CHANCELLOR George Osborne has quashed rumours that the Government’s planned child benefit cut could be softened.
Mr Osborne – speaking during a visit to Leeds yesterday – said the controversial proposal to scrap child benefit for higher rate taxpayers would go ahead.
He continued to insist that it was unfair for low earning families to contribute to benefits of those earning as much as £100,000 a year.
The policy will end the benefit for any household with a parent earning above the 40 per cent tax threshold – currently about £43,000. However the move has been criticised for unfairly penalising single earner families, as a couple both earning just under £43,000 a year each would keep the benefit.
The Government had appeared to backtrack on the plans as first David Cameron acknowledged the potential “unfairness” before Culture Secretary Jeremy Hunt said ministers were looking at ways to improve the plan and make it “fairer”.
However Mr Osborne insisted that he stood by the principle of the policy.
“We are very clear that it is fair that those who are better off in our society make a contribution to the saving of money we need to make to pay down the debts so we will be removing child benefit from higher rate taxpayers,” he said. “We haven’t set out how we are going to implement that and we are going to do that in the next few months but the principle that it is not fair to ask someone who is earning say £20,000 or £25,000 to pay for someone who is on £80,000 or £100,000 to get child benefit is one that I think is very important.”
In an interview with Parliament’s The House magazine, Mr Cameron accepted the policy was seen as unfair by some people and that the changes would create a “cliff-edge” effect for some families.
“We always said we would look at the steepness of the curve, we always said we would look at the way it’s implemented and that remains the case,” he said.
Shadow Treasury Minister Chris Leslie said: “We have repeatedly warned that the Government’s current plans to cut child benefit are unfair and highly bureaucratic.
“These ill-thought-through plans are due to hit families in less than 12 months’ time, so David Cameron and George Osborne urgently need to come up with some new proposals.”