ALMOST two million UK families, 200,000 in Scotland, are to get extra help with their childcare costs under upgraded plans unveiled by David Cameron and Nick Clegg today ahead of tomorrow's Budget.
Last March, the UK Government announced a £750million plan, promoted as a "childcare revolution", to give working parents tax-free childcare worth up to £1200 per child under five with a view to extending it, over seven years, to children under 12.
Now, however, Downing Street has revealed the scheme would be increased to up to £2000 per child and extend to all children under 12 within the first year.
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The scheme, as previously announced, will begin in the autumn of 2015. It will be open to more than twice as many families as currently use the Employer Supported Childcare voucher scheme.
A No 10 source said the new upgraded scheme would still operate within the £750m budget; this was possible because of "the way it would be managed".
Downing Street stressed the measures would help parents go out to work if they wanted to and provide more security for their families, while directing extra support to those children from disadvantaged backgrounds.
Following last spring's announcement, a public consultation has enabled the Government to fine-tune the scheme so it will help, for the first time, part-time workers and those on maternity, paternity or adoption leave, as well as those starting their own business who might not meet the minimum earning requirement.
Alongside the childcare package, the Government also announced a £50m Pupil Premium to help the most disadvantaged early years' children in England, while those in the UK on Universal Credit will get 85% of childcare costs fully covered.
"Tax free childcare is an important part of our long-term economic plan. It will help millions of hard-pressed families with their childcare costs and provide financial security for the future," said the Prime Minister.
Mr Clegg, his deputy, added the childcare boost for millions of hardworking families showed the Government wanted to ensure "everyone can get on and succeed".
Meantime, political pressure continues to mount on Chancellor George Osborne to recalibrate the 40p higher rate of tax, which currently starts at about £41,000 and drags in millions of middle income Britons it never originally intended to. Critics want Mr Osborne to raise the level to nearer £50,000.
Treasury sources have denied claims Mr Osborne told Tory MPs there were "advantages" to more people paying the 40p rate as it made them feel aspirational.
But the Chancellor, who has already unveiled a "building for Britain" prospectus with a plan to build another 120,000 homes to help first-time buyers, is set to concentrate his efforts on raising the tax-free personal allowance to £10,500, which, it was stressed benefits not just the low paid but most workers.
Elsewhere, calls continued to be made for Mr Osborne to scrap the whisky duty escalator, which automatically raises tax each year, and to devolve Air Passenger Duty to the Scottish Parliament. Scottish Transport Minister Keith Brown has written to the main players in Scotland's aviation industry seeking support for the devolution of the tax.