Blair sounds warning over child benefit

The clearest hint so far that Labour will end universal child benefit payments for wealthy families was given last night by Tony Blair, the Labour leader.

Mr Blair said he did not believe anyone disputed "that those earning large sums of money don't really need to have child benefit". It raises the prospect of a Labour government reintroducing means- testing.

Mr Blair's remarks in an interview for Today newspaper are certain to be used as ammunition by the Government to deflect attacks for its own review of spending on the welfare state. Kenneth Clarke, the Chancellor, recently renewed the Tory pledge to keep child benefit as a universal benefit.

Defenders of child benefit, pounds 10.45 a week for the first child and pounds 8.45 per week for others, insist that making it available to all, regardless of income, is the best way of ensuring high uptake of the benefit, particularly for needy families. It costs a total pounds 6.1bn for 12.6 million children. Labour's social justice commission recommended taxing it for the better off.

Mr Blair said: "The problem there often is if you means-test, you can end up either deliberately or by accident losing the child benefit from families that genuinely do need it. So that's the problem that needs to be looked at.

"I don't think that anyone disputes that those earning large sums of money don't really need to have child benefit."

He also confirmed that Labour was looking at ways of offering a minimal state pension guarantee and combining public and private pensions as recommended by the Labour commission which reviewed welfare payments.

"That is a recognition in a sense that there is bound to be a bigger element of private pensions in the long term, but try to deal with it in a way that's fair and just and isn't going to end up with pensioners living in poverty," he said.