Miliband brands child benefit restriction a ‘shambles’

Labour leader Ed Miliband yesterday used his first Commons showdown with David Cameron to brand the decision to restrict child benefit a “shambles”.

Making his debut at the despatch box for Prime Minister’s Questions he told Mr Cameron ending child benefit for higher rate taxpayers was not “fair and reasonable” because it was based on individual, not household, income.

The Prime Minister accused Mr Miliband, who was elected Labour leader last month, of having no plan to tackle the budget deficit and labelled his opposition to the child benefit move “political positioning”.

At the Tory conference last week Chancellor George Osborne announced that from 2013 taxpayers earning more than around £44,000 will no longer receive the benefit.

Mr Miliband said Mr Cameron’s “own benches and the country at large” have concerns about the plan. He asked: “How many families where one parent stays at home will be affected by the changes that you have proposed to child benefit?”

Mr Cameron said 15 per cent of taxpayers pay the higher rate and “the decision we have taken is to say that child benefit shouldn’t be received by families where there is a higher rate taxpayer”.

He added: “This is a difficult choice because as we deal with the deficit we do have to ask better-off people to bear their share of the burden. The fact is that today we spend £1 billion giving money through child benefit to relatively better-off homes.”

He challenged Mr Miliband: “We think that has to change and I have to ask you why you think that’s not the case.”

The new Opposition leader responded: “I may be new to this game but I think I ask the questions and you should answer them.”

Mr Miliband said: “By my reckoning there are hundreds of thousands of families where one parent stays at home, there are hundreds of thousands of families and the question they are asking is this: why should a family on £45,000 where one person stays at home lose their child benefit, £1,000, £2,000, £3,000 a year, but a family on £80,000 where both partners in a couple are working should keep their child benefit?

“That doesn’t strike people as fair, it doesn’t strike me as fair, does it strike you as fair?”

Mr Cameron said it was fair to ask “better off people to make a contribution to reduce the deficit”.

He told Mr Miliband: “There are thousands of people in your constituency earning one-sixth of what you earn. Through their taxes they will be paying for your child benefit. Is that really fair?”

Mr Miliband said it was “nought out of two for straight answers” from the Prime Minister. The Labour leader was drowned out after telling Mr Cameron “I’m not defending the rich” and Speaker John Bercow was forced to intervene to call for order.

Mr Miliband continued: “I’m defending the deputy head teacher in a primary school, I’m defending the police inspector, all of who are asking a simple question.”

He quoted Mr Cameron at an event on the election campaign trail as saying “I like child benefit, I wouldn’t change child benefit, I wouldn’t means test it, I don’t think that’s a good idea.”

Mr Miliband said: “I agree with the Prime Minister, why doesn’t he?”

Mr Cameron said Labour had left the budget deficit and Mr Miliband had “no proposals to deal with it”.

He told Mr Miliband: “You have got to face up to the truth. We have got a big budget deficit, you have to ask better-off people to make their contribution.

“We say higher earners shouldn’t get child benefit. Their child benefit is being paid for by some of the poorest people in the country and it’s about time you protected them.”

Mr Miliband hit back: “I really want you to face up to the scale of the changes you are proposing.”

A family on £33,000 after tax with three children would lose £2,500 as a result of the changes, he said, the equivalent of 6p on the basic rate of income tax.

“That is an enormous loss that you are inflicting on a particular group in the population.

“If you want to take people with you on deficit reduction you have got to show that your changes are fair and reasonable.

“I come back to this point: I don’t believe your changes are fair and reasonable. Do you?”

Mr Cameron told him: “I don’t think its fair for the poorest constituents in your constituency to contribute to your child benefits. That is what you are asking them to do.”

He quoted Mr Miliband as saying: “Whoever is the Labour leader will, by the time of the spending review, have to show they have an alternative plan.”