Brown defiant over child benefit cut

The battle over the future of the Welfare State under Labour was intensified last night as Gordon Brown hit back at his party critics with a warning that "the status quo is not an option" for the review of child benefit.

The Shadow Chancellor issued a clear message that "hard choices" over child benefit for children aged 16-18 would have to be taken, and he appeared to clash with Robin Cook, the Shadow Foreign Secretary, who insisted that its future was still under review.

At the heart of Mr Brown's remarks was a message to the party that he and Tony Blair are sticking by the threat to take away child benefit from high earners to pay for a guarantee of income to persuade the children of low and middle earners to stay on at school or college. Mr Brown, in an article in today's Independent, says: "Making sure every young person has a stake in education and employment demands a national crusade for change in which tough choices will have to be made so that we use our resources efficiently and equitably."

Senior Labour sources made it clear Mr Blair was backing his Shadow Chancellor, in spite of rumblings from colleagues who were dismayed at the threat to child benefit for those over 16. The details have yet to be agreed, but the leadership stamped on reports that the left had secured a victory over demands for unemployment benefit to be restored from 6 to 12 months' entitlement.

Chris Smith, the party's social security spokesman, will today confirm the direction being taken by Mr Brown. Mr Smith will say Labour must break down poverty and employment traps, in which people are better off on benefits than in work. "It means facing up to tough choices." Mr Smith's remarks will be seen as a signal that he is prepared to bow to the Shadow Chancellor's insistence that commitments have to be paid for. Mr Smith and David Blunkett, the Shadow Education Secretary, have privately made it clear they have no disagreement with Mr Brown, but are seeking to make the plans work with their detailed review.

"This is not about the details of benefit changes but the underlying strategy of welfare reform in targeting resources where they are most needed," said a Labour source. Putting people into employment, rather than increasing benefits, remained at the heart of Labour's welfare plans.

The Tories were preparing to exploit the issue, sending mail shots to parents of 16-year-olds to warn they could lose their pounds 10 a week benefit under Labour. Peter Lilley, the Social Security Secretary, said: "Reforming welfare was supposed to be Labour's big idea. It is shaping up to be a big disaster."

In the John Smith memorial lecture, Mr Brown said on BBC radio: "Let's be clear about this - you don't set up a review unless you believe that something is wrong that needs to be sorted out. The status quo is not an option, when you look at the crisis that is facing young people."

Skills shortage, page 4

Gordon Brown, page 13