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Corkers
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U-turns

Child Benefit

  • Osborne buries universal child benefit – New Statesman, 4 Oct 2010
  • Osborne makes botched job of his Child Benefit u-turn – The Daily Telegraph, 21 Mar 2012

At the Conservative Party Conference in October 2010, George Osborne announced the end of universal child benefit, stating that higher-rate taxpayers would become ineligible for it from 2013 onwards.

The New Statesman reported:

This means that all households in which at least one person earns £44,000 or more will lose out, although a family with two adults earning, say, £40,000 a year will not.

It’s a big political gamble for the Tories and it amounts to an average tax increase of nearly £2,000 a year (£1,000 for the first child and £700 for each subsequent child) for the families affected.

One and a half years later, the Chancellor u-turned on his policy. As The Daily Telegraph reports:

Osborne has been forced to perform a major u-turn in his budget, lifting the amount at which Child Benefit starts to be removed to £50,000. From there it will taper away. Above £60,000 it is removed entirely.

This concession is welcome as far as it goes. It is a U-turn. But unfortunately the chancellor has made a botched job of his manoeuvre.

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