£4bn housing benefit cut: where it falls and who is exempt

Kemi Badenoch has confirmed the Conservatives want to take £4bn out of the housing benefit bill to help pay for defence spending, and has denied the plan would push people into homelessness. Speaking to BBC Radio 4's Today programme, the Conservative leader said existing tenants would be protected, but accepted that some claimants living in expensive areas would need to "move somewhere cheaper".

The party has set out where the £4bn would come from. At least £2.2bn would be saved by freezing rents in the social sector, which means removing the annual increases currently linked to inflation. A further £1.8bn would come from lowering Local Housing Allowance rates, the figures that decide how much private renters can claim, for new tenancies only. For people already in a tenancy, rates would be frozen rather than cut, and left to fall gradually into line over time.

Badenoch said pensioners would be exempt and existing tenants would not be affected. The people most exposed, on the party's own description of the policy, are those signing a new private tenancy in an area where rents are high, because the Local Housing Allowance rate for that area would be set lower than it is now.

Local Housing Allowance is not a single national figure. It varies by council area and is based on private rents locally, so the size of any cut would depend on where a household lives. Housing benefit itself goes to people who are unemployed or on a low income to help cover rent.

The bill has grown fast. According to the Department for Work and Pensions, housing benefit is forecast to cost £39bn this year, and the number of people eligible to claim has risen by more than a million since 2020, driven by the soaring cost of private rents.

Defending the plan, Badenoch said: "Without national security, there aren't going to be any benefits." She told BBC Breakfast that people should aspire to live where they want, but "you shouldn't aspire for the government, i.e. other taxpayers, to pay for you to live wherever you want to live". She added: "We're not removing people from homes."

Critics dispute that. Karen Buck, chairwoman of Generation Rent and a former Labour MP, said the proposals would bring "homelessness, temporary accommodation costs crippling local councils, renters in severe financial hardship". Shelter called the idea of moving somewhere cheaper "unrealistic", with campaigns director Mairi Macrae saying families "would still struggle to find a home they can afford, no matter where they live". Andy Burnham argued the cut would create homelessness on a scale not seen before, with hundreds of thousands of children in temporary accommodation.

None of this is law. The cuts are a Conservative proposal, part of a wider package to reach 3% of GDP on defence by 2030 that also includes reimposing the two-child benefit cap scrapped by Labour in April. The Prime Minister said he would bring the welfare bill down instead through council housebuilding, help for young people into work and more mental health support, with a target date for defence spending due in the spring spending review.

For renters, the practical point is simple. If you are already in your home, the plan as described would not cut your payment today, though freezing it while rents rise is still a real squeeze. If you have to move, sign a new tenancy or set up a first home, you could be offered less help than someone in an identical flat next door. That is the gap worth watching before any of this gets near a vote.