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Benefit payments cap rollout begins in London Benefit payments cap rollout begins in London
(about 2 hours later)
A government-imposed cap on many benefit payments nationwide is beginning in four London boroughs.A government-imposed cap on many benefit payments nationwide is beginning in four London boroughs.
Couples and lone parents in Haringey, Enfield, Croydon and Bromley will not receive more than £500 a week while a £350 limit applies to single people.Couples and lone parents in Haringey, Enfield, Croydon and Bromley will not receive more than £500 a week while a £350 limit applies to single people.
The cap is set to be imposed across England, Scotland and Wales between July and September.The cap is set to be imposed across England, Scotland and Wales between July and September.
Jobseeker's allowance, income support, child and housing benefit count towards it, but not disability benefits.Jobseeker's allowance, income support, child and housing benefit count towards it, but not disability benefits.
The move is part of efforts to cut spending; the amount is said to reflect the average working household income. The cap, which is not yet law in Northern Ireland, is said to reflect the average working household income.
'Difficult choices''Difficult choices'
Employment minister Mark Hoban told BBC Radio 4's Today programme: "People want to see a benefits system that's fair, affordable and gets people into work. And we are seeing that." Ministers say welfare spending needs to be reduced and people want to see a system that is fair, affordable and helps people into work. They claim that the threat of the introduction of the cap has already spurred 8,000 claimants who would have lost out to find jobs.
He added: "This is about fairness. There are people in this country making difficult choices about where they live and who don't claim housing benefits." Speaking on the BBC Radio 4's Today programme, employment minister Mark Hoban said that if people want to escape the benefits cap "the best way to do it is to move into work".
"If they want to escape the benefits cap, the best way to do it is to move into work," Mr Hoban said. And, in a message on Twitter, David Cameron hailed "a big day for welfare reform as we pilot a cap on benefits equal to the average wage" - adding "amazingly Labour oppose it".
The cap is not yet law in Northern Ireland.
The Department for Work and Pensions says about £90bn was paid out in benefit payments to people of working age and their families in 2009-10. It hopes the cap will save about £110m a year.
Jobseeker's allowance, income support, child benefit and housing benefit are on a long list of payments which count towards the calculation of the cap, which is expected to see cuts of about £90 a week on average for the 40,000 households affected.Jobseeker's allowance, income support, child benefit and housing benefit are on a long list of payments which count towards the calculation of the cap, which is expected to see cuts of about £90 a week on average for the 40,000 households affected.
Sarah Burns, a single mother, told the BBC she would lose about £90 of the more than £500 she receives every week.Sarah Burns, a single mother, told the BBC she would lose about £90 of the more than £500 she receives every week.
She said: "Obviously we will have to cut down on shopping bills. And we'll have to cut our use of gas and electricity. It's really that serious.She said: "Obviously we will have to cut down on shopping bills. And we'll have to cut our use of gas and electricity. It's really that serious.
"Activities that the children do, like school trips and scout cubs, I probably won't be able to afford anymore.""Activities that the children do, like school trips and scout cubs, I probably won't be able to afford anymore."
People on disability benefits will be exempt from the cap. To encourage people to seek work, ministers have decided that people with a job who receive Working Tax Credit will also not be affected.People on disability benefits will be exempt from the cap. To encourage people to seek work, ministers have decided that people with a job who receive Working Tax Credit will also not be affected.
Ministers claim that the threat of the introduction of the cap has already spurred 8,000 claimants who would have lost out to find jobs. The Department for Work and Pensions says about £90bn was paid out in benefit payments to people of working age and their families in 2009-10. It hopes the cap will save about £110m a year.
'Hard cases''Hard cases'
Business Secretary Vince Cable told BBC Radio Tees that he believed "most people" agreed with the "basic principles" of the changes - that no-one should be getting more in benefits than the average wage of someone in employment.Business Secretary Vince Cable told BBC Radio Tees that he believed "most people" agreed with the "basic principles" of the changes - that no-one should be getting more in benefits than the average wage of someone in employment.
But he added: "These reforms are very controversial and some people are going to get hit unfortunately. Inevitably you will get hard cases. You have to create some support for the hard cases so we don't have real difficulty". But he added: "These reforms are very controversial and some people are going to get hit unfortunately.
But Jonathan Portes, director of the National Institute of Economic and Social Research and a former chief economist at the Department for Work and Pensions, said there was "no evidence at all" that the cap had affected people's behaviour. "Inevitably you will get hard cases. You have to create some support for the hard cases so we don't have real difficulty".
Labour argues that a better way to cut the benefits bill would be to offer guaranteed jobs to the long-term unemployed. Labour leader Ed Miliband said the welfare bill was rising not falling.
Shadow work and pensions minister Stephen Timms said: "For all the Tory rhetoric, the true picture of this government is one of economic failure. "The first thing the government should be doing to reform welfare is to put people back to work and offer people real jobs with real responsibilities," he said.
"They are having to borrow £245bn more than they planned, not to pay for the investment needed to grow our economy, but to pay for more welfare spending caused by high unemployment." "We've said we're in favour of a benefit cap but it has got to be adjusted regionally depending on housing costs in each region. The danger of the way the government is doing the cap is that it forces people into temporary accommodation, bed and breakfasts, which drives up costs not reduces them."
The TUC said it was wrong to suggest the cap had spurred people into finding work and it was asking the statistics watchdog to determine whether ministers had "misused" information.
"The government's own analysts say that 16,000 fewer people will be affected because ministers have changed the rules about who is eligible, not because of any change in behaviour," said its general secretary Frances O'Grady.
And Jonathan Portes, director of the National Institute of Economic and Social Research and a former chief economist at the Department for Work and Pensions, said there was "no evidence at all" that the cap had affected people's behaviour.