Britain ends child welfare for wealthier families
BRITAIN'S chancellor of the exchequer, George Osborne, said he would cut welfare cheques for more than one million families yesterday as he stepped up spending reductions to help narrow the UK's record budget deficit.
The wealthiest families will be deprived of a universal benefit for children, while households where no one works will have payments curtailed so they receive no more income than the average working family. The plans may save as much as £2bn (€2.3bn) by 2013.
"No more open-ended chequebook," Mr Osborne said at the Conservative Party's annual conference yesterday in Birmingham. "These days we've really got to focus the resources where they are most needed."
The conference is designed to galvanise support for an austerity plan that aims to deliver the biggest squeeze on government spending since World War Two. Mr Osborne has two weeks to complete plans showing how ministers will eradicate most of the £156bn (€180bn) deficit by 2015.
The cutback in child benefit will hit 1.2 million families with at least one parent earning more than about £44,000 (€50,000) from 2013. Child benefit is worth £1,055 (€1,220) a year for the first child and £696 (€805) a year for each subsequent child. It costs £12bn (€14bn) a year and is paid to 7.8 million families, according to UK treasury figures.
The decision is a shift for Mr Osborne who, when delivering his emergency budget in June, defended keeping child benefit as a universal payment without means tests. It also risks angering wealthier voters as the opposition Labour Party moves ahead in some polls.
Yvette Cooper, the former work and pensions secretary who now speaks for Labour on welfare, attacked the move, saying it penalised families with children.
The savings from trimming benefits to workless families would be "hundreds of millions" of pounds, according to a briefing document released by the Conservative Party. Tens of thousands of families will have welfare capped at £500 (€578) a week, though the disabled will be excluded.
Ministers intend to replace the current system of welfare and tax credits, in which people on low incomes or without jobs can claim different benefits to cover specific needs, with a single-payment programme.