Make nurseries exempt from VAT and business rates to boost wages, say MPs

Committee also says government has more work to do to tackle structural problems in early years childcare

Ministers should remove business rates and VAT from nurseries so that they are able to pay their staff more, a group of MPs have recommended.

In the spring budget, Jeremy Hunt pledged to reform the childcare system, including by offering parents of children aged nine months to three years 30 hours a week of free childcare in term-time, which was expected to cost 4bn. The government claimed that it would reduce childcare costs for a family by almost 60%.