The cap on the amount in benefits that can be claimed by one family will be reduced to £20,000 a year outside London and £23,000 in the capital.
George Osborne will announce the further squeeze, which will affect another 90,000 households in the UK, in his Budget on Wednesday. The Conservatives’ election manifesto pledged to reduce the current £26,000 cap to £23,000 nationally.
The Chancellor said: “It is not fair that people out of work can earn more than people in work so we are going to cut the benefit cap, as we said in our manifesto, to £23,000 in London. It will be lower in the rest of the country.”
He will point out that someone in work needs to earn £34,000 before tax to take home £26,000. People would need to earn £29,000 pre-tax to bring home £23,000, and £25,000 to take home £20,000. In London, two in five households earn less than £23,000.
What does five more years of the Tories mean for Britain?
What does five more years of the Tories mean for Britain?
1/8 Welfare payments will be slashed
One of the most controversial parts of the Conservative manifesto was to cut benefits for the working age poor by £12 bn over the next three years. But during the campaign they only said where £2 bn of these savings would come from. That leaves £10 bn still to find. Some experts think the only way they can close that gap is by means testing child benefit – with millions of families losing out
2/8 There will be tax cuts for those in work and those who die
The Tories will increase the threshold at which the 40p rate of tax becomes payable to £50,000 by 2020. They haven’t said so but it is also likely that at some point in the next five years they will abolish that 45p rate of tax altogether for the highest earners. They also want to increase the effective inheritance tax threshold for married couples and civil partners to £1m
3/8 There will be an in/out EU referendum in 2017
The next two years are going to be dominated by the prospect of a referendum on Britain’s membership of the EU. First off David Cameron has the daunting task of negotiating a deal with other EU leaders an acceptable deal that he can sell to his party so he can go into the referendum campaigning for a ‘yes’ vote. This may be unachievable and it is possible that the Tories may end up arguing to leave. Opinion polls show Britain is divided on EU membership, one poll this year showed 51% said they would opt to leave compared to 49% who would vote to stay in
4/8 There will be more privatisation of the NHS
Having won the election the Tories now have a mandate to go further and faster reforming the NHS. In order to make cost savings there is likely to be greater private involvement in running services, while some smaller hospitals may lose services they currently provide like A&E and maternity units
5/8 There will be many more free schools – and traditional state schools will become a thing of the past
The Tories plans to create 500 new free schools and make 3,000 state schools become academies. They will also carry on reforming the Department of Education and remove more powers from local authorities over how schools are run
6/8 On shore wind farms will be a thing of the past and fracking will be the future
Government spending on renewable energy is under real threat now the Lib Dems are no longer in power with the Tories. Subsidies are likely to be slashed for off-shore wind farm and other green energy supplies. Meanwhile there will be generous tax break for fracking as ministers try and incentivise the industry to drill for onshore oil and gas
7/8 There maybe more free childcare – but not necessarily
In the campaign the Tories pledged to double the amount of free early education for three- and four-year-olds from 15 hours a week to 30. The extra hours would only be offered to working families where parents are employed for at least eight hours a week. However they have not said where the money will come from to fund the pledge
8/8 Workers' rights could be reduced
The Tories want to slash business regulation, merge regulator and cut costs. The Lib Dems stopped them from reducing the employment rights of workers in power – but these are now under threat
Mr Osborne believes the introduction of the £26,000 cap has not resulted in the “ethnic cleansing” predicted by critics, who warned that people would be forced to move to less expensive areas. Government figures show that more than half the households affected by the cap were not caught by it 18 months later. Of those, 40 per cent had moved into work.
The Chancellor will extend a scheme under which local authorities can provide discretionary help to claimants with their housing costs. The cap does not cover benefits for the sick, disabled or pensioners.
The Budget will include a £30m package to speed up the adoption process for the 3,000 children in local-authority care waiting to find a family home, with a focus on harder-to-place children.
Mr Osborne said that it was a “tragedy” that so many children ready for adoption were waiting long periods to find new homes. More than half have spent more than 18 months in care, even though there is a surplus of potential adoptive parents.
Budget 2015: "Why do we call social security payments 'benefits'?"
300,000 people plead with Osborne not to cut tax credits
Osborne's tax credit cuts will 'affect more than seven million children'
Osborne to axe housing subsidies for higher income earners
The new money will waive fees local authorities must pay to adoption agencies for finding, assessing and matching adoptive parents and children. A £27,000 fee is paid for an adoptive parent found from outside a local authority’s border, either by another council or by one of 30 voluntary-sector adoption agencies.
Ministers believe the system is a disincentive to local authorities’ looking far and wide for potential parents for children in their care, particularly those who are the least likely to find a new home.
Mr Osborne said: “We cannot sit by when so many children are waiting so long to find a stable, loving home, particularly when there are parents out there who want to adopt. It just isn’t good enough. So I want to do all I can to make sure that there are as few barriers as humanly possible between children in care and their new parents.
“It shouldn’t matter where those families might live.”
David Cameron said: “The average time it takes to place a child with a new family has been falling and I am delighted we are able to offer this funding to try to ensure it falls further.”
The number of children adopted increased from 3,200 in 2010 to 5,050 in 2013-14. The average time it took to place a child with adoptive parents fell from an average 656 days in 2012-13 to 533 days in 2013-14.Reuse content