Exclusive: So-called 'in-work poverty' soars by 59% under Coalition as more people with jobs are forced to claim housing benefit
Figures reveal extra £5bn cost to taxpayer by next election as wages fail to match rising rents
Andrew Grice has been Political Editor of The Independent since 1998. He was previously Political Editor of The Sunday Times, where he worked for 10 years, and he has been a Westminster-based journalist since 1982. His column, Inside Politics, appears in The Independent each Saturday.
Friday 09 May 2014
The number of people in work and claiming housing benefit has rocketed by 59 per cent since the Coalition came to power and will cost taxpayers an extra £5 billion by next year’s general election.
The figures, compiled by the House of Commons Library, highlight the growth of “in-work poverty” in recent years while wages fell in real terms and rents continued to rise. They also undermine claims by some Conservatives that benefit claimants are “skivers” because many people qualify for state help even though they are in jobs.
The number of housing benefit claimants in work rose from 650,561 in May 2010 to 1.03 million by the end of last year. The Commons Library estimates the cost of the extra claims at £4.8 billion by May 2015. In England, the number of in-work claimants has increased from 586,181 to 936,964 since 2010. In Scotland, the number jumped from 40,447 to 61,856 over the same period and in Wales from 23,923 to 38,003.
The Library calculated the amount spent on in-work housing benefit will rise from £3.4 billion in the 2010-11 financial year to £5.1 billion in 2014-15, making a total of £21.9 billion over the five-year parliament ending at next year’s election.
Labour, which commissioned the research, seized on the findings as evidence that the Government had failed to keep a lid on housing benefit despite bringing in controversial measures such as the so-called “bedroom tax” and a £26,000-a-year cap on benefits for one family.
Writing on The Independent’s website, Rachael Reeves, the shadow Work and Pensions Secretary, and Emma Reynolds, Labour’s housing spokeswoman, said: “This year the Government will be spending £1.4 billion more on housing benefit than in 2010. This increase is being driven by the huge rise in people in work needing to claim housing benefit because they can’t make ends meet. Far from, ‘getting to grips’ with housing benefit the Government has completely lost control… People used to think that if you were in work you should be able to save for a home. Now increasing numbers of working people can’t even afford their rent without help from the state.”
The areas with the biggest increase in claimants by working families include Croydon (up by 1,100 per cent); Fareham (883 per cent); Uttlesford (840 per cent) and Boston (103 per cent).
A Department of Work and Pensions spokesman said: “The truth is that the housing benefit bill was spiralling out of control in the years up to 2010, doubling to £20 billion in a decade. Action this Government has taken is bringing that bill under control - saving the taxpayer over £2 billion a year. Contrary to these figures, we have seen the number of housing benefit claimants fall over the last quarter. The removal of the spare room subsidy alone is saving £1 million a day and means the taxpayer is no longer paying for around 820,000 spare rooms in the social rented sector.”
He added: “This Government has also taken action to help hardworking people by increasing the tax-free personal allowance, freezing fuel-duty, cutting energy bills, and introducing free school meals and tax free childcare.”
The DWP announced that in the first year of the benefit ceiling’s operation, more than 100 people a week found jobs after their state payments were capped. Almost 6,000 “capped households” have seen someone moved into work, while more than 42,000 households have had their payments capped at £26,000. More than 1,000 saw their benefits cut by more than £200 a week.
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