Labour drops over-16 benefit

Labour yesterday abandoned for the first time its support for the principle of flat-rate state benefits paid regardless of people's income, in a significant step towards greater targeting of welfare spending.

Gordon Brown, the shadow Chancellor, announced that a Labour government would take away child benefit from better-off mothers of sixth-formers and pay more to mothers on lower incomes.

The conclusion of Labour's controversial review of child benefit for the 16-18 age group fell some way short of making "tough choices" about the welfare state, as Mr Brown claimed when it was launched four months ago.

But it represents an important victory for the shadow Chancellor, according to his supporters, who say he is determined to challenge "old shibboleths of the left" about how to achieve a fairer society.

Child benefit between the ages of 16 and 18 is not strictly a "universal" benefit, because it is only paid to the mothers of young people in full- time education - about half the age group.

The shadow Chancellor was joined yesterday by David Blunkett, education and employment spokesman, and Harriet Harman, social security spokeswoman, to launch jointly the plan - Equipping Young People for the Future - which was presented as redistributing resources from rich to poor, with the objective of encouraging more young people to stay on in full-time education.

Child benefit for the 16-18 age group would continue to be paid to parents, but would be renamed an "education allowance" and restricted to "middle and lower-income families". In addition, some low-income families would receive it at a higher rate.

Mr Brown refused to give any details of the income levels above or below which support would be affected, but he made it clear that millionaires would not receive the allowance: "I cannot justify a situation where, if I represent the hard-working taxpayers of this country, the son or daughter of a millionaire who sends his or her child to Eton or to another private school can claim child benefit when half of the rest of the children in the country, half of the rest of the mothers of teenagers do not receive it," he said.