Thinktank proposes cap on child benefit to cut welfare spending

http://www.theguardian.com/society/2014/jul/17/proposed-limit-of-uk-child-benefit-to-four-per-household

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Child benefit should be limited to four children per household and reduced to bring down welfare spending, according to a report from Policy Exchange. Researchers for the thinktank argued that this can be justified because the arrival of a first child tends to have the biggest impact on family finances, and say the move could save around £1bn over the course of a parliament.

Many proposals by Policy Exchange, founded by a group including ministers Michael Gove, Francis Maude and Nick Boles, have found their way into Conservative manifestos in the past.

George Osborne and David Cameron have previously examined the idea of limiting child benefit to two children put forward by Nadhim Zahawi, a Conservative MP and member of the Downing Street policy board. However, this idea was not adopted for fear of alienating parents.

Reviving the concept, Policy Exchange said the child benefit rates should continue to rise at a rate of 1% for the first and third child of a household and by 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."