Thousands of poorer households in the Eastlondonlines area are to be hit by a new benefit cap, according to the Government impact assessment.
The cap, which comes into force this week, means that the total annual amount that a household in London can claim in benefits is reduced from £26,000 to £23,000, which equates to a reduction of around £50 a week. For single people without children, the new limit is £15,410.
1,200 households in Hackney will have their benefits cut, as well as 600 in Lewisham and 700 in Croydon.
Jim Fitzpatrick, MP for Poplar and Limehouse, told Eastlondonlines: “The Tories have not changed their tune on punishing some of the most vulnerable in our society. Official DWP figures show that 900 families in Tower Hamlets will be hit by the Housing Benefit cap alone.”
“The true effect of this cut means that some households will be choosing whether to feed themselves or warm their home over winter, a decision no family should have to contemplate,” he continued.
Those to be worse affected are likely to be Londoners paying high rent, which is not even covered by their housing benefit in the first place.
The original cap of £26,000 was originally introduced by the coalition government in 2013, and the latest reduction represents a small part of the £12 billion of cuts to welfare to be made in this parliament.
Working 16 hours a week exempts someone for the cap, but those like single mothers who don’t have the time to do so could be unable to pay their rent.
Damian Green, Secretary of State for Work and Pensions, argued that the cap helps lift people out of poverty and back into work. New figures show that almost 23,500 households who previously had their benefits capped have moved into employment.
However, the Institute of Fiscal Studies estimated that the lower cap will increase the number of households affected in London from 8,000 to 19,000.
Fitzpatrick was one of many Labour MPs who abstained on the vote in July 2015. Others included Jim Dowd, Heidi Alexander (Lewisham), Vicky Foxcroft (Lewisham), Steve Reed (Croydon), Rushanara Ali (Tower Hamlets), and Meg Hillier (Hackney).
Then interim leader Harriet Harman had called for Labour MPs not to to oppose the bill in July, and Labour eventually defeated the government on working tax credits in the autumn.
Fitzpatrick said he supported the acting leader’s decision to abstain at the time. He was in favour of elements of the bill that sought to strengthen particular benefits but was against the overall reduction.
A statement by welfare experts Policy in Practice, who has been aiding Croydon Council adjust to the cap since 2013, said: “For a large number of residents affected by the cap, sustaining and managing their finances will become increasingly challenging.
“An increase in rent arrears and subsequent evictions are likely to be reflected in higher number of homelessness applications and demand for temporary accommodation, putting councils’ resources under strain.”
Rent arrears is a growing issue for London, and Moira Griffiths from housing association Family Mosaic told Eastlondlines they were already experiencing a worsening of the problem because of the transition from Housing Benefit to Universal Credit.