Andrew Grice writes in The Independent – The cap on the amount in benefits that can be claimed by one family will be reduced to £20,000 a year outside London and £23,000 in the capital.
George Osborne will announce the further squeeze, which will affect another 90,000 households in the UK, in his budget on Wednesday. The Conservatives’ election manifesto pledged to reduce the current £26,000 cap to £23,000 nationally.
The Chancellor said yesterday: “It is not fair that people out of work can earn more than people in work so we are going to cut the benefit cap, as we said in our manifesto, to £23,000 in London. It will be lower in the rest of the country.”
He will point out that someone in work needs to earn £34,000 before tax to take home £26,000. People would need to earn £29,000 pre-tax to bring home £23,000 and £25,000 to take home £20,000. In London, two in five households earn less than £23,000.
Mr Osborne believes the introduction of the £26,000 cap has not resulted in the “ethnic cleansing” predicted by critics, who have warned that people would be forced to move to a less expensive areas.
Government figures show that more than half the households affected by the cap were not caught by it 18 months later. Of those, 40 per cent had moved into work.
The Chancellor will extend a scheme under which local authorities can provide discretionary help to claimants with their household costs. The cap does not cover benefits for the sick, disabled or pensioners.