The Department for Work and Pensions (DWP) could cut Local Housing Allowance (LHA) rates for the first time since 2024 if the Conservative Party wins the next general election, under plans announced by party leader Kemi Badenoch.
In a speech delivered on Thursday, September 3, Badenoch outlined a package of sweeping benefits cuts designed to reduce the welfare bill by £10bn per year. The proposals build on existing Conservative pledges to cut welfare spending by £23bn, according to the party.
Planned savings and housing benefit reforms
The Conservatives have promised to save £3.1bn by reimposing the two-child benefit cap, stop the £1bn annual increase in the British Business Bank’s industrial strategy capital, and save £1bn by ending VAT exemptions for Motability vehicles.
In addition, the party wants to save at least £4bn through reforms to housing benefit, which includes a plan to cut Local Housing Allowance rates. These rates are used to calculate housing benefit for private tenants and have been frozen since 2024, meaning they do not cover the rent for the vast majority of homes, as reported by The Guardian's Peter Walker.
Badenoch defends welfare cuts
During her address, Badenoch said: "When I was in government, defence spending went up when I joined the cabinet in 2022. But we have to be honest, defence spending went down every year from 1989 until 2022. We were spending the peace dividend from the Cold War era. That era is now over."
She added: "Welfare is a safety net. It is not a lifestyle. Our welfare bill is running out of control. So I want GB news viewers to be very reassured. We have done this before and we can do it again."
Labour responds to Tory proposals
A Labour spokesperson responded: "Dodgy Tory economics won’t fund Britain’s defences. The British people won’t forget Kemi Badenoch’s Conservatives hollowed out our armed forces and blew holes in the UK’s proud international reputation."
The spokesperson continued: "This proposal uses the same money they’ve already spent on other things and appears to break the Tories’ so-called golden economic rule. This is just days after Kemi Badenoch promoted a key architect of the Liz Truss mini-Budget as her shadow chancellor. It’s the same old Tories – they haven’t listened and they haven’t learned."
The proposals come at a time when the welfare bill is under intense scrutiny, with the Conservatives positioning themselves on fiscal discipline ahead of the next election. The exact details of how the LHA rate cuts would be implemented have not yet been fully specified, but the party has indicated that housing benefit reform is a priority area for savings.
