New welfare clampdown could axe housing benefit from under-25s
People aged under 25 could be stripped of housing benefit payments in a new drive for welfare reforms to be launched by David Cameron this week.
The Prime Minister will use a speech in south-east England tomorrow to outline future radical changes which are aimed at saving an extra £10 billion by 2016 on top of existing plans.
Ministers expect this “next wave” of benefit cuts to include the axing of all housing benefit currently paid to around 380,000 people aged under 25. Such a move would force many to move back in with their parents rather than living independently.
A source close to the Treasury told The Sunday Telegraph: “ We are always looking at bringing in changes which make work pay. No10 – quite rightly – wants radical reform proposals.”
Another controversial reform which could come in further down the line is setting benefit payments regionally – which would mean less money going to claimants who live in less-expensive parts of the country.
Iain Duncan Smith, the Work and Pensions Secretary, raised the prospect of making this change earlier this year. At the moment, although housing benefit is set according to local rent levels, all other benefits, including Jobseeker’s Allowance, are paid at the same rate in all parts of the UK.
Some Tory MPs say the current system is unfair – with differing “incentives” on people to seek work depending on where they live. Liberal Democrats, however, would be likely to oppose any such changes.
In the Budget, delivered in March, George Osborne, the Chancellor, sprang a surprise on Mr Duncan Smith by effectively ordering him to cut £10 billion more from welfare by 2016 on top of the £18 billion his department has already pledged to achieve by 2014.
Sources close to Mr Duncan Smith, who was Tory leader between 2001 and 2003, hit back by suggesting that savings could be made by means testing benefits currently paid to all pensioners, which include winter fuel allowances, free TV licences and free bus travel.
However, Mr Cameron is understood to have ruled such changes out, citing a promise he made in the last general election campaign to protect such universal payments to the elderly.
There are currently tensions between No10 and Mr Duncan Smith’s department – although all sides are united on the overall purpose of the reforms: to insure nobody loses financially from going to work rather than remaining on benefit.
Mr Cameron’s speech will be the latest example of senior Conservatives pursuing a deliberately Tory agenda, following recent interventions from leading ministers on Europe, immigration, the replacement for Britain’s future Trident nuclear deterrent and moves to deal with “problem families”.
The aim is to boost Tory morale – and to achieve an opinion poll boost – by pursuing a “differentiation” strategy which risks alienating the Lib Dems. Since the Budget, which sparked several embarrassing U-turns, Labour have opened up a big lead over the Conservatives in the polls.
In an intervention earlier this year, the Prime Minister said his overall aim in reforming welfare was to stop people “languishing on the dole and dependency”.