free hours.