Osborne to scrap child benefit for high earners

Child benefit is to be axed for higher rate taxpayers from 2013, George Osborne has announced.

The chancellor said the move would save an estimated £1bn.

He said: "It's a big decision for us, but we think it's absolutely necessary and fair given the financial situation we face."

Families earning over about £44,000 would be affected.

"It's very hard to justify taxing people on much lower incomes in order to pay the child benefit to some of the better off in our society.

"It's not a decision taken lightly, but given the scale of the debts Labour's left us with, and given they've left us with no plan and we've had to come up with proposals, we think this is fair, Osborne added.

At the moment, parents are paid £20.30 a week for the eldest child and £13.40 for subsequent children, with payments continuing until the age of 19 for those in full-time education.