THE BRITISH government is preparing to offer concessions to married couples as fury erupted over a decision to cut £1 billion (€1.15 billion) in child benefits from 2013, which would disproportionately affect families where one partner stays at home to mind children.
Under chancellor of the exchequer George Osborne’s plan, one-income families with more than £44,000 a year would lose benefits from 2013. But families with two earners would continue to be eligible, up until they earned more than £88,000 jointly.
Prime minister David Cameron carried out a flurry of radio and television interviews on the eve of his main address to the Conservative party conference, where he was pressured about the decision to cut a benefit the Conservatives said they would do everything to protect when in opposition.
Hinting that married couples would get an extra tax allowance partially to compensate them for the loss of child benefit, Mr Cameron said: “We would like to do it in this parliament, but I hope you will all bear with me as I try and announce one policy at a time. The question I have to ask as we deal with this appalling mess left by Labour is what is fair in terms of making everyone make a contribution, asking everyone to give a bit, but asking those who are relatively better off to make bigger a contribution.”
The Conservative manifesto pledged to introduce a yearly £150 tax break for basic-rate taxpayers. But the prime minister is now hinting it could be extended to higher earners, while couples – taxed separately – could be allowed to share tax allowances.
In his speech to conference today Mr Cameron will seek to generate support for the government’s welfare reforms, by saying: “Taking money from the man who goes out to work long hours each day so the family next door can go on living a life on benefits without working – is that fair?
“Fairness means giving people what they deserve and what people deserve depends on how they behave.”
MPs gathered for the Birmingham conference expressed concern at Mr Osborne’s move, fearing that it could cost the party votes in critical middle England constituencies.
Moreover, even Mr Osborne’s ministerial colleagues seemed less than enamoured with the controversial idea.
Privately, one minister, who claimed that there had been little if any discussion at the cabinet, said: “It’s typical treasury team stuff. George just does his own thing without discussing it because he thinks he doesn’t need to. But sometimes it turns out he’s not as clever as he thinks he is.”
David Davis, who lost out in 2005 to Mr Cameron for the leadership, said the change was “an accidental piece of social policy” that would encourage wives, or mothers, to go out to work to make up for the loss of the benefits, which are worth £2,500 for couples with three children.
Newly-elected Portsmouth MP Penny Mordaunt said it had been “poorly presented”, while another, Nick de Bois, said more work should have been done in an attempt to “correct some of the unfairness” in the plan before it was announced.
A final decision was not made by Mr Osborne until last weekend, it appears. The scale of the political controversy was illustrated yesterday when the chancellor wrote to all government MPs offering to meet them to hear their concerns.
However, he insisted that he would have had to means-test every family if he was to make changes in any other way.
