Tories would freeze benefits for two years
Speaking at the Conservative Party conference in Birmingham, the chancellor said his party would freeze working age benefits, including housing benefit and universal credit, from April 2016.
He said the move would save £3.2bn a year by 2017/18.
In the 2012 Autumn Statement the government announced a 1% cap on increases to benefit payments.
Under Mr Osborne’s plans, disability and pensioner benefits would be excluded from the freeze, as well as other payments like statuary maternity pay.
The Conservative Party claims that earnings have grown by 14% while working age benefits have been uprated by 22.4%.
After the two-year benefit freeze this gap will disappear, according to Conservative forecasts, meaning earnings and benefits would grow by roughly the same amount.
Mr Osborne said: ‘This is the choice Britain needs to take to protect our economic stability and to secure a better future.
‘The fairest way to reduce welfare bills is to make sure that benefits are not rising faster than the wages of the taxpayers who are paying for them. For we will provide a welfare system that is fair to those who need it, and fair to those who pay for it too.’
Grainia Long, chief executive of the Chartered Institute of Housing, said the proposal ‘fails to reflect the reality of the housing crisis’. ‘We are not building enough homes, which means the cost of housing and therefore the housing benefit bill is going up. Millions of people have no choice but to rely on housing benefit to secure a roof over their head.’
Yesterday, homelessness charities queued up to express concern about Conservative plans announced yesterday to bar 18 – 21-year-olds from claiming housing benefit.
Jon Sparkes, new chief executive of homelessness charity Crisis, said: ‘We have grave concerns about how these proposals will affect young people who cannot rely on the support of their parents.
‘While we welcome proposals to offer better training support and apprenticeships, we must make sure that housing support remains available for those who have no choice but to fend for themselves.’
Balbir Chatrik, director of policy at the youth homelessness charity Centrepoint, said: ‘Housing benefit isn’t a lifestyle choice for homelessness young people, it’s a necessity. Severing this lifeline would have a catastrophic impact on their futures.’