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22 December 2014

The benefit cap is making central London a no-go zone for low income families

Families who have lived their whole lives in central London are being forced out by a perfect storm of falling wages, rocketing house prices and government cuts.

By FIona Twycross

Tough talk. That’s what we heard from Boris Johnson back in 2010 when his colleagues in Government proposed a cap on housing benefit – a policy everyone knew it was designed to hit London hardest.

It’s not often I quote the Mayor positively but it’s worth reproducing his 2011 defence of London’s poorest in full:

The last thing we want to have in our city is a situation such as Paris where the less well-off are pushed out to the suburbs. I’ll emphatically resist any attempt to recreate a London where the rich and poor cannot live together. What we will not see and we will not accept any kind of Kosovo-style social cleansing of London. On my watch, you are not going to see thousands of families evicted from the place where they have been living and have put down roots.

Tough talk indeed. But the problem with tough talk is that you need to follow it up with actions – an area where Boris has utterly and consistently failed throughout his mayoralty. The result is nothing short of devastating to those he has promised to support and protect.

This week the emptiness of Boris’ pledge to those hit by the benefit cap was laid bare. Analysis of Department for Work and Pensions data shows a 27 per cent drop in the number of private renters claiming housing benefit in central London since the introduction of the housing benefit cap. Over a quarter of the families he pledged to protect, forced out in only three years.

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Despite the Mayor’s pledge that families would not be evicted from the areas they know and live, the figures strongly suggest low income families are being forced out of central areas en masse as a result of rising rents and cuts to benefits.

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Overall the number of privately rented households claiming housing benefit in the central London boroughs of Camden, City of London, Islington, Kensington and Chelsea and City of Westminster has dropped by 27 per cent, or 5,972 households, since the cap on Local Housing Allowance was introduced in April 2011. By contrast the number of claimants in outer-London boroughs has increased 9 per cent by 14,883.

Iain Duncan Smith argues that the figures must be a sign of success – they don’t mean people are being pushed out, just that these people must not claim benefits anymore because they all have better paying jobs. Totally ignoring the fact that in outer London, the number of claimants has increased. As one expert said to me, there’s not much chance employment has only gone up in the high rent areas.

Since 2011 private sector rents in London have increased by 21%, by contrast the benefit cap has increased by only 3 per cent over the same period. Whilst it is clear that the housing benefit bill needs to be reduced, this should be achieved in a fair and humane way, not by driving people on low incomes out of their homes. We need to address the route causes of high housing benefit spending by building more homes and creating more decent and better paying jobs.

The Mayor promised that low income families in London wouldn’t be forced out – these figures make clear that is a promise he has broken. Families who have lived their whole lives in central London are being forced out by a perfect storm of falling wages, rocketing house prices and government cuts.

As was always predicted, some might say intended, the rising cost of living and the housing benefit cap have hit the capital hardest pushing a quarter of low income households out of central areas. The Mayor’s failure to effectively stand up for London as he promised has had not only a devastating effect on those individual households, it’s resulting in the loss of London’s mixed communities and putting additional pressure on the outer London boroughs facing the influx. If the trend continues, central London will become the reserve of the privileged, a no-go zone for lower income families. That shouldn’t be an acceptable outcome for anyone.

Fiona Twycross AM is Labour’s Economic Spokesperson on the London Assembly