Only a Labour government would take action to bring housing benefit under control


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The Tory-led government talk tough on housing benefit, promising new measures, crackdowns and action to control rising costs, but the reality is far removed from its hyperbolic rhetoric. Today we publish figures from the House of Commons Library which expose the complete failure of David Cameron’s government to control housing benefit spending because more people are struggling to get their pay to cover their rent.

Ministers have recently claimed that they are finally getting to grips with the housing benefit system. But the truth is that this year the Government will be spending £1.4bn 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. The new figures show there has been a staggering 60 per cent increase in the number of working people claiming housing benefit. That’s 400,000 more people in work who are now claiming housing benefit and its taxpayers who pick up the tab. The cost of the increase is an estimated £4.8bn over the parliament.

And this is clearly a problem which affects the whole country with every local authority in the UK seeing an increase in the number of people in work claiming housing benefit. The biggest increase in the country was in Croydon which has seen an astonishing eleven fold increase. There have also been huge increases right across the country from Fareham where there has been a nine-fold increase to Pendle where it’s increased eight-fold. And many of the people affected will be struggling to get by on zero hours contracts or unable to get the hours they want.

So why has this happened? It is a symptom of this Government’s failure to deliver rising living standards for everyone, not just a few at the top. In particular rising housing benefit bills are the result of increasing numbers of people we are seeing stuck in low paid and insecure jobs, and the low levels of house building which has led to an acute shortage of affordable homes to rent and buy.

Working people are on average £1,600 a year worse off since David Cameron became Prime Minister. The cost-of-living crisis has placed huge financial pressure on working people through rising rents, energy bills and the cost of childcare. This is also driving up the social security bill as low paid and insecure work forces more and more people to rely on housing benefit and other tax credits to help pay their bills. We’ve seen record numbers of people who can’t get the hours or work they want. This is in itself costing taxpayers over £1.7bn a year in housing benefit.

Moreover, despite the urgent need for more new homes this government has delivered the lowest level of housebuilding in peacetime since the 1920s. We are not even building half the number of homes we need to keep up with demand. Tackling the Tories soaring housing benefit bill will need a new approach. That’s why Labour has committed to getting 200,000 homes built a year by 2020. As well as delivering the desperately needed new homes this could create up to 230,000 jobs. We’ve also set out plans to tackle the scandal of empty homes across the country and to reform the private rented sector with three year long-term tenancies with a ceiling on rent increases, giving all tenants stability and predictability.

A Labour government will take immediate action to deal with David Cameron’s cost-of-living crisis by freezing gas and electricity bills until 2017, introduce a lower 10p starting rate of tax to help make work pay, and end the abuse of zero hour contracts. And we’ll make work pay by strengthening the national minimum wage and incentivising employers to pay a living wage.

Following the last general election, Iain Duncan Smith said “we must be here to help people improve their lives – not just park them on long-term benefits.” Regrettably, that is exactly what his government has done because they have failed to tackle the cost-of-living crisis, housing shortage and growth of insecure and low paid jobs.

Far from, “getting to grips” with housing benefit the government has completely lost control over the huge increase in the number of working people relying on housing benefit. 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. 

Only a Labour government would take action to bring housing benefit under control by tackling the cost-of-living crisis and the underlying causes of the rising social security bill by building more homes and making work pay.

Rachel Reeves is shadow Work and Pensions Secretary. Emma Reynolds is shadow Housing Minister