Letter: Taxation of child benefit

Sir: We must hope that your story 'Child benefits may be taxed' (20 July) is just kite-flying by a Government looking at all the options for public expenditure savings, no matter how lacking in logic.

For, of course, to tax child benefit would not only run counter to the spirit of the whole-hearted endorsement in the Government's election manifesto; it would also contradict the letter of the Government's rejection of this option in its 1985 Green Paper during the review of social security:

the great majority of working families pay tax, so that the effect would be equivalent to a 30 (now 25) per cent reduction in child support . . . (or) reducing their tax threshold . . . The Government's aim is to take people out of tax, not bring them into tax.

The illogicality of taxing a benefit aimed primarily at meeting extra costs, not replacing an income from employment, was recognised when the Government took mobility allowance for disabled people out of taxation. There are plenty of good ways of extracting more money in taxation from the better-off, if this is the perceived problem; picking on only those who happen to have children is not one of them.

As pointed out in your leading article, the Government's manifesto promise that 'child benefit will remain the cornerstone of our policy for all families with children' may not have excluded the possibility of taxation. But such a step would make a mockery of that promise.

Yours faithfully,

FRAN BENNETT

Director

Child Poverty Action Group

London, EC1

20 July