The Liberal Democrats will oppose plans floated by the Conservatives this week to stop housing benefit for the under-25s, according to its deputy leader.

Prime Minster David Cameron confirmed he would be looking at the measure after Chancellor George Osborne outlined plans to find £10bn in welfare savings by 2016.

Speaking on the BBC’s Question Time last night – alongside former housing minister Grant Shapps – Simon Hughes, deputy leader of the Liberal Democrats, said he would not agree to the proposal and nor would party leader Nick Clegg.

He said: "Grant made clear it’s not a done deal across the coalition and I, as proposed and as I’ve heard it, would not agree to it. I’m very clear about that and I’m very clear about it for the sort of reasons that prompt the question.

“I have a mate who works for Centrepoint which is the big charity working with young single people who can’t stay at home and I’ve done a lot of work with him. I asked him for four figures today and he gave me these figures: There are about 385,000 youngsters under 25 claiming housing benefit – 17% are employed – so they use it to top up their employment and if they didn’t have it they probably couldn’t afford to stay where they are living and they would probably have to give up their work. So on that basis, it seems unintelligent. Seven percent are sick or disabled so they’re not going to be able to go to work and half of them have dependent children. Are you really saying that we should be depriving a 23-year-old mum of the money she needs to keep a roof over the head of her two little ones? Lastly, I’m for collecting more money from the people who are very well off in this country.”

He said 1 out of 100 people own about 15% of the wealth in the country with 10% owning half. “Now come on,” he said, “If we want a society where we pay off our debts and cut the money, let’s collect money from those that can afford  to pay, not take money from youngsters who are struggling with all the other pressures when they’re trying to bring up kids and survive."

Quizzed about whether Nick Clegg would agree and make this a dividing issue in the coalition and absolutely refuse, Hughes said: “Nick does agree with me.”

He added: “We have not signed up to cutting housing benefit for the under-25s and I don’t imagine for a moment we will.”

Former housing minister Grant Shapps said it was a proposal for the future. He said: “The bill for benefits and pensions is £200bn – that’s £1 in every £3 that the government spends.”

He said if you’re not in work, you shouldn’t be at an advantage in getting a flat.

He added that “sensible exemptions” would apply – one of which will be for children coming out of care and people with other troubled backgrounds. “I do think it’s right on the balance of fairness to the taxpayer overall that we do check the welfare bill and don’t let it rise inextricably,” he said.

Another former housing minister, Labour’s shadow energy secretary Caroline Flint, said: “I’m afraid this is another one of those ill-thought through policies on the back of an envelope which is about disguising the fact that their economic plan is failing.”

She added that with 1 million young people unemployed “if they think this is the answer it’s an absolute joke”.

She said: “An awful lot of these young people have been in situations where they’ve come out of the care system or they’re leaving abusive situations at home. A large number are parents, some of them are young people that have got on their bike and moved away from home to find work but because the work is so lowly paid, they’re actually having to get supplemented with housing benefit.”