Threat to end child benefit for over-16s lifted

Gordon Brown's proposal to abolish child benefit for the over- 16s is at risk, according to Whitehall sources. Anthony Bevins, Political Editor, reports on a pledge which appears to have vanished without trace.

The threat to child benefit received by mothers with children aged 16 to 18 in full-time education - dubbed Labour's "Teenage Tax" by the Tories - has been lifted.

Parents of children in full-time education continue to receive the benefit, of pounds 11.05 for the first child and pounds 9 for subsequent children, up to their 19th birthday. It is not available for over-16s in training.

Abolition of the benefit was first floated by Mr Brown, when he was shadow Chancellor in April last year, when it was said that more than a million families could be affected, with an annual saving to the Exchequer of pounds 700m. The plan was to redirect the cash to help low and middle-income families with children in education or training, penalising parents like those with children in the sixth-form at Eton.

Tony Blair subsequently supported a review, when he said: "It makes absolute sense to look hard at all the sources of money in this area, and to review the present system and see whether it's fair, whether it's efficient, whether the money could not be better used in extending opportunity for people currently denied it."

But The Independent has been told that the Labour leader wanted a review as a device to kick an unpopular idea into touch - a means of dropping it, without embarrassing Mr Brown.

The Labour election manifesto said: "We are committed to retain universal child benefit where it is universal today - from birth to age 16 - and to uprate it at least in line with prices." But it then added: "We are reviewing educational finance and maintenance for those older than 16 to ensure higher staying-on rates at school and college, and that resources are used to support those most in need. This review will continue in government."

Whitehall sources have said that an inter-departmental review, led by the Department for Education and Employment, has been at work for some months. The Chancellor said in his Budget speech, on 2 July, that the review would be completed "to ensure that resources are used to support those most in need".

But two sources from different departments have said that the review has "run into the ground".

Implementation of Mr Brown's idea was said not to have the support of Cabinet colleagues; it was said to be much too complicated to implement; and would not generate sufficient savings from the better-off to make it worthwhile.

A spokeswoman for the DfEE confirmed that a review was taking place, but she was unable to offer any published reference to it by any of her department's ministers.

The Commons library said that it had nothing on its parliamentary database to show that any minister in any other department had said anything about the proposal since May.