Child Benefit Cut For High Earners May Be Reconsidered, David Cameron Signals

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Conservative Party leader David Cameron discusses the cost of living over breakfast with a family in 2008
Conservative Party leader David Cameron discusses the cost of living over breakfast with a family in 2008

David Cameron has indicated he may U-turn on plans to cut child benefits for higher earners, amid fears the policy is viewed as unfair by many voters.

The government had planned to take the benefit away from families where at least one parent earned more than around £44,000 a year. The prime minister has previously defended the measure, arguing the the better off had to contribute to helping cut the deficit.

"That does mean in a spending round you have to ask better off people to make a contribution so you can protect the most vulnerable and help them have a better life," he said when it was announced in October 2010.

But the measure has been attacked as unfair, as a family that has two parents earning below the threshold could have an overall income of around £80,000 and keep the benefit while a family where one parent earns slightly over the threshold would lose it.

However in an interview with the parliamentary House Magazine published on Friday, Cameron hinted that George Osborne may revisit the measure in this year's Budget.

"Some people say that's the unfairness of it, that you lose the child benefit if you have a higher rate taxpayer in the family. Two people below the level keep the benefit. So, there's a threshold, a cliff-edge issue," he said.

"We always said we would look at the steepness of the curve, we always said we would look at the way it's implemented and that remains the case, but again I don't want to impinge on the chancellor's Budget."

However Cameron went on to tell the magazine that he was not letting the more wealthy get away with not paying their fair share. "Now, I'm not saying for a minute that someone earning 40,000 pounds is rich," he said. "But the simple facts show that if you are earning 40,000 pounds you are earning twice as much as someone on the average wage of just over 20,000 pounds."

"If we want to make sure that everyone makes a contribution to dealing with the deficit, that's why we had to look at measures like taking child benefit away from higher rate tax payers," he added.

Labour has previously criticised the plan and said it showed the coalition was out of touch with "the squeezed middle" and "hard-working families".

Cameron's intervention is not the first time it has been suggested that the plans may be revisited, amid fears that the Conservative Party is losing support among women.

In September The Times reported that there was unhappiness among senior ministers at the measures.