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Unemployment and Housing Benefit Costs

Oral Answers to Questions — Work and Pensions – in the House of Commons at 2:30 pm on 25th June 2012.

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Photo of William Bain William Bain Shadow Minister (Scotland) 2:30 pm, 25th June 2012

If he will estimate the likely change in unemployment and housing benefit costs in 2015 compared with estimates made in the 2010 autumn statement.

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

In 2015-16, we expect to spend around £220 billion on benefits and personal tax credits. That includes an estimate of spending on jobseeker's allowance and housing benefit which, taking account of the latest assumptions from the Office for Budget Responsibility, is around £1.4 billion higher than was expected in 2010.

Photo of William Bain William Bain Shadow Minister (Scotland)

Is not the truth that just one in eight of housing benefit recipients are unemployed and that 93% of new claimants are in households struggling in low-paid work, with falling real wages but paying soaring rents to largely private sector landlords? Instead of forcing 380,000 young people under 25 back in with their parents or onto the streets, should not the Government be dealing with surging rent rises, building social housing and introducing a proper living wage, to deal with the biggest squeeze on living standards for 90 years?

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

Can I remind the hon. Gentleman which Government introduced the local housing allowance, as a direct result of which rents rocketed? As for our changes to housing benefit, the latest report, published about a week ago, shows that only about 1% of those affected have to move; a third have now said that they will seek work, which is a positive effect; and something near a half have not seen any rent rises or negotiated them downwards, so rents have been falling.

Photo of Philip Davies Philip Davies Conservative, Shipley

I congratulate my right hon. Friend on introducing the benefits cap. Can he give more details of what has happened since housing benefit was capped? Also, in the light of the Prime

Minister’s speech today, will he commit the Government to consider reducing the benefits cap from £26,000, which my constituents think is still far too high?

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

I shall certainly relay my hon. Friend’s views to the Prime Minister as part of the overall review. When we made the changes to housing benefit, we were attacked by the Opposition for “social cleansing” and all those dangerous things we were supposed to be dealing in—[ Interruption. ] No, no, by Mr Byrne and his team. On the one hand, his team accuse us of social cleansing; on the other, he accused me the other day of not cutting deep enough on housing benefit. The only shambles here is their position on housing benefit.

Photo of Jack Dromey Jack Dromey Shadow Minister (Housing)

A million young people are out of work. Now, the Prime Minister wants to deny housing benefit to under-25s, pushing thousands into becoming homeless and punishing workers on low pay or in an apprenticeship who need housing benefit to keep a roof over their head. Does the Secretary of State agree with the chief executive of the YMCA, who says it is

“difficult…to think in our 168-year history of a proposal more detrimental and having a negative impact”,

and the chief executive of Crisis, who says that the Government are being “irresponsible” and should concentrate instead on creating badly needed jobs and building badly needed affordable homes?

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

We are doing all those things. The housing benefit changes are necessary to bring back under control a budget that was spiralling under the Government the hon. Gentleman supported. In almost 10 years, we saw that budget rise from about £11 billion to £21 billion. That was madness, and it was their lack of control and their creation of the local housing allowance that led to that problem, so we will take no lectures from him or his hon. Friends about what is right or wrong in relation to housing benefit.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith

How many young people under 25 does the Secretary of State think will lose their jobs as a result of the measures that his Prime Minister is proposing?

Photo of Iain Duncan Smith Iain Duncan Smith The Secretary of State for Work and Pensions

I am not aware that any would lose their jobs. I am aware that, as I said to my hon. Friend Philip Davies, the housing benefit changes that we have introduced are already leading to a large number of those who were not in work now seeking work. That is the difference between us and the Opposition—we believe that these changes should be about helping people to become independent; they think welfare is about making people dependent on them.