Housing benefit for under-25s could be scrapped, PM to announce

David Cameron is to set out plans to scrap housing benefit for the under-25s, in a speech that will make clear pensioners are to be protected from a second wave of welfare reform.

The government wants to cut as much as £10bn from the welfare budget by 2016, and is looking at setting regional benefit levels and cutting benefits from striking workers. Cameron and the Treasury set the £10bn target for new welfare cuts in last year’s autumn statement and the PM will go into detail in a speech on Monday.

The chief secretary to the Treasury, Danny Alexander, distanced the Liberal Democrats from the plans, though stopped short of denouncing them. He described them as Cameron’s own plans and argued the coalition’s priority should be to bed in universal credit – the new single working-age benefit due to be introduced from 2014.

Both the work and pensions secretary, Iain Duncan Smith, and the Liberal Democrats have been highlighting middle class welfare, such as the universal access to winter fuel payments, as a better target. But Cameron believes he made commitments to the electorate not to touch pensioner benefits, and would suffer electorally if he dumped them now – even if he delayed the changes until after the next election.

He has pointed privately to the experience of Tony Blair, who suffered politically when he promised not to introduce changes to tuition fees, but then legislated for such a change on the basis that it would not come into force until after the next election.

Instead, he will propose that 380,000 people under 25 are stripped of housing benefit and forced to join the growing number of young adults who still live with their parents. He will make exemptions for those that have been victims of domestic violence. The savings – which will mean an average loss per person of around £90 per week – are likely to be in the order of £1.8bn.

Labour accepts that the housing benefit budget is out of control and last week the party welcomed proposals of cuts from the left-of-centre thinktank the IPPR, but in the contest of a massive housebuilding programme.

In an interview with the Mail on Sunday, Cameron argued: “We are spending nearly £2bn on housing benefit for under-25s – a fortune. We need a bigger debate about welfare and what we expect of people. The system currently sends the signal you are better off not working, or working less.

”A couple will say, ‘We are engaged, we are both living with our parents, we are trying to save before we get married and have children and be good parents. But how does it make us feel, Mr Cameron, when we see someone who goes ahead, has the child, gets the council home, gets the help that isn’t available to us?”

“One is trapped in a welfare system that discourages them from working, the other is doing the right thing and getting no help.”

Asked if he would take action against large families paid large sums in benefits, he replied: “This is a difficult area but it is right to pose questions about it. At the moment the system encourages people not to work and have children, but we should help people to work and have children.”

Cameron also wants more done to cut jobseeker’s allowance for those refusing to seek work actively. The government has already tightened up requirements in this area, but the PM wants to go further. “We aren’t even asking them, ‘Have you got a CV ready to go? '” Cameron said.

He is also looking at restricting child benefit to those who have more than three children and forcing a small minority of unemployed people – an estimated 5,000 to 10,000 – to take part in community work if they fail or refuse to find work or training after two years.


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