UK Politics

Labour 'confused and weak' over child benefit cuts says Cameron

Media captionThe BBC's Carole Walker: "We are seeing some glimpses of what Labour's overall economic policy might be"

David Cameron has accused Ed Miliband of "complete weakness" over welfare after it emerged Labour would not reverse cuts to child benefit.

Labour criticised the decision to axe benefits for higher rate taxpayers but its leadership now believes it could not afford the £1.8bn to reverse them.

The prime minister said Mr Miliband had condemned the plans "in the strongest terms" when they were outlined in 2010.

Labour says the state of the economy means spending must be controlled.

When the government decided to cut child benefits for higher-rate taxpayers - which was later changed to those earning at least £50,000 - Labour attacked the move as unfair and said it proved the government was out of touch with hard-working families.

Economic credibility

But BBC political editor Nick Robinson says some critics are likely to see this as more evidence that Labour has abandoned its support for so-called universal benefits - those paid to all regardless of their income.

At Prime Minister's Questions in the Commons, Mr Cameron repeatedly challenged his opposite number to set out his party's position on child benefit and say whether his party now backed the coalition's changes.

Mr Cameron said that in Mr Miliband's first Commons appearance as opposition leader in 2010, he had "totally condemned and attacked in the strongest possible terms what now turns out to be Labour Party policy".

There was "total and utter confusion" about Labour's position on child benefit, Mr Cameron said, adding that "on the economy, there are weak, divided and they are the same old Labour".

Mr Miliband chose not to respond to Mr Cameron's point, instead focusing on what he said was the crisis in accident and emergency departments in the NHS, saying the prime minister was "complacent and out of touch".

The decision not to reverse the restrictions on child benefit is being seen as a further sign that Labour is trying to restore its economic credibility by proving it has the will to curb spending.

Speaking on the BBC's Daily Politics, shadow Scottish secretary Margaret Curran said Labour would "prefer universal benefits to be universal" but, if elected in 2015, it would not be able to change everything the coalition government had done and would have to decide what its priorities were.

A Labour source said Mr Balls had made clear the party must "start planning for a tough inheritance because of this government's economic failure".

In a speech on Thursday, Mr Miliband will also declare his support in principle for an idea first suggested by Chancellor George Osborne - a cap on that part of the benefits bill which is not triggered simply by a rise in unemployment.

Spending power

The UK Independence Party said there was a case for reversing the government's restrictions on child benefit, describing them as "illogical, ill thought out and grossly unfair".

"We are contemplating reinstating it because it is a universal benefit to support families and children," Carol Lovatt, the party's children and families adviser said, adding a decision would be made at a meeting of its National Executive Committee in July.

The coalition's initial plan to end child benefit for all higher-rate taxpayers would, it is estimated, have saved £2.3bn a year. The Treasury's £1.8bn figure is based on the decision to set the threshold at annual earnings of £50,000 instead.

Meanwhile, a study by the Institute for Fiscal Studies has suggested that the average middle-income family in Britain is likely to be nearly £1,800 a year worse-off by 2015.

Families with two children will see a fall of £34 in their weekly incomes, after adjusting for inflation. A childless couple are likely to lose £1,248 a year, or £24 a week, it said on Tuesday.

The IFS also said that over the next three years, less well-off families would be hit harder than those with higher incomes. The cuts in spending power were down to incomes failing to keep pace with inflation and changes to the benefits system, it added.

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