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Examining the Impact of Proposals to Cut Housing Benefit for Under 25s

June 27, 2012 The Fresh Outlook

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Are David Cameron’s hopes for welfare cuts simply ‘aspirational waffle’ or ‘deeply irresponsible’? What impact could the recent proposals have?

On Monday David Cameron unveiled his plans for the Conservative party’s new manifesto, where he hopes to make cuts to the current welfare system. Amongst other ideas, Mr Cameron focused on housing benefit, which has cost the government £23.2bn this year alone. Mr Cameron hopes to save at least £2billion with proposals to potentially cut housing benefit for those under 25 completely. He did state, however, that he would make an exception for those who have come from homes where domestic abuse or violence had been an issue. This possible future policy is still unclear, and many have accused Mr Cameron of sensationalism. The speech, which took place at Bluewater shopping centre in Kent, was perhaps designed to spark debate, rather than set out specific policy reforms.

Mr Cameron has championed the end of the so-called ‘something for nothing’ culture, saying: “We have, in some ways, created a welfare gap in our country between those living long term in the welfare system and those outside it.

“Those within it grow up with a series of expectations: you can have a home of your own, the sate will support what desertions you take, and you’ll always be able to take out no matter what you put in. This has sent out some incredibly damaging signals; that it pays not to work, that you’re owed something for nothing. It gave us millions of working age people sitting at home on benefits, even before the recession hit. It created a culture of entitlement and it’s led to huge resentment amongst those who pay into the system, because they feel what they are having to work for, others are getting without having to put in the effort.”

However, Mr Cameron’s ideas on welfare reform and his concept of the ‘Big Society’ have been criticised by a number of high profile figures. In a recently published book, the leader of the Church of England, Dr Rowan Williams, has said that Mr Cameron’s Big Society is: “aspirational waffle … designed to conceal a deeply damaging withdrawal of the state from its responsibilities to the most vulnerable.”

But why has David Cameron targeted under 25s in his plans for housing benefit? It has been suggested that it is because this age bracket votes the least; with others suggesting that the negative image of young people which was perpetuated by the minority involved in last year’s riots is to blame.

The Fresh Outlook takes a look at how these proposals would affect those who are currently under 25 and dependent on housing benefit.

Ben Benjemin, from London, spoke to The Fresh Outlook about her experiences and what would have happened had she not been able to claim housing benefit when she was younger.

“I was basically homeless between the ages of 13 and 18,” she says. “During that time I continued to go to school. I left secondary school with 12 GCSEs … and I went on and I did A levels. After that I went out and got a job, but the point is that during that time I received housing benefit, and now they’re talking about not having it for under 25. There is nothing else that I would have been able to do.

“From my point of view, I felt like I went to school, I got GCSEs – I wasn’t a burden on society. I don’t take drugs, I don’t drink, I didn’t get pregnant at a young age. I was just unfortunate not to have a stable enough upbringing to support me.”

As Ben points out, without the housing benefit that many young vulnerable people depend on, most would end up homeless. She goes on to highlight her frustration at what she views as David Cameron’s lack of understanding about the impact the proposals could have:

“It is so ignorant … of him … He doesn’t understand what goes on at street level and the sorts of issues which are facing young people these days.

“I don’t really understand how you can justify ignoring all of this which is around you and coming up with something like this. He is definitely out of touch.”

Many charities and organisations that help venerable young people have also strongly criticised Mr Cameron’s plans as ‘deeply irresponsible’, claiming these proposals will “present serious problems” in the long run. Leslie Morphy CEO of the homelessness charity Crisis said: “At a time when youth homelessness is already on the rise it would be deeply irresponsible [to remove housing benefit for under 25s].”

Homelessness charity Shelter has also stated: “Many young people are facing significant difficulties in finding work; these proposals would leave thousands with nowhere else to go.

“Currently over half of young people who rely on housing benefit to pay a private landlord will be on benefits for less than six months while they are unemployed and look for work.”

As both of these charities point out, the fact that the majority of housing benefit claimants are in work and not “sitting at home on benefits” has largely been ignored. A recent study by The Building and Social Housing Foundation showed that 93% of new housing benefit claims made between 2010 and 2011 were made by households containing at least one employed adult. This reveals that the majority of housing benefit claims are being made by people who work low paid jobs and need housing benefit to be able to pay high rents. Leslie Morphy of Crisis also confirmed this statistic, saying: “It is not just the very vulnerable who will lose out. Housing Benefit is rightly claimed by people who are in work but whose pay is too low and local rents are too high.”

Commenting on the issue, George Eaton, writing for the New Statesman, said: “It is meaningless of Cameron to claim that the housing benefit budget is ‘too large’ without considering why. The inflated budget … is the result of a conscious choice by successive governments to subsidise private landlords rather than invest in affordable social housing. Yet rather than addressing the problem of stagnant wages and excessive rents, Cameron, in a bid to appease his querulous party, has chosen to squeeze the already squeezed.”

It remains to be seen whether David Cameron’s proposals for cuts to the welfare system will be implemented. But regardless of whether or not they are merely used to ‘create debate’, it is important to consider that any decisions made will have a significant impact upon the lives of everyday people.

By Sarah Leyland

[Image courtesy of World Economic Forum]