30 Apr 2015

Lib Dems reveal Tory child benefit cut proposals

Lib Dem Danny Alexander says Conservative proposals in 2012 to cut child benefit and child tax credits, show where future cuts may come. The Conservatives say those plans were not backed by the PM.

Chancellor George Osborne with Lib Dem Chief Secretary to the Treasury Danny Alexander (Getty)

Mr Alexander, the chief secretary to the Treasury, has broken coalition confidentiality to reveal that in 2012 the Conservatives drew up plans including limiting child benefit and child tax credit payments to only the first two children in any family.

The Lib Dems say this would have meant a cut of up to £3,500 for a family with three children.

Speaking on Radio 4 Mr Alexander said “these are ideas that were put to me by Conservative ministers. They are obviously the sort of things Conservatives think about when they consider how to find savings in the welfare system.”

In response the Conservatives said “this set of policies was never proposed or supported by the prime minister and chancellor, and would never be proposed by the PM and chancellor.”

Speaking in Croydon the Chancellor George Osborne said “this is a three-year-old document of policy options that was commissioned by the chief secretary himself.

“We haven’t put into practice any of these options, we don’t support them. We didn’t support them then and we don’t support them now.”

The 2012 proposals, and their impacts - according to the Lib Dems:
Remove the higher rate of child benefit paid to the first child - an average cut of over £360 to every family.
Means test child benefit - cutting £1,750 for a two child middle income family.
Remove child benefits from 16-19-year-olds - a cut of over £1,000 for parents of a single child.
Limit support to two children in child benefit and child tax credit - cutting up to £3,500 from families with three children.

    The Lib Dems said that if these measures had been introduced it would have raised over £8bn. Mr Alexander added: “I’m lifting the lid now because the Conservatives are trying to con the British people by keeping their planned cuts secret until after the election.”

    The Conservatives have yet to confirm where £10bn of the £12bn planned cuts from the welfare budget will be made, prompting the Institute of Fiscal Studies (IFS) to call for more clarity about their policies.

    IFS Director Paul Johnson said on 19 March that the lack of detail was “frustrating”, adding “you’re going to have to do things like further big cuts in child benefit, or really substantial cuts to housing benefit, or significant cuts to disability benefit.”

    Benefit reforms

    The coalition has already changed the rules on child benefit for higher income families. From January 2013 for families where one or more partner had an individual income of over £50,000 a year, some or all of the benefit will be repayable.

    The latest government figures from August 2014 show that there were 7.5m families receiving child benefit. Of these, 1.2m had three or more children.