Coalition ‘in disarray’ over rethink on changes to child benefits

His comments appeared to contradict the Liberal Democrat Deputy Prime Minister, Nick Clegg, who announced yesterday there would be a rethink on the measure first announced by Chancellor George Osborne in 2010.

And they infuriated right-wing Tory back-benchers, who argued the plan was an attack on the family and “stay-at-home mothers”, and threatened to vote against the measure.

The proposal would mean a family with one earner on £42,754 a year – the point at which the 40p rate of taxation begins – would lose benefit, but a family with a joint income over more than £80,000 with no higher tax-rate payers would still receive it.

Last night, there was speculation that Mr Osborne will use his Budget in a fortnight to change the measure, possibly raising the threshold to £50,000, or not to include families where the only earner was in the higher tax rate bracket.

But Mr Clarke last night insisted there would not be a U-turn.

He said: “It is quite wrong that some people are firstly paying the higher rate of income tax on the basis that they’re above-average earners and at the same time receiving a social benefit to help them pay for their children. It’s an anomaly which, at a time of acute financial crisis, was bound to be addressed.

“There is this problem that we assess people [for tax] individually. I am sure the details can be looked at, but the idea the government’s going to do a U-turn on that is ridiculous.”

He added: “It’s very hard on the families, but they’re higher-rate taxpayers. And we’ve all got, I’m afraid, to find that we’re tightening our belt a bit to get ourselves out of the mess we’re in to get the economy recovering again.”

But earlier Mr Clegg suggested a change was possible.

He said: “We’ve also equally accepted that there’s an issue about how you do that, so you make sure you don’t create these unintended consequences where, say, a family with one upper-income earner get child benefit removed when there’s another family with two income earners who collectively earn more but keep the benefits.”

Labour shadow chancellor Ed Balls said that the disagreement between the Cabinet ministers meant that the policy was “in disarray”.

Meanwhile, right-wing backbench MPs made clear that they would fight the measure and if necessary vote with Labour to stop it.

Tory back-bencher Stewart Jackson said: “If Labour votes against it, the government will be defeated as it presently stands.”

Fellow Tory MP Christopher Chope warned the government plans would lead to “a lot of unfairness and injustice”, and urged ministers to think again.

“People realise we went into the general election saying we were not going to change the arrangements for child benefit,” he said.