Government hesitates on child benefits reform

By Oliver Hotham

The government is considering rethinking its approach to child benefits reform, amid fears the current plan would penalise families with only one earner.

The deputy prime minister confirmed this morning the government are reviewing their plan to reduce the allowances to more higher earning families.

The concession comes ahead of a Labour-led opposition day debate in the Commons to address the issue of child benefits.

Backbench Tory MPs have already threatened to vote the proposals down, citing the unfairness that, under the new plans, households in which one parent earns £42,000 a year would lose their benefits but two parents earning £80,000 would not.

Nick Clegg insisted the government was still committed to making the better off pay more in a series of media interviews this morning.

"But we're also equally accepting that there's also an issue about how you do that so you make sure you don't create unintended consequences where, say, a family with one earner gets child benefit removal when there's another family with income earners who actually collectively earn more but keep the benefit," he added.

"I've been very clear about my overwhelming … priority, and that is to give tax cuts to the vast majority of taxpayers on low incomes and on ordinary incomes by raising the point at which they start paying income tax.

Labour said no cuts to child benefits would be needed if the Treasury were to close a loophole in stamp duty on properties worth more than £1 million.

Tory MP Mark Reckless is leading the backbench calls for the bill to be watered down. He told the Daily Telegraph that in its current form the plans did not deserve Conservatives support.