News story

Prime Minister's message on 'Welfare Reform'

Official email from the PM about Universal Credit, the benefit cap and changes to housing benefit.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

This message is as an official email from the Prime Minister.

The email reads:

David Cameron hails historic moment of Welfare Reform

Today marks an historic step in the biggest welfare revolution in over 60 years. My government has taken bold action to make work pay, while protecting the vulnerable.

Key elements of this include:

The “Benefits Cap” which ensures no one can get more that £26,000 in benefits (that’s the equivalent of a taxed income of £35,000).  

The “Universal Credit” which will ensure that work always pays more than being on benefit.

These reforms will change lives for the better, giving people the help they need, while backing individual responsibility so that they can escape poverty, not be trapped in it. 

Past governments have talked about reform, while watching the benefits bill sky rocket and generations languish on the dole and dependency. This government is delivering it. Our new law will mark the end of the culture that said a life on benefits was an acceptable alternative to work. 

While we’ve been putting in place a sensible, modern welfare system that protects the vulnerable, our opponents have shown they are on the side of Britain’s something for nothing culture.

We’ve stood up against the abuse that left taxpayers footing the bills for people on £30,000 or even £50,000 a year in benefits. It’s a fair principle: a family out of work on benefits shouldn’t be paid more than the average family in work.

This is a core part of the government’s task of turning around the legacy of debt, overspending and waste we inherited. We want money to go to people who need it, not subsidising the consequences of our broken society. By reforming welfare we will get people into fulfilling jobs, not abandon them to poverty and dependency, save billions of pounds of taxpayers’ money and make sure those who really need help get it.

That’s compassionate modern government in action.

It’s also a huge tribute to the Secretary of State for Welfare, Iain Duncan Smith, who has worked tirelessly and with real moral purpose in tackling the blight of welfare dependency.

Best wishes, 

David Cameron MP Prime Minister

Some key welfare stats

Universal Credit 

Around 2.8 million low to middle income households will be better-off on Universal Credit (UC).  The average overall gain will be £29 per week under UC.

UC will lift around 900,000 individuals out of poverty, including more than 350,000 children and around 550,000 working-age adults.

Government will invest an additional £300 million into childcare support under Universal Credit, on top of the £2 billion already spent under the current system.  Removing the hours rule will mean that around 80,000 more families with children will benefit from childcare support for the first time. 

By October 2017; approximately 12 to 13 million tax credit and benefit claims will be transformed into 8 million Universal Credit payments.

Benefit cap

The benefit cap of £26,000 will mean that no family on benefits will earn more than the average salary of a working family (£35,000 p.a. before tax).

67,000 households will be affected by the cap.

The benefit cap will provide savings of £290m in 2013/14 and £330m in 2014/15 (cash terms) or £275m in 2013/14 and £305m in 2014/15 (at 2011/12 prices).

Housing Benefit

We will set Housing Benefit at a maximum of £400 a week so that we no longer have the scandal of families on benefits living in houses that hard working families could never afford.

Housing Benefit cost over £21 billion in 2010/11 [or nearly £23 billion this year] and, without reform, would increase to £26 billion by 2014/15 (cash terms). The Housing Benefit reforms that we announced in the Emergency Budget and Spending Review will result in annual savings of over £2 billion by 2014/15.

  • Social Sector Size Criteria will stop the practice of the state paying for rooms that are not being used.
  • This will help tackle the social housing shortage that blights many lives in our towns and cities.
  • 5 million people in England alone are waiting for social housing.
  • In London 70,000 households are getting Housing Benefit for extra bedrooms they do not need - costing the tax payer £80 million a year.
Published 1 March 2012