Just how many people will be affected by the housing benefit cuts?
The impact of the cuts as a whole will eventually be felt by most if not all claimants but the immediate focus is on new caps in the private rented sector. Welfare minister Steve Webb gave the official figures on local housing allowance caps in a written answer yesterday. He said there were:
- 3,340 recipients with a one-bedroom entitlement receiving over £250 per week
- 6,970 with a two-bedroom entitlement receiving over £290 per week
- 2,710 with a three-bedroom entitlement receiving over £340 per week
- 1,010 with a four-bedroom entitlement receiving over £400 per week.
So that makes 14,030 families receiving more than the new limits - almost half of them in two-bedroom homes. Webb said that no information was available on the number of families paid more than £100,000 per year (which would equate to almost £2,000 a week).
Westminster obviously tops the list of high-rent areas and Labour councillors there estimate that 84% of the 5,430 housing benefit claims in the borough would be over the limits. That’s 4,592 families or roughly a third of the cases in England as a whole.
Average rents in most of inner London are higher than that - by the time you include parts of Islington, Camden, Kensington & Chelsea, Hammersmith & Fulham, Richmond, Wandsworth, Southwark, Lambeth and Tower Hamlets it’s not hard to see how the total would get up to 14,000.
But will that be all? In the Budget debate yesterday Webb’s boss Iain Duncan Smith said that there were 750,000 people getting more than £10,000 a year - roughly £200 per week - and that this was happening ‘far too often’.
He said: ‘The Budget tackled the ballooning cost of housing benefit. In real terms, the cost of working-age housing benefit has increased from £10.6 billion to £15.4 billion in 2010-11. If the system was left unreformed, it is projected that the housing benefit bill would reach £21 billion in 2014-15. It is out of control and what is more, housing benefit is often unfair for working families.
‘Today, a tenant in a five-bedroom house in an expensive area such as Westminster could feasibly get more than £100,000 a year. Although that example applies to a small number of people, some 750,000 get more than £10,000 a year. Those cases are still in the minority, but they happen far too often. It is unacceptable and unaffordable that people on benefits are living in homes that our hard-working families cannot afford, so we have capped local housing allowance levels at the rate for four-bedroom properties.’
How big will the backlash be? The 2012 contest to become London mayor will provide one big test. Ken Livingstone announced yesterday that Westminster North MP Karen Buck will head up the campaign against the cuts and has made the housing benefit cuts a key part of his campaign to win the Labour nomination.
Buck argues: ‘These measures would lead to social cleansing on a huge scale, forcing people out of their homes to other parts of London, transforming communities for the worse and creating massive social dislocation. It is as if Dame Shirley Porter had been put in charge of housing policy for the whole country.’
In return, ministers see this as far more than just cuts. They argue that it’s unfair that anyone on benefit should get more housing benefit than someone working can afford in rent - as Grant Shapps puts it the principle is that ‘if you can work you should always be in a better position than if you don’t work’. And think-tanks on the right are not being slow about coming forward with new ideas for cuts.
With a range of other cuts to the local housing allowance and to housing benefit for social tenants on the way too this issue is going to run and run.
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Readers' comments (3)
Anonymous | 30/06/2010 9:28 am
Will HB be a test for the London mayoral election.
How many punters are going to vote for supplying someone with a resource which requires a salary of £300k a year to support.
Our Ken's far too fly to get caught out by that Mail shocker.
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Joe Halewood | 30/06/2010 11:25 am
Jules - follow the same link to Hansard and the debate and we see it being mentioned and not denied by IDS these HB cuts will realise £1.8bn per year. Yet the original article on here says Osborne is looking to save £1.7bn over 5 years.
So in a week we see it being claimed to be a saving of £1.7bn to £9bn? Is Osborne right at £1.7bn or Iain Duncan Smith at £9bn?
Does the now claimed £9bn make these proposed cuts (nationally and not just London please!!!) far more severe than first thought?
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Jules Birch | 30/06/2010 12:25 pm
Joe - the best info I've found on this was from the Budget red book. That puts the savings at nothing this year, £220m in 2011/12, £600m in 2012/13, £1,640m in 2013/14 and £1,765m in 2014/15. So George Osborne must have meant £1.7-£1.8bn in the fifth year not per year. That means the total claimed saving over five years would be £4,225m...
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