'Tough but fair': Benefits row overshadows Cameron's speech

Mr Cameron last night apologised for not being upfront with voters about the need for cuts to the universal benefit in his manifesto for the May General Election.

Today, he will seek to win over the small businessmen and skilled workers who may be hit by the change, by declaring he wants to support "the doers and grafters, the inventors and entrepreneurs" and warning jobless households that they will no longer be allowed to live off other people's taxes if they are capable of working.

Suspicions that the child benefit move was rushed out without full consultation in the Cabinet were fuelled when Work and Pensions Secretary Iain Duncan Smith suggested that Chancellor George Osborne's announcement in an early-morning TV interview on Monday was prompted by pressure from the media.

In a mark of the unease among Tories at Birmingham about a possible backlash from middle-class voters, who stand to lose 2,500 a year in a three-child household if either parent earns 44,000 or more, Mr Osborne yesterday wrote to every Conservative MP explaining the rationale behind his decision.

And Mr Cameron hinted that the Government may use a planned tax break for married couples to try to soften the blow of the loss of child benefit - which hits couples where one parent stays at home harder than those where both work.

Aides said ministers had not "closed the door" on the idea of allowing a proposed transferable tax allowance for married people to apply to the higher-rate taxpayers who will lose their child benefit, as well as the basic-rate earners for whom it was originally intended.

In better news for Mr Cameron as he prepared to deliver his speech, a YouGov poll in The Sun found overwhelming support for the principle that child benefit should be withdrawn from the rich, with 83% saying it should be scrapped for those on "higher incomes", against just 15% who disagreed.

However, 46% said it was unfair that a couple each earning 30,000 will continue to receive the 20-a-week benefit while a single-income household on 44,000 will lose it, against 41% who said it was "not ideal but acceptable".

Mr Hague told ITV1's Daybreak this morning that changing the measure so it applied to household rather than individual incomes would mean "a whole new complex change to the tax system and means-testing child benefit".

He added: "Really, it is tough but it is fair... I think it is right to do what we are embarking on."

Today's Sun poll showed that "the overwhelming majority of people agree that higher-rate taxpayers do have to play their part in this", said the Foreign Secretary.

"In this case it does mean reducing child benefit, but so much of the population has to contribute to bringing down this huge budget deficit that we have been left. We can't do that without making some reductions and I think people do understand that."

On average, each household containing a higher-rate taxpayer was 50% better off than one with two people earning salaries under the 44,000 threshold, he said.

The Prime Minister said last night that he was "sorry" not to have warned voters that child benefit would be cut, telling ITV News: "In the election campaign, both the Conservatives and the Liberal Democrats said there are going to be cuts, there are going to be difficult cuts and we outlined some of those cuts.

"We did not outline all of those cuts, we did not know exactly the situation we were going to inherit. But, yes, I acknowledge this was not in our manifesto. Of course I'm sorry about that."

Mr Duncan Smith dismissed the idea that the middle classes should expect universal benefits in return for their tax, saying: "The middle class should buy into the idea of a unified society and one that looks after the worst-off in society, full stop."

Asked last night at a fringe event organised by The Observer why the announcement came when it did, Mr Duncan Smith said it was made in response to journalists' interest in the Government's plans for welfare reform.

"I think the reality is you were all spending your time just dwelling on this the whole time," he told interviewer Andrew Rawnsley. "The reality is there was a sort of interest and that was why it was done."

And suspicions that Mr Osborne's announcement was made without full consultation with the Cabinet were bolstered when Home Secretary Theresa May dodged repeated questions on BBC2's Newsnight about when she learned of it, insisting the decision was "a matter for the Chancellor and the Secretary of State for Work and Pensions".

Senior backbencher David Davis, who has criticised the way the announcement was made, told the programme that a "frontbench rethink" was likely, adding: "When they work through the consequences of what they're proposing, they might think 'There's a better way of doing it'."

In today's speech, Mr Cameron will justify the raid on child benefit by insisting that it is "fair that those with broader shoulders should bear a greater load".

While accepting that the Government's goal of eliminating the structural deficit within five years will be "difficult", he will insist that the 7% annual savings it implies for some Whitehall departments is no more than many businesses have done in recent years.

And he will try to claim the mantle of "fairness" for the Government, arguing that, while Labour had simply thrown money at the poor, the coalition will offer them the chance to get out of poverty.

"Fairness means supporting people out of poverty, not trapping them in dependency," he will say.

"So we will make a bold choice. For too long, we have measured success in tackling poverty by the size of the cheque we give people. We say, let's measure our success by the chance we give."

And in a warning to those living on benefits, he will add: "Fairness isn't just about who gets help from the state. The other part of the equation is who gives that help, through their taxes.

"Taking more money from the man who goes out to work long hours each day so the family next door can go on living a life on benefits without working - is that fair?

"Fairness means giving people what they deserve, and what people deserve depends on how they behave.

"If you really can't work, we'll look after you. But if you can work but refuse to work, we will not let you live off the hard work of others."

Mr Cameron will say that the Government needs to "get behind" the wealth-creators whose hard work will get the British economy back on track, rejecting the "laissez-faire" approach of allowing them to sink or swim on their own.

"I don't believe in laissez-faire," he will say. "Government has a role not just to fire up ambition but to help give it flight."

And he will tell the banks: "There's another way we are getting behind business - by sorting out the banks. Taxpayers bailed you out. Now it's time for you to repay the favour and start lending to Britain's small businesses again."