“The figures show that the real terms increase over the last five years was 50 per cent, not 18 per cent.”
Work and Pensions Secretary Iain Duncan Smith, House of Commons, 9 November 2010
Cathy Newman checks it out
Iain Duncan Smith accused Labour of “manic rabble-rousing” over the housing benefit cuts. Unfortunately for the Work and Pensions Secretary, some of the rabble roused to rebel over the issue include his own side. A junior member of the government, Jenny Willott, stood up and spoke out against the cuts this afternoon. But as Mr Duncan Smith tried to drown out the noises off, did he get his sums wrong? Over to the team to investigate.
The analysis
Trading statistics was the order of the day when Douglas Alexander and Iain Duncan Smith went head to head in the Commons. Since the recession started the housing benefit bill has gone up by 21 per cent, mainly fuelled by an increase in an 18 per cent increase in the number of claimants. The housing benefit bill ballooned much more than that, Iain Duncan Smith retorted, as a result of changes the Labour government made.
So who is right?
Well, there is an element of truth to both. Figures from the Department for Work and Pensions shows that there are an additional 661,000 more housing benefit claimants of working age since 2007/8 (an increase of 26 per cent) and 83,000 more pensioners claiming, overall meaning 744,000 more people are claiming housing benefit than before the recession, or 18 per cent as Douglas Alexander stated.
He is also right to say that the actual spend on housing benefit went up by £4.625bn over the same period (at 2010/11 prices), a rise of 21 per cent.
So where does Iain Duncan Smith’s 50 per cent increase come from? In 2005/6 the total housing benefit bill stood at £15.859bn, and is now £21.519bn – an increase of 26 per cent over the period Mr Duncan Smith states. But five years before then the bill was £14.439bn (in 2010/11 prices) – a difference of 33 per cent.
But if you go back ten years an look at the “nominal” amounts (the actual amount at the time, not adjusted for inflation) you get the difference between £11bn and £22bn (rounding the numbers to get a slightly bigger gap) and so the 50 per cent.
We have to acknowledge that the point Mr Duncan Smith was trying to make was correct – a Building and Social Housing Foundation report released last month found that, before the recession, the increase in housing benefit bill was due to increased rents. But, the report found, around 70 per cent of the increase in housing benefit expenditure between November 2008 and April 2010 was a result of higher claimant numbers.
The verdict
So Mr Duncan Smith’s point was broadly right, but we feel we have to send him back to study his figures a bit more carefully next time.
