Labour claims bedroom tax is 'costing London's poor £50m a year'

The “bedroom tax” is squeezing more than £50 million a year from London’s poorest families, Labour said today.

Unveiling new figures about the Coalition’s most controversial benefits reform, shadow welfare minister Helen Goodman said the average London family affected would lose £1,060 a year.

Some 48,247 families in the capital have had benefits reduced because they have more rooms than they are deemed to need.

The Government has said that it is unfair to taxpayers for people on benefits to live in bigger homes than they need, adding that many working Londoners cannot afford a spare room.

But Labour said claimants cannot easily move to smaller flats because of waiting lists, meaning they end up without enough money to make ends meet. The figures show that Londoners lose more cash than people in any other region because of high rents.

During an election campaign visit to Hendon, Ms Goodman said: “The government has imposed the bedroom tax on families who are already hard pressed to make ends meet and their own studies show that people are having to cut back on household essentials to pay it. Only a Labour government will abolish the bedroom tax.” She said that more than 1.1 million claimants in London were at risk of being affected, including parents whose children might move away, leaving rooms empty, or households where a member could die.

The bedroom tax — officially called the under-occupancy charge — applies to working-age council or housing association tenants on housing benefit. The benefit is reduced by 14 per cent for one “spare” room and 25 per cent for two or more.

Around 160,000 Londoners were on housing waiting lists for single-bedroom properties in 2013, the year the reform took effect.

A Department for Work and Pensions spokesman said the policy was “restoring fairness” as well as saving money.

Official data shows that during the first eight months of the policy, from May to December 2013, nearly 19,000 households (4.5 per cent of the total) moved into smaller homes within the social sector.