Osborne insists child benefit cut is fair

The Chancellor was challenged in the Commons by Labour shadow Ed Balls, who said the plan would create a situation where a two-income family earning £84,000 would receive the benefit while a single-earner family on £43,000 would not.

The exchange came as speculation raged over whether Mr Osborne will use his Budget to water down the child benefit plan or to reduce the 50p income tax rate on earnings over £150,000.

Business Secretary Vince Cable said there was an “understanding” within Government that if the 50p rate was scrapped, it would be replaced with a levy on wealth.

Mr Osborne declined to reveal details of his Budget in his final appearance at Treasury questions in the Commons before the March 21 statement.