PM: child benefit cut a fair way to save £2bn
Prime Minister David Cameron yesterday defended controversial cuts to child benefit payments that came into effect at midnight, insisting the reforms are “fundamentally fair”.
The Prime Minister said the move, which will see families with one earner on more than £50,000 lose some or all of the payment while households with two parents with salaries just under the trigger keep theirs, was the “right approach”.
He said: “I'm not saying those people are rich but I think it is right that they make a contribution.
“This will raise £2bn a year. If we don't raise that £2bn from that group of people, the better off 15% in the country, we would have to find someone else to take it from.”
He added: “I think people see it as fundamentally fair that if there is someone in the household earning over £60,000 you don't get child benefit.”
Around 800,000 families are known to be |affected by the reforms with a further 400,000 potentially hit through changes in income over the next financial year.
The Treasury has confirmed around 200,000 parents have opted out of claiming the benefit ahead of the reforms that mean the top 15% of earners will no longer be eligible to claim some or all of the cash.
HM Revenue and Customs chief executive Lin Homer said twice as many families had already opted out of receiving the payment than had been expected.
Labour has warned the new system is complicated and is |intrinsically unfair.
Shadow Treasury minister Chris Leslie said: “These figures mean up to a million families now face having all their child benefit clawed back through complicated self-assessment tax returns at the end of the year.
“This is a costly administrative nightmare that could also lead to family rows as couples decide who takes the financial hit.
“And it's unfair too, because single earner families on £50,000 will have their child benefit cut while some couples earning as much as £100,000 keep all of theirs and millionaires actually get a tax cut.
“With every passing day it's clearer and clearer that David Cameron and George Osborne |totally failed to think this policy through.”
The Centre for Social Justice warned the cuts risked “pouring further fuel on the fire” of family breakdown.
Managing director Christian Guy said: “UK family breakdown is spiralling out of control — the chaotic child benefit reforms risk pouring further fuel on the fire.”