Housing benefit cut would save fifth of £10bn target
Ending housing benefit for under 25s would result in savings worth less than a fifth of the government’s intended £10 billion reduction in welfare spending.
According to figures from the Chartered Institute of Housing, there are 383,650 households aged under 25 on housing benefit in Britain. If this was removed entirely it would save £1.88 billion.
Chancellor George Osborne yesterday told the Conservative Party conference he wants to cut £10 billion from the welfare bill by the first year of the next parliament, on top of reductions that are already planned.
‘We will have to make further savings in the welfare budget, but as we save we are agreed we must relentlessly focus on what we do on transforming lives.’
Iain Duncan Smith, work and pensions secretary
He suggested a move to cut housing benefit for ‘young people who have never worked’ could be a key part of the reforms. Some vulnerable groups such as care leavers or people fleeing domestic violence are expected to be exempt from any cut.
Grainia Long, chief executive of the CIH, said cutting housing benefit for under 25s would hinder economic growth.
‘It is impossible to create economic growth without a mobile workforce,’ she said.
‘It is crucial that everyone has access to help with housing costs to stimulate growth in the economy through jobs and stable homes.’
Work and pensions secretary Iain Duncan Smith did not mention the plans to cut housing benefit for young people in his speech to the conference yesterday, despite writing about them in an article jointly authored by Mr Osborne that appeared in the Daily Mail.
He told delegates: ‘George Osborne and I recognise… we will have to make further savings in the welfare budget, but as we save we are agreed we must relentlessly focus on what we do on transforming lives.’
He also said welfare claimants will lose benefits for failing to seek work, and gave details of the new sanctions regime under universal credit.
Claimants will lose three months of benefit for the first offence of not seeking work, six months for the second offence and three years for the third. ‘Gone are the days when doing nothing was a long term option,’ he said.