The government was considering plans to end tax relief from 2011 and divert money into offering more free childcare places for two-year-olds.
But in a letter to Parliamentary Labour Party's Women's Committee joint chairs, Fiona Mactaggart MP and Roberta Blackman-Woods MP, Prime Minister Gordon Brown has confirmed the plans have been scaled down.
The Government today indicated that it intends to allow tax relief to remain for everyone on all basic rate tax, only removing the ability to claim on higher rate tax. This means that all working parents will have the same access to Childcare Vouchers, regardless of their tax status.
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