Cameron plans fresh crackdown on benefits

Every person under the age of 25 will be banned from state help with housing costs, under controversial plans set out by David Cameron.

Mr Cameron will use a major speech tomorrow to outline the prospect of a fresh crackdown on the welfare state, in a move likely to infuriate the Lib Dems, who opposed many of the recent cuts to benefits. He wants to impose further cuts on the system, which he claims "encourages people not to work and have children".

New proposals being considered include ending Jobseeker's Allowance for those judged not to be trying hard enough to find work, making the long-term unemployed carry out community work for no pay, and scrapping housing benefit for 380,000 under-25s. "We are spending nearly £2bn on housing benefit for under-25s – a fortune," the Prime Minister said in an interview with the Mail on Sunday. "We need a bigger debate about welfare and what we expect of people."

It is also understood that child benefit could be limited to a parent's first three children.

The Prime Minister has repeatedly ruled out cuts to universal benefits paid to well-off pensioners, after making pre-election promises that free TV licences, bus passes and heating allowances were safe. Iain Duncan Smith, the Work and Pensions Secretary, has called for a rethink.

In the interview, Mr Cameron said it is "right to pose questions" about the welfare system. "At the moment the system encourages people not to work and have children, but we should help people to work and have children."