No benefit for your third child if you're on the dole: Tories unveil controversial welfare plan

Child-related benefits for the jobless should be capped at two children, the Tory party chairman declared last night.

The move would put them in the same position as working parents who cannot afford to have large families, Grant Shapps argued.

Unemployed parents who then choose to have more than two children ‘will know that welfare is not going to fund that choice’.

As the Government’s £26,000-a-year benefits cap for the out-of-work took effect yesterday, Mr Shapps insisted further radical reforms to welfare were back on the table.

In another proposal, the minister said under-25s who are unemployed should be denied housing benefit, so they have to live with their parents rather than be funded by the taxpayer to move to a place of their own.

He said this would end the current ‘bizarre incentive’ that makes it easier for jobless youngsters to move out, than for those who have to work and save in order to afford to do so.

Mr Shapps insisted the plans could be implemented in this Parliament, despite Lib Dem opposition.

Families living off benefits are currently unfairly freed from the decisions faced by millions of working people, he argued.

More than 12,000 people have moved into work after being told about the new benefits cap, the Government said.

The limit now means couples and lone  parents in England, Scotland and  Wales cannot receive more than £500 a week, while a £350 limit applies to single people.

Mr Shapps said the Tories were now examining further reforms.

By far the most controversial is that unemployed parents with two children could not be given any more support if they decide to have another child.

Under the plan, child benefit, income support or tax credits could be withheld for the extra children.

Mr Shapps also said housing benefit could be removed from 380,000 people under 25, meaning they must join the growing number of young working adults whose financial circumstances force them to continue to live with their parents into their late 20s and 30s. The reform would save £1.8billion.

It is understood Work and Pensions Secretary Iain Duncan Smith has requested time to legislate for more changes in next year’s Parliamentary session.

‘Welfare should not be a way of life,’ Mr Shapps said.

‘A lot of people worry that the way welfare operated under the last government meant claimants were free from taking the difficult decisions you would take if you are in work – none more starkly obvious than when you have children.

‘If you are a working family and you have another child, you know it’s going to mean quite a severe impact on your living costs.

Yet in the welfare system, it’s almost turned on its head, so additional children are actually recognised, with no limit.

‘We need to create a choice for people on welfare which mirrors that which millions of people in work who aren’t receiving state support have to make. It’s only fair to the taxpayer.’

Mr Shapps said the limit could not be applied retrospectively, adding: ‘You would have to say to families with two or more children who go on to have more after that date that they would not get further support.

‘It’s something I would like to see done, or at least considered, in this Parliament.

‘It would send a strong signal to hard working people in this country that we are on their side.’

On housing benefit, he said: ‘A young person who’s out of work is given an advantage over a young person who’s in work when it comes to moving away from their parents because of housing benefit.

‘So there’s a bizarre incentive which means if you’re not in work you can more easily move out and get your own place. This is a matter of basic fairness.’

He also attacked Labour’s ‘absolutely unbelievable’ position on welfare reform.

‘They voted against all our legislation on benefit reform, then suggested they were in favour in some of it after all, and now as it comes in they seem to be against it again,’ Mr Shapps said.

Labour’s welfare spokesman Liam Byrne insisted ministers ‘need to give us a cap that is different in London to the rest of the country because rents in London are that much higher’.

But former Labour welfare minister Frank Field urged his party to accept the £26,000 cap immediately.

He said Labour was ‘struggling to establish some general principles which taxpayers will support with their money’.

‘The key thing is whether in fact people should get more money, and sometimes considerably more money, than if they were actually working, and that’s the principle that the Government has actually introduced,’ Mr Field said.

‘Labour’s job, I think, is to accept this cap and move on quickly to a proactive policy.’

Meanwhile a report by the ‘40 Group’ of Tory MPs argued welfare payments for teenage mothers may encourage them to get pregnant so they can get their own flats.

It suggests they should instead be supported by their parents or given supervised hostel accommodation.

Source: Daily Mail