Britain's government is to scrap child benefit payments for middle income and high-earning families as part of its plan to slash government spending, Treasury chief George Osborne said Monday.
Osborne, who is scheduled to deliver a speech to the Conservative Party's annual rally in Birmingham, central England, later said parents who earn more than 44,000 pounds ($70,000) per year will lose the payment from 2013.
Currently, all families are paid 20 pounds ($32) a week for their eldest child and about 13 pounds ($20) for other children. The benefits continue until the children are aged 19, if they stay in full-time education.
Osborne said scrapping the benefit would raise 1 billion pounds ($1.6 billion) and was necessary as part of the government's plan to clear the budget deficit by 2015.
"It is a big decision for us but we think it is absolutely necessary and fair given the financial situation we face," Osborne told BBC television.
On Sunday, about 7,000 labor union members — including teachers and health service workers — staged a march outside the Conservative convention, to protest at planned spending cuts.
Osborne has already announced a multibillion pound package of spending reductions and tax hikes, including a two year pay freeze for most public sector workers, a new levy on banks and a rise in a tax on goods and services.
He will set out detailed plans for spending cuts over the next five years in a major address to Parliament on Oct. 20. seeking to save about 86 billion pounds ($135 billion).
In his speech to party activists Monday, Osborne planned to strike an upbeat message on the future of Britain's economy — suggesting that painful measures in the short term would allow the country to prosper.
"The hard economic choices we make are but a means to an end, and that end is prosperity for all," Osborne planned to say, according to excerpts released in advance.
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