A future Conservative government would reduce the benefit cap from £26,000 to £23,000 and force young unemployed people to work for their benefits, chancellor George Osborne revealed today.
George Osborne told the Mail on Sunday that lowering the controversial benefit cap would help fund three million new apprenticeships. Previous Tory attempts to lower the cap have been blocked by the Liberal Democrats.
He also announced that 18-21 year-olds who are out-of-work for longer that six months would be required to take part in unpaid “community projects”, such as cleaning up local parks, or risk having their benefit payments stopped if they refuse.
The Tories believe such a move would be popular among voters calling for yet more cuts to welfare spending. But will alarm charities and poverty campaigners, who argue that benefit claimants are being unfairly targeted for cuts and marginalised in British society.
Speaking to the Mail on Sunday, George Osborne said:
“Our mission is not just to save the pounds here and there, we’re trying to change the welfare system so it doesn’t trap people in poverty and a culture of dependency. It is a tragedy for them and a waste for the country.
“We are saying you will receive an allowance but if you can’t find work after six months, you will have to work for the dole. They are difficult decisions but the right ones.”
George Osborne also said that 18-21 year-olds would be prevented from claiming housing benefit.
“It is not acceptable for young people under the age of 21 to go straight from school and into a home paid for through housing benefit – benefit funded by other people who are working”, he said.
Mr Osborne claimed that before the introduction of the benefit cap “some families were receiving £100,000 a year in housing benefit”. An analysis by the respected fact-checking website FullFact in November 2012 found that only 70 households, out of a total of 4.5 million, were receiving over £1,000 per week in housing benefit a week in September 2010.
“Even this is likely to overstate the number claiming £100,000 per year however”, said FullFact, “as a family would need to claim over £1,900 per week to hit this total. Previous FoI responses from the Department have suggested around five families benefited by this amount.”
They added: “While the evidence suggests that there are a small number of Housing Benefit claims of more than £100,000 per year – perhaps around five – these cases are very much the exception rather than the rule.
“Focusing exclusively on these outliers without first putting them into context, where over 80% of claims are below £100 per week, could distort the debate around this important topic.”
Rachel Reeves, Labour’s shadow work and pensions secretary said:
“David Cameron’s Government is set to overspend by a staggering £13 billion on social security. And the number of working people claiming Housing Benefit is set to double by 2018/19 costing every UK household £488.
“Spending has risen because the Government has failed to tackle the increasing number of low wage jobs and their welfare policies, from Universal Credit to Personal Independence Payments, are in chaos.
“We must bring down social security spending and doing that requires a new approach to tackle the root causes of these costs directly. That’s why a Labour Government would make work pay by increasing the minimum wage, stop young people cycling in and out of welfare before they’re established in jobs and build more homes to tackle rising housing benefit spending.
“Alongside our plans to introduce a compulsory jobs guarantee to get the long term unemployed off benefits and into work, these measures will help control social security spending for the long term. All the Tories offer is announcements to hide the truth of rising welfare spending.”
Update: Since publishing this article it has been brought to our attention that a future Tory government would also scrap Jobseeker’s Allowance (JSA) for 18-21 year-olds. It would be replaced with a “youth allowance”, paid at the same level as JSA. In order to continue receiving payments after six months of being unemployed young people would be required to “work for their dole” on “community projects”. The idea of a youth allowance has already been proposed by the Labour Party.