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Proposals for further 10% benefit cap reduction questioned

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Proposals for further 10% benefit cap reduction questioned

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Published by Max Salsbury for 24dash.com in Housing and also in Central Government, Finance

Proposals for further 10% benefit cap reduction questioned Proposals for further 10% benefit cap reduction questioned

A property expert has questioned a think tank's recommendation to cap benefits even further, claiming that such a move "will hit landlords, not layabouts". 

Last week, Policy Exchange called for the government's £26,000 benefits cap to be lowered to £23,400 outside of London and the South East to reflect the lower cost of living – which the think tank claims would save the government an estimated £100 million a year. 

However, Ajay Jagota, of North East-based sales and lettings business KIS, has slammed the proposals, claiming that if benefits are to be regionalised, then taxes must be too. 

Mr Jagota said: "You can’t just pick and choose what government decisions are based on local living costs and which aren’t.

“As superficially attractive as this policy sounds, my fear is it won’t save a penny, it will just push costs elsewhere. When tenants run up rent arrears as their incomes fall it’s their landlords who will pay the price. It could end up with a postcode lottery which hurts landlords, not layabouts. 

“If this really was a problem, wouldn’t the streets of the North East be awash with southern jobseekers, migrating North for an easier life? It’s certainly not something I’ve seen much evidence of." 

So far, the benefit cap, which came into force last year, has had a negligible impact on the government's welfare spending, with official figures showing it has reduced the overall bill by just 0.08%. 

Mr Jagota added: “The real problem in need of tackling is London’s broken housing market, where there are too many people and not enough houses. The North East shouldn’t have to subsidise that, especially when you’re actively making it less appealing for people to move to other parts of the country.”

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