Squeezed again

However, it shows the extent to which Britain's finances are broken if the Tories are having to end the previously sacrosanct principle of universal benefits for all. Could free TV licences for well-off pensioners be next on the hit list?

In many respects, it demonstrates the coalition Government's social conscience that Chancellor George Osborne is implementing this policy in a way that is likely to alienate traditional Tory supporters.

Frankly, he had little alternative. In these austere times, it cannot be right that the wealthy can claim such entitlements when the Government is trying, with political courage and foresight, to overhaul the welfare system from top to bottom in order to introduce other changes so benefit claimants cannot derive more money from the State than working families.

The difficulty is the policy's implementation. Under Mr Osborne's plans, a single parent receiving more than the threshold of 44,000 will have the benefit removed. However, families with a combined income of nearly 88,000 will still receive child benefit if neither parent earns more than the threshold limit.

It is an anomaly that Mr Osborne is going to have to address as individual families try and define the meaning of "welloff" in the current economic climate. One option would be for child benefit to be treated, by the tax authorities, as income – and that this payment be taxed according to an individual's earnings.

On this basis, the wealthy would pay more than those on the breadline – and help the Chancellor to achieve his objective of saving 1bn a year.