The chief executive of the Chartered Institute for Housing (CIH) has slammed George Osborne’s plan to freeze working age benefits for two years and cut housing benefit for under 21’s.
The changes will form part of the Conservative Party manifesto for the 2015 general election and are already coming under heavy criticism from charities and anti-poverty campaigners.
Grania Long said that Mr Osborne’s plan “fails to reflect the reality” that “millions rely on housing benefit to secure a roof over their head”, including working families.
The number of working households stuck on poverty wages and forced to claim housing benefit has more than doubled, from around 445,000 households to over a million in the last five years.
Long also criticised the Chancellor’s plan to scrap housing benefit for 18-21 year-olds and lowering the benefit cap from £26,000 to £23,000.
She said such a policy “fails to take into account the reality of many young people’s lives, and it could also mean that young people would be unwilling to take risks such as moving for work because there would be no safety net for them”.
CIH research has found that those households who would be affected by lowering the benefit cap already “face serious barriers to finding work, including a lack of job seeking skills and affordable childcare”. Ms Long said: “lowering the benefit cap would be very dangerous unless ministers commit to increasing support for people looking to get back into work and funding for childcare”.
She added: “Ultimately, if Mr Osborne really wants to tackle the housing benefit bill, he needs to commit to building more genuinely affordable homes. In the long term, shifting spending from housing benefit to house building and tackling low pay and unemployment is the best way of lifting people out of poverty and cutting the housing benefit bill.
“We need to sort out the problems in our housing and labour markets rather than rely on stop gap measures which at their worst can increase poverty and misery for already poor and vulnerable people.”
The conservatives believe pledging further cuts to welfare will be popular among voters. But five million of the ten million people who will be affected are in work and forced to rely on benefits to top-up low wages.
George Osborne’s Tory manifesto pledge has also been criticised by the Child Poverty Action Group (CPAG), who warn that more children could be plunged into poverty as a result of the cuts.
Alison Garnham, Chief Executive of Child Poverty Action Group, said:
“This is bad news for working parents struggling on low wages, already coping with rising living costs and previous benefit cuts.
“A couple both working full time on the minimum wage are nearly a fifth short of the money they need for basics; another freeze will make it a whole lot harder for them. For many of these families a higher income tax threshold will be of little help since what they gain in wages is largely clawed back from their tax credits. Two thirds of poor children have at least one parent working.
“Independent projections by the IFS make clear that cuts in the uprating of benefits will be the single biggest driver of the sharp rise in child poverty expected in the next few years. Today’s announcement would inevitably put more children in poverty and further questions claims the Government is on track to meet its 2020 child poverty targets.
“If housing benefit is included in the freeze, the gap between housing benefit and rents will widen further, leaving many families in a desperate struggle to afford decent housing.”
Chris Leslie MP, Labour’s Shadow Chief Secretary to the Treasury, commenting on George Osborne’s speech to the Conservative Party Annual Conference, said:
“Having failed to balance the books in this Parliament George Osborne has made his choice. He is choosing to give the richest one per cent a £3 billion-a-year tax cut and opposing a mansion tax while cutting tax credits which make work pay for millions of striving families.
“While working people have seen their wages fall by £1600 a year since 2010, the Tories have once again shown they are the party of a privileged few at the top.
“Labour will balance the books as soon as possible in the next Parliament, but we will do so in a fairer way. We will reverse the Tory tax cut for millionaires, stop paying the winter fuel allowance to the richest five per cent of pensioners and cap child benefit rises at one per cent for two years.”
Chancellor George Osborne Said:
“This freeze on working age benefit saves the country over £3 billion. It’s a serious contribution to reducing the deficit. Pensioner benefits and disability benefits will be excluded.
“And to those in work I say this – where is the sense in taxing you more only for you to be given some of your own money back in welfare. The best way to support people’s incomes is to make sure those out of work get a job and those in work pay less tax.”