Cameron's welfare crackdown: what's for the chop?

Large families claiming child benefits and young people who want to leave home are top targets

Cameron's welfare crackdown: what's for the chop?

 

David Cameron delivered one of the most-trailed speeches of his premiership in Kent today, in which he set out further proposed cuts to Britain's welfare budget.

His pledge to attack the "culture of entitlement" had provoked considerable political speculation over the weekend.

But what did the prime minister actually say in today's speech?

Child benefits for large families

The government will look to cap child benefits for jobless families so that they receive it for only three children. Welfare secretary Iain Duncan Smith said on the Today programme that taxpayers have to think carefully about how many children they can afford, but asked: "Those not in work, do they do the same thing?"

Data shows that more than 150,000 people who have been claiming income support for more than a year have three or more children, while 57,000 claimants have four or more children. The prime minister is keen to remove incentives within the welfare system for people to continue having children when they lack the financial means to pay to support them.

Housing benefits for young people

Among young people aged between 16 and 24, there are 380,000 receiving housing benefits of £1.8bn. The PM claimed that while some young people have to remain in the family home while they work their way towards having enough money to move out, others "receive housing benefit [at] 18 or 19 - even if they're not seeking work."

Housing benefits were capped last year for under-35s at the market rate for a single room in a shared house, and the latest measures are aimed at pulling the overall housing benefit spending from a projected peak of £23.2bn in the current 2012/13 fiscal year. The housing benefits limit of £25,000 a year could also be cut in coming years.

Long-term unemployed

In a move inspired by policies enacted in the US state of Wisconsin, the Tories are proposing that long-term unemployed people could be stripped of their benefits after two years of claiming them. "David will say we should look at time-limiting benefits. In America they say, 'Sorry, you have it for two years and then you're on your own'," a Downing Street source told the Daily Mail.

When introduced by Republican governor Tommy Thompson in the 1990s, the Wisconsin Works scheme saw benefits claimants cut by 80 per cent after claimants were forced to live on charity handouts and food parcels when their entitlement to state benefits ran out.

Regional rates

The prime minister said that he wanted to look at whether it "made sense" that benefits were paid at a national rate, which didn't take into account regional variations of pay. As it currently stands, those receiving benefits in economically depressed regions are relatively better off in comparison to those in work than they would be in better-off areas.

This would presumably see people in richer areas such as the south receiving higher benefits than those in the north.

Protection for the elderly

The elderly account for £107bn of government benefits compared to £54bn for working-age people. The bill for free TV licenses and bus passes comes to £4bn alone, the same that is spent on the Jobseekers Allowance. However, despite a Sun campaign to introduce means-testing and voices raised across the political spectrum about such universal benefits as the £200 winter fuel allowance for pensioners, the PM was expected to protect these benefits. 

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