Number of people in work claiming housing benefit soars

The number of working people relying on housing benefit to boost their income has doubled in five years, at a cost of billions of pounds to the taxpayer, a new analysis has disclosed.

Labour will seize on the figures today to argue that millions more people are trapped in insecure jobs with poverty pay despite recent evidence of economic growth.

According to the House of Commons statistics, 478,000 people with jobs claimed housing benefit in 2009/10, rising to an expected 962,000 this year. On current trends, the number of claimants will increase by a further 276,000 to 1,238,000 in 2018-19.

The cost to the taxpayer has climbed from £2.2bn in 2009/10 to £4.6bn this year and to a projected £6bn in 2018-19.

The shadow Work and Pensions Secretary, Rachel Reeves, will blame the increases on the Government’s inability to “tackle low pay, insecure work and the cost of living crisis”.

She will say: “That has meant thousands more people have been forced to rely on housing benefit to make ends meet.”

Ms Reeves will argue that the best way to get working people off housing benefit is by raising the minimum wage and driving rents down by increasing the supply of affordable housing.

Last night Mark Harper, the Minister for Disabled People, hit back by accusing Labour of bequeathing the government “an out-of-control housing benefit system” and a “culture of dependency”.

He said: “Their system saw some people claiming £104,000 a year of hardworking taxpayers’ money to live in expensive areas. We have capped benefits so no family can claim more than the average family gets by going out to work and we’ve put an end to unlimited housing benefit.

“This is all part of our long-term economic plan to build a welfare system that provides a safety net for those in need, while rewarding the willingness to work.”

Labour voted against the Government’s housing benefit cap, as well as its overall limit on benefits, he added.

The Department for Work and Pensions says the number of jobless housing benefit claimants has fallen since 2010. It argues that it is better for people to be employed, paying taxes and contributing towards their rents, than languishing on out-of-work benefits.

In the latest salvo in Labour’s summer “choice” campaign, Ms Reeves will today accuse the Work and Pensions Secretary Iain Duncan Smith of presiding over “failure and waste” in his department.

Speaking in West Yorkshire, she will claim his flagship Universal Credit programme is “in crisis and needs urgent action”.

She will repeat a call for the rollout of the scheme, under which six benefits and tax credits are merged into one payment, to be suspended for three months to be scrutinised by the National Audit Office.

“Labour wants Universal Credit to work, but we won’t accept more taxpayers’ money being written off and wasted,” Ms Reeves will say.

“If ministers accept our proposals we will support them because it’s the right thing for the country.”