Reform think tank warns that Coalition's child benefit plan risks bringing targeting of benefits into disrepute

By Tim Montgomerie

A new report from the Reform think tank analyses the bureaucracy-enhancing 'money-go-round' that grew up under Gordon Brown. The appropriately-titled Money-go-round paper notes that middle and higher earners were big welfare gainers under Labour but all gains were lost in higher taxes:

Although it gives 'in principle' backing to George Osborne's attempt to reduce the welfare payments going to higher earners it is critical of the manner in which he has begun his task. The report warns that the child benefit change risks bringing "the whole idea of targeting benefits into disrepute". "The right way to means-test child benefit," Reform argues, "is to abolish it and to increase the value of the Child Tax Credit. This would remove the anomalies in the current proposals without requiring a new means-testing system to be established."

The Money-go-round report is also critical of Iain Duncan Smith's "badly-constructed" welfare plan. It warns that it will "encourage low wage, part time work and cause an increase in the welfare budget and the numbers of people on benefits".

You can read the full report here.