Why we must defend housing benefit for the under-25s

Removing the vital lifeline that the benefit provides will lead to a surge in hardship and homelessness.

Jade’s father sexually abused her from the age of 11. Living in fear throughout her adolescence, she tried to commit suicide three times. Because she had nowhere else to go, she remained in her family home until she was 19, when she could bear it no longer. Now 21, she lives in a shared flat paid for by £70-a-week in housing benefit, while she looks for work as a trained hairdresser. But this lifeline could soon be withdrawn.

David Cameron, Iain Duncan-Smith and George Osborne say that under-25s should live with their parents. They have all spoken of abolishing housing benefit for this age group. With £10bn in welfare cuts looming, we fear this is no idle threat. We have decided to take a stand against this arbitrary, unworkable and irresponsible cut, and today launch a campaign, No Going Home, to defend housing benefit for under-25s.

Jade is one of 385,000 people under the age of 25 who claim housing benefit in the UK. Some may be lucky enough to be able to move back in with their parents but many, like Jade, will be left with nowhere to turn – and it is not just victims of parental abuse and violence that face homelessness if their housing support is withdrawn.

Last year, some 10,000 young people became homeless and turned to local authorities for help precisely because their relationship with their parents had broken down and they had nowhere else to go. For others, their parents may simply refuse to take them back (they have no legal obligation to do so). Some will have moved away, or left the country entirely. Many parents just don’t have enough room to take in their grown-up children – a particularly serious problem when you learn that the majority (204,000) of under-25s claiming housing benefit have children of their own. In 21st century Britain, do we really want to go back to multi-generational families left with no option but to live together in cramped conditions? We should not forget those who have no parents at all. It is unclear where orphans are supposed to go when their housing benefit is abolished. Care-leavers face a similar problem.

Cameron has said that young people today are given a choice that says "Don't get a job. Sign on. Get housing benefit. Get a flat. And then don't ever get a job or you'll lose a load of housing benefit." Yet 66,000 under-25s on housing benefit are in work. Stagnant wages and soaring rents mean that they are forced to claim housing benefit to make ends meet. If their housing support is removed, they face having to move away from their jobs, which seems particularly unfair and counterproductive, punishing those who have succeeded in finding work in a very difficult labour market.

A further 99,000 of those affected are looking for work, and using housing benefit as a temporary measure while they get back on their feet. Jade is a trained hairdresser, and until being recently made redundant she was working at a local salon. The good news is that even with youth unemployment hovering around 20 per cent, two thirds of young people claim JSA for less than six months. However, withholding the support of housing benefit could easily transform a short period job hunting into long-term unemployment and homelessness forcing young people to move away from where the work is.

Twenty eight thousand young housing benefit claimants are sick or disabled and claim Employment and Support Allowance, and, in a compassionate society, surely deserve our support. Removing the vital lifeline that housing benefit provides will cause real hardship and, in the worst instances, homelessness.

Abolishing housing benefit for under-25s even contradicts the government’s own policies. Other cuts already announced are aimed at encouraging people whose children have moved out to downsize. The housing support available to young people is already very modest. Young single people in the private rented sector are only entitled to a room in a shared house. For a young person to have been allocated a social house they have to prove particular vulnerability and going forward will only be guaranteed a tenancy of two years.

It is clear that for many under-25s abolishing their housing benefit would be a disaster, but it would be bad for everybody else too. The average housing benefit claim is £89.46 a week – a figure that pales into insignificance compared to the costs of hospital admissions, hostels, B&Bs and prison – all of which, sadly, go hand in hand with homelessness.

Money aside, there is a strong moral argument for not casting these young people adrift. 18-24 year olds are adults with adult responsibilities, who may have paid taxes and National Insurance for a number of years.  They may have got married, had children, or voted, even served their country in the armed forces. So it is arbitrary and discriminatory to say that, just because someone needs help with their rent, they cannot be allowed take responsibility for themselves or make decisions about where to live, work or raise a family.

If this plan goes ahead it will be a disaster for many people trying to make their own way in the world but who need some support.  In Jade’s own words: "If it wasn’t for housing benefit I probably wouldn’t even be alive. I know it’s like dead drastic, but I feel like a burden on everybody. I have not wanted to live with my parents since I was about 12, 13. I’ve always had this situation at home. But if I wasn’t here now… I would be dead. That is me being honest." For Jade’s sake, and many more, we need to unite against any attempt to cut housing benefit for under-25s and make the coalition see sense.

Leslie Morphy is the chief executive of Crisis, the national charity for single homeless people.

To find out more and to add your voice please go to No Going Home

Last year, 10,000 young people became homeless and turned to local authorities for help. Photograph: Getty Images.

Leslie Morphy is the outgoing Chief Executive of Crisis, the national charity for single homelessness people.

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.