Budget 2012: Treasury source says child benefit cut 'hugely popular'

 

Nick Clegg says asking people who earn much more money than others to give up benefits is fair

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Changes to child benefit are "hugely popular" with most voters, a Treasury source has told the BBC.

The government will remove the benefit from households in which someone earns more than £42,475 in January 2013.

The source said only 15% of taxpayers would be hit, and polling suggested 77% of voters backed the move.

Downing Street has rejected Labour's call for the "really unfair" plan to be dropped, but says changes may be made to how the new policy is implemented.

Deputy Prime Minister Nick Clegg had earlier told the BBC that the government would "look at how you administer the removal of child benefit from upper-rate earners".

Mr Clegg acknowledged it was an anomaly that a family with a single earner taking home more than £42,475 would lose child benefit but a couple each earning slightly less than the top rate could together take home £80,000 and keep the benefit.

'Speculation'

He said: "What you do when you create these cut-offs is you create some sort of anomalies... there's a specific issue about how you administer the removal of child benefit from upper-rate earners and we've always said we will look at exactly the way that that is administered."

The Daily Telegraph reports the cut-off point might be raised to £50,000, but Mr Clegg said no final decision had been made.

He suggested details would be announced in the Budget on 21 March - adding that his priority was a rise in the threshold at which people started paying tax.

A Treasury source described the latest claims of a government rethink over child benefit as "speculation".

He said: "We have not said how we will implement it (child benefit) but will do in due course."

In January, Mr Cameron gave the first hint of a government rethink when he warned of the "cliff edge" some families might face with the removal of child benefit for all top-rate taxpayers.

Labour raised the planned child benefit cut during a Commons debate.

Shadow chief secretary to the Treasury Rachel Reeves accused ministers of showing a "lack of competence and care" by introducing "crude" changes.

She said: "We urge the government to review and rectify the pressure they are piling on to families, already under huge strain."

Treasury minister David Gauke replied that the child benefit cut for higher earners would redirect money to those "who need it the most".

He said: "I fully understand that child benefit is a vital income boost to parental income for millions of families across the country.

"But at the same time it comes as a substantial cost to the Exchequer, making up around of 7% of total social security and tax credit spending each year, including payments of over £2bn a year in child benefit to higher rate taxpayers."

Labour says it wants to keep child benefit for all, but adds that it cannot pledge to reinstate it in the future because it would depend on the state of the economy at the time the party came into government.

The Treasury has previously said the child benefit changes would save £2.4bn in 2013-14 and £2.5bn in 2014-15.

 

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  • rate this
    +3

    Comment number 862.

    812 Toxictel: I thought the same - I have actually heard conversations among fairly recently arrived 'immigrants' gloating over how much CB & other benefits are available to them, inc for kids back home! Can't be right, can it??

  • rate this
    +2

    Comment number 861.

    why should someone who went to university and got a well paid job get punished and not receive CB when someone who chooses to sit on their bums all day and keep having children still get it. It should be limited to two children and everyone should get it no matter of wage as this as always happened before..

  • rate this
    +6

    Comment number 860.

    What is getting me hot under the collar is not the proposal to stop child benefit to high earners but that it should be assessed on joint income not just on the highest earner, it is definately not fair for a single parent earning just above the limit to lose the benefit but for two parents who both earn just below it, but their joint income exceeds it, to keep it. Wake up Tories

  • rate this
    0

    Comment number 859.

    I would like to know who Nick Clegg asked, maybe it was his fellow lords members who earn over £100k and didn't even relies that they received this money! I heavily rely on my child benefits to pay towards childcare, nappies and baby food which keeps on increasing in price. Having a child will soon only be possible for the extremely well off and people who are on benefits.

  • rate this
    -2

    Comment number 858.

    I earn £43K and my wife works on a Saturday while I look after our 2 sons so we can afford to live. Below inflation pay rises make it harder and harder to make ends meet especially living in Greater London. To lose the Child Benefit we receive for our 2 children would be crippling. It will have a direct impact on the standard of living for our 2 sons and can only make them suffer in the future.

  • rate this
    -1

    Comment number 857.

    Tto Helo Thar, I presume that you will be disclaiming your state pension, after all, if you can't afford to get old then surely you shouldn't be allowed to? Logan's Run anyone?
    I have two children, one of which has some very severe eating allergies. As a result, my wife has had to give up a £30k a year job to look after him. I, however, earn over £60k. Should we lose the child benefit?

  • rate this
    0

    Comment number 856.

    The government should look at the benefit fraudsters on council estates the fathers swilling beer and taking drugs, while the mothers baby factories popping out as many kids they can live off the benefits instead of working for money. This government should adopt the same benefit system China has state benefit for one child and one child only, have anymore and you have to support them yourself.

  • rate this
    +1

    Comment number 855.

    Nick Clegg needs to start concentrating on the real issues rather than something which by his own admission "only affects 15% of taxpayers". Let's drop populist political arguments and actually crack child benefit for people who are giving birth to children without financial means. Needy should be assisted fully on first child, second at a staggered rate, and none thereafter.

  • rate this
    +1

    Comment number 854.

    I agree that any changes must be simple to administer or any savings are lost to means-testing bureaucracy. However, paying Child Benefit for the first two children only, and not any third child born after a certain date, would be reasonably simple to administer. As long as people know the date, they will understand that when they have a third child no Child Benefit will be paid.

  • rate this
    +4

    Comment number 853.

    822 You seem extremely sanctimonious and extraordinarily poorly informed. Higher rate taxpayers contribution infinitely more than standard rate payers, in fact many standard rate payers who take nothing back do, there is absolutely no question of lower rate tax payer subsiding higher rate. What "needs to stop" is your smug, blinkered, holier than thou lecturing.

  • rate this
    +3

    Comment number 852.

    824.LALondoner
    ....indeed...my flatmate returned home from the credit union a few days ago to tell me that two well dressed ladies in front of him at the desk were asking about taking out loans based on their child benefit as income. Now, correct me if I am wrong, but child benefit is for the child right...now to subsidise mum who has frittered the rent money on bling shoes!

  • rate this
    0

    Comment number 851.

    Find it almost sad that some are using the old "if you can't afford to have kids, don't" argument. That may be the case where people are unemployed, but circumstances change and it's like saying "you've made your bed" to thousands of hard working people (at all levels in the pay scale) who are struggling to make ends meet with pay freezes and inflation. Oh for the gift of foresight!

  • rate this
    0

    Comment number 850.

    On £75k, you pay £25k pa in income tax. On £35k pa you pay £5k pa. By my reckoning the £75k person would have to have 27 kids before they were subsidized by the childless £35k worker. Even then, they would have 27 offspring who would go on to pay taxes and contribute to society and pay for the welfare of the childless.

  • rate this
    0

    Comment number 849.

    "816.BadlyPackedKebab
    Whether it's your first or fifth relationship, if you can only afford to have more than 2 children because of CB and other handouts then maybe you need to think again !!"

    So a couple, who happen to have 2 children each, a widow and a widower, should lose CB for 2 children if they decide to live together? That's penalizing them for their partners dying!

  • Comment number 848.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    0

    Comment number 847.

    Isn't it strange in countries like Norway, Sweden and Denmark that benefits are exactly that, there to assist families and the out of work in a manner that retains respect and prevents them from falling into poverty. Here, thanks to Nick and Dave, they are back to being social pariahs. Dropping the benefit is popular with the government alone, they are utterly out of touch with reality.

  • rate this
    +15

    Comment number 846.

    Total of all benefits received by a person should never be more than the minimum wage, otherwise its not fair on those who work.

  • rate this
    +1

    Comment number 845.

    It's all very well to say "Things aren't affordable now so something must be done".

    There is still a massive gap between the taxable revenue and that collected. Some estimates place this shortfall at more than £70 billion, with just under £50bn being achievable. This government needs to focus on the tax evaders much more than it has done so far, not arbitrarily squeeze social benefits.

  • rate this
    -1

    Comment number 844.

    Would Clegg and his boss like to do something even more popular and scrap the current plans to move towards privatising the NHS?

  • rate this
    0

    Comment number 843.

    Here's a suggestion for all those who want to stop payment of child benefit. You stop paying your taxes towards child benefit and I, and later my children when grown, will stop paying towards your state pension. State welfare is about all of us paying something in to help all of us at the different stages of our lives.

 

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