The proposed plan to remove housing benefits from under 25s is expected to save over £1.88bn for the government a year as part of their agenda to cut £10bn from the welfare bill by 2016 announced by George Osborne earlier this week.
David Cameron has confirmed he will be looking in to these changes, and the Liberal Democrats are expected to oppose it.
Simon Hughes, deputy leader of the Lib Dems, on the BBC’s Question Time last night, and said he would not agree to the proposal and nor would party leader Nick Clegg.
[Grant Shapps has] made clear it’s not a done deal across the coalition and I, as proposed and as I’ve heard it, would not agree to it. I’m very clear about that.
Harriet Baldwin did however clarify certain issues with the changes, specifying that it would not affect anyone fleeing domestic violence or leaving care, but figures from the DWP show that around 45% of under 25s receiving housing benefit are single parents, which appears to be a category they have not considered when making these decisions.
However, all of this is under the assumption that most people claiming housing benefits are just young people wanting independence from their parents and could easily move back home. Before housing benefit was introduced, young people lived in hotels and hostels, and then claimed board and lodgings allowance. This was then reformed by Margaret Thatcher by capping the level of allowance for the under-26s, who also claimed that young adults could return to their parents homes.
This is very similar to the restrictions being put in place by George Osborne; taking away benefits based on age rather than need.
CIH believes that this cut will reduce the chances of this group trying to find work and taking that leap into a new job, as there would be too much to risk if it went wrong.
Grainia Long, chief executive CIH, said:
It is impossible to create economic growth without a mobile workforce. It is crucial that everyone has access to help with housing costs to stimulate growth in the economy through jobs and stable homes.
Blanket age based exclusions don’t support growth and they fail the fairness test. Ministers have already said they want every new policy to support economic growth. It’s unclear how these cuts will pass that test.
Kate Webb, policy officer at housing charity Shelter, which opposes the move, said:
The way [the government is] positioning it is that it’s all about young school leavers but the statistics show that a lot of these households are young families.
It’s very hard to see how moving back to their parents can work.
Caroline Davey, director of policy at charity Gingerbread, which helps single parents, said:
The government is describing this as single under-25s not in work but these are adults living on their own raising children. We think it’s really unacceptable and lacks the understanding on the ground for families like that.
Brian Johnson, chief executive of Moat, said:
It is desirable that welfare reform sees people treated as adults, but on things such as the direct payment of housing benefit, is this going to cost us huge housing capacity in the future?