Recently the government's think-tank, Policy Exchange, is advising that the benefit caps should be reduced by a further 10 per cent for the rest of the country, outside of London and the South East.

The benefits cap at present is £26,000 per year and Policy Exchange says that the rest of the country's lower cost of living should reflect this and that the cap should now be £23,400. It estimates that this should save the government in the region of £100 million per year.

A property expert is flummoxed by the recommendation and says that if this is implemented then it "will hit landlords, not layabouts".

Mr Ajay Jagota, of North East-based sales and lettings, is shocked by the proposal and says that if this does go ahead then they should regionalise taxes as well.

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."

Despite the introduction of the benefit cap, it has had little impact on the government's spending for people on welfare. In fact it has only saved the government a paltry 0.08 per cent off of the yearly spend.

Mr Jagota commented further: “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.”