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Attacks from all sides as child benefit cuts kick in

THE controversial cut in child benefit affecting more than one million families came into force at midnight, prompting claims the change could fuel the fire of family breakdown.

DEFENSIVE: Speaking on the BBC's Andrew Marr Show, Prime Minister David Cameron insisted the Child Benefit cuts were fair
DEFENSIVE: Speaking on the BBC's Andrew Marr Show, Prime Minister David Cameron insisted the Child Benefit cuts were fair

With a vote in the Commons tomorrow on capping other benefit rises to 1%, the issue of welfare reform is coming to the boil as the Coalition Government hits mid-term.

Labour and the SNP have criticised many of the changes, but even groups usually friendly to the Conservatives have attacked the Government.

The Institute of Economic Affairs accused it of "stumbling around in no-man's land in its attempt to reform the benefits system", and called the Child Benefit cut "probably the single most incompetent change to the benefits system since the Second World War."

The Prime Minister insisted yesterday that the cut in child benefit to better-off families was fair, and his party chairman Grant Shapps said: "I am one of the people affected. I won't quite go as far as sharing the conversation between me and my wife, but I feel the pain."

The Treasury has confirmed about 200,000 parents have opted out of claiming the benefit ahead of reforms due to come in today that mean the top 15% of earners will no longer be eligible for some or all of the cash.

But about 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 year.

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.

"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."

The Centre for Social Justice (CSJ) said the cuts risked pouring further fuel on the fire of family breakdown. Managing director Christian Guy said: "The new rules will mean that married couples where one earns over £50,000 will be unable to avoid losing some or all of their child benefit.

"Meanwhile, similar couples who are cohabiting will face unenviable choices: a severe financial penalty if they marry or breaking the law if they deny their relationship status."

The Institute for Fiscal Studies said families would end up losing as much as 65p of every extra pound they earned, making it more likely they would work less or put more into pension funds to avoid the hit.

Anne Longfield, chief executive of the charity 4Children, said: "Universal child benefit has long been recognised as a symbol of the value our society places on children.

"Cutting this support for families where someone earns over £50,000 per year seriously undermines that commitment, especially at a time when others earning similar amounts who do not have children are not being asked to contribute more."

Labour calculates that the average family stands to lose £279 under other welfare changes. Speaking before a Commons debate tomorrow, Shadow Scottish Secretary Margaret Curran said the Coalition was preparing to cut the incomes of about 261,000 families. She said: "The best way to get the welfare bill down is to get people off the dole and back to work."

The SNP condemned proposals by the Tory 2020 Group to push down benefits in the north, where the cost of living is lower than in London.

Kevin Stewart, a member of Holyrood's Welfare Reform Committee, said: "The UK is already the fourth most unequal country in the developed world. 

"To increase geographical inequalities by cutting welfare payments in 'the north' would only make the poor poorer and increase poverty in Scotland."

l The potential structure of a welfare system in an independent Scotland is to be considered by a new Scottish Government expert group. Its members will look at benefits and make recommendations about how the regime can reflect Scottish values, Deputy First Minister Nicola Sturgeon said.

"The announcement of the expert group is the first step on the journey towards creating a welfare system which will support the economy and society of an independent Scotland," she said.

Contextual targeting label: 
Families

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