Child benefit U-turn pushes family to fore

Election countdown

The Tory threat to means-test child benefit was lifted yesterday with a pledge to raise it in line with the inflation rate for the next five years.

The proposed Family Benefit Guarantee, costing pounds 1bn, will be the centrepiece of Tory promises on the family in its election manifesto, which was endorsed by the Cabinet on Thursday for release after Easter. It was leaked to deflect attention from the row over alleged Tory sleaze.

The Tories will also pledge for the first time to raise family credit in line with inflation. The decision to inflation-proof child benefit by Peter Lilley, Secretary of State for Social Security ends the threat raised during Baroness Thatcher's period of office to means-test it.

She was prevented from taxing child benefit or limiting it to those on low incomes by a 1987 election commitment. Mr Lilley reviewed the idea, but decided it was unworkable after the introduction of separate taxation for men and women. The Tory MP Peter Bottomley led the campaign to protect child benefit from attacks on the grounds that it went to the richest families. Its supporters insisted that keeping it as a universal benefit ensured maximum take-up by those who needed it. The Tories have also taken a strategic decision that limiting it to families on low incomes would hurt their core supporters in the middle classes.

Mr Lilley challenged Labour to back the proposals. But Labour's social security spokeswoman, Harriet Harman, publishing new figures on child poverty, said: "The Tories claim that their Family Benefit Guarantee shows they are the party of the family. But this government's record on the family has been disastrous."

She said the number of children being brought up in poverty had more than tripled under the Tories - rising to nearly 4.5 million, about one in three, in families on income support and family credit in 1996 from 1.1 million, or about one in 10, in families on their predecessor benefits in 1979.

One-third of all families had to rely on means-tested benefits when they had a baby, while two-thirds of children living in poverty in Britain were being raised by lone mothers living on about pounds 100 a week. She said the Government had inflicted "a double failure" on such children, by failing to help lone mothers get work and failing to make absent fathers pay.

The Liberal Democrat spokeswoman, Liz Lynne, said: "This has more to do with political posturing than with any firm commitment to help people on benefit." She also criticised Labour for proposing ending scrapping child benefit for children staying on at school after 16 to fund means- tested help with an educational allowance for lower income families. "The Tories should now come clean on their plans for other benefits which are not automatically uprated each year by prices, such as Income Support and Disability Working Allowance."