Proposed cap on child benefit to cut welfare spending

  • Policy Exchange are claiming that by limiting child benefit to four children per household could save around £1bn per parliament.

    A report by Policy Exchange says that child benefit should be limited to four children per household and reduced to bring down welfare spending. Researchers for the thinktank argue that this can be justified due to the arrival of a first child tends to have the biggest impact on family finances and believe this move could save around £1bn over the course of a parliament, reports the Guardian. Money Notes 2

    The idea has previously been examined by George Osborne and David Cameron and revived by Policy Exchange who have said that child benefit rates should continue to rise at a rate 1% for the first and third child of a household and 2% for the second child for the rest of the next parliament. The weekly payment for a fourth child should remain at next year's level and should be scrapped altogether for fifth and subsequent children born after April 2016.

    Policy Exchange said a poll it commissioned from YouGov found more than two-thirds of people would support capping child benefit at four children. It said there was widespread support among Conservative voters at 83%, while the majority of Labour voters at 56% and Liberal Democrat voters at 63% were also in favour of a cap.

    Steve Hughes, the author of the report, said: "The chancellor has suggested that annual welfare savings of £12bn will have to be found to avoid further and faster cuts to departmental budgets. Choosing where this money comes from is not easy, but with such high levels of public support, capping child benefit at four children and redesigning payment levels offers a very real opportunity to generate some much needed savings in the fairest way possible."

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