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Ed Balls: Labour to cap child benefit rise for two years

Child benefit would see cuts for the first two years of a Labour government, Ed Balls is expected to announce.

The shadow chancellor will say that Labour will cap child benefit for at least two years. Credit: Julian Stratenschulte/DPA/Press Association Images

The shadow chancellor will present a 1% cap on rises in the help for parents as one of the "tough decisions" necessary to deal with the deficit if the party takes power next year - claiming it will save the taxpayer £400 million over five years.

He will seek to soften the blow by cutting ministers' pay by 5% and then freezing it until the party is able to "balance the books".

Addressing activists at the Opposition's final annual conference before the general election in May, he will vow not to "flinch from the tough decisions" needed to deal with the economy.

He will tell the Manchester gathering:

I want to see child benefit rising again in line with inflation in the next parliament.

But we will not spend money we cannot afford. So for the first two years of the next parliament we will cap the rise in child benefit at 1%.

It will save £400 million in the next parliament. And all the savings will go towards reducing the deficit.

– Ed Balls, Shadow Chancellor

Report: Tory MP calls for 'two child limit' on benefits

Families would only be able to claim benefits for two children under plans put forward by a member of David Cameron's policy board aimed at cutting billions of pounds off the welfare bill, according to the Mail on Sunday.

Families would only be able to claim benefits for two children, under new plans put forward. Credit: Julian Stratenschulte/DPA/Press Association Images

The radical proposals reported to have been set out by Tory MP Nadhim Zahawi would limit child benefit and child tax credits to families' first two children.

According to the newspaper, he said capping benefits by family size would "save billions and help the next generation think more carefully about their relationship with the welfare state".

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Parents advised to register child benefits to avoid fines

HM Revenue and Customs (HMRC) has urged parents who have not registered child benefits to do so now to avoid further fines.

This only applies to families where one parent earns £50,000 or more and who have not already opted out of the payments.

Although we are past the deadline, people should still register for self-assessment to minimise any penalties they may face.

– spokesman, hmrc

Fines for failing to register will be decided on a case-by-case basis, HMRC said.

Declare your child benefit on the HMRC website

HMRC: 165,000 parents face fines over child benefits

Tens of thousands of parents could be fined for failing to register the child benefit they received this year with the taxman.

Families where a parent earns over £60,000 must either opt out of child benefits or register them Credit: Julian Stratenschulte/DPA/Press Association Images

An estimated 165,000 people missed Saturday's deadline, meaning they face penalties as well as losing the handout.

Under Government reforms, households where one parent earns more than £50,000 a year have to return the benefits through the self-assessment system unless they have opted out of receiving it in the first place.

HM Revenue and Customs said the number of parents who had opted out of child benefits altogether had far exceeded expectation.

HMRC letters 'confusing' parents over child benefits

Trade union the TUC has attacked the "complicated and confusing" letters sent to households which it said could lead to some people still entitled to child benefits opting out with "disastrous" consequences.

General secretary Frances O'Grady called on the Government to restore universal child benefit, as the deadline to register with HM Revenue and Customs ends tomorrow.

Quite apart from the fact that the decision to withdraw the benefit is unfairly hitting single parents, many families where one parent earns more than £50,000 are - even at this late stage - still unaware that unless they've visited the HMRC website by the end of tomorrow they may be fined.

To make matters worse, HMRC isn't only sending letters to those parents affected by the change.

– Frances O’Grady, General Secretary, TUC

Parents registering 'last minute' for child benefits

The chief executive of HM Revenue and Customs has warned parents to not leave registering for child benefits "until the last minute", on the eve of the stated deadline.

Lin Homer told BBC Radio 5 Live:

We think there are about 200,000 people who need to get off their backsides and do something.

HMRC is committed to helping people pay the right amount of tax and urges parents who have been affected by the changes to child benefit to register for self-assessment.

We know that lots of people leave it until the last minute.

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HM Revenue head's warning over child benefit cuts

Better-off parents affected by child benefit cuts need to "get off their backsides" and register with HM Revenue and Customs, its head warned on the the eve of the stated deadline.

A general view of HM Revenue and Customs (HMRC) contact centre in Belfast. Credit: PA

Families were given until the end of tomorrow to opt out of receiving the state help or register for income tax self-assessment so some or all of it can be clawed back - or face possible fines.

Officials say that in reality punishments are unlikely to be imposed on anyone who complies by the end of January, but HMRC chief executive Lin Homer said many thousands had still not done so.

Labour and union support for Miliband pledges

Labour MPs and Len McCluskey, the Unite General Secretary have put their support behind Ed Miliband on Twitter:

MPs blast Miliband on Twitter

Liberal Democrat and Conservative MPs have taken to Twitter to blast Ed Miliband after his bid to regain the upper hand in the benefits debate by pledging to cap the overall welfare bill:

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