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9 May 2014updated 24 Jun 2021 1:00pm

Labour targets the Tories’ weak spot on housing benefit

New figures show that there has been a 59 per cent increase in working people claiming housing benefit since 2010.

By George Eaton

There are few stances that the Conservatives emphasise more than their commitment to reducing welfare spending. The policy imperative is to cut the deficit; the political imperative is to cast Labour as the party of the feckless.

But the rhetoric belies the reality. As Labour is highlighting today, new research by the House of Commons library shows that there has been a 59 per cent increase in working people claiming housing benefit (386,265) since 2010, increasing the already swollen budget (£24.3bn) by £4.8bn. Spending has increased in every local authority, proving that this is not merely a London problem. Rachel Reeves and shadow housing minister Emma Reynolds will visit Croydon today, where the housing benefit bill has risen by 1,100 per cent since 2010, the largest increase in the country. 

The Tories will respond by pointing out that Labour has opposed measures intended to reduce spending, such as the removal of the “spare room subsidy” and the £26,000 benefit cap (Labour would introduce a regionally-weighted version). But the opposition will present the figures as evidence that the government is engaged in crude salami slicing when more profound reform is needed. As one source told me: “Whenever the coalition talks about this issue, it’s almost entirely focused on restricting housing benefit for the under-25s, or taking it away from EU migrants. But one of the biggest drivers is people who’ve got jobs but who don’t earn enough to stay above the poverty line.” 

The task for Labour is to demonstrate how it would tackle the long-term, structural causes of welfare spending. As Jon Cruddas has long argued, it is madness that for every £100 spent on housing, just £5 is invested in building, while £95 goes on housing benefit. The party’s pledges to build at least 200,000 homes a year by 2020, to cap rent increases and to restore the lost value of the minimum wage are all aimed at turning the tide. I’m told that Reeves will be making further announcements to this end later in the year. 

If Labour can persuade the public that stagnant wages and extortionate rents, not work-shy claimants, are the biggest drivers of welfare spending, it may finally be able to turn the welfare debate in its favour. 

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