The anatomy of a political lie: ‘tax-free childcare’

Today’s announcement of childcare subsidy, up to the value of £2,000 per kid under the age of 12, is welcome news. As The Spectator argued last week, this is perhaps the smartest single move the Chancellor can make – too many highly-skilled women want to work, but cant afford to as they’d face Europe’s highest childcare fees. And then the Treasury has to spoil it all by lying about the policy. The government website has this to say:

The first thing parents need to know is that the scheme is not ‘tax-free childcare’ at all. So how on earth does the Treasury justify claiming otherwise? Its explanation is below:-

‘For every 80p you or someone else pays in, the government will top up an extra 20p This is equivalent of the tax most people pay – 20% – which gives the scheme its name, ‘tax-free’. The government will top up the account with 20% of childcare costs up to a total of £10,000 – the equivalent of up to £2,000 support per child per year.’

So for ‘most people’ the payment (and it is a payment, not a tax refund) will be the same as the income tax they pay.