Child Benefit 'Rethink' For Osborne

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George Osborne is poised to row back on plans to strip higher earners of child benefit, it was reported on Sunday.
George Osborne is poised to row back on plans to strip higher earners of child benefit, it was reported on Sunday.

Chancellor George Osborne is poised to row back on plans to strip higher earners of child benefit, it was reported on Sunday.

From January 2013 parents earning more than £42,745 a year - the 40% tax rate threshold - are set to lose their payments.

But the move has proved unpopular, sparking claims that lone-parents and single-earner families are being penalised. A mother and father earning £40,000 each would keep their payments while a single parent on £43,000 would lose out.

Treasury officials are now looking at raising the eligibility cut-off point amid fears of a backlash from middle-class voters, according to The Daily Telegraph.

"The government has been clear that it is fair to ask those who are better off in our society to make a contribution to paying down the debts that we have built up over the last decade in Britain," aides said.

"It is not fair to ask someone earning £20,000 to pay for the Child Benefit that goes to someone earning £80,000 or £100,000. We will set out details of how we will implement this in the coming months."

It comes as Labour attempts to ramp up pressure on the issue by using an Opposition day debate in the House of Commons on Wednesday to call for an urgent review of the reforms.

Shadow Chancellor Ed Balls claims working tax credits could be protected if the Treasury closed a stamp duty tax avoidance loophole on properties worth more than £1 million.

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