Monday 14 October 2013 7:08 am

Almost a third of Londoners in poverty according to think tank

Almost one third of Londoners are living in poverty, according to new research conducted by the New Policy Institute. The study shows that 28 per cent of all Londoners are living in poverty, seven percentage points above the national average. The survey commissioned by Trust for London uses the official definition of poverty, a household with an income less than 60 per cent of the national median income. Out of the 20 English local authorities with the highest rates of child poverty, London has seven.

The capital is suffering from an unemployment rate of seven per cent and youth unemployment of 25 per cent. The cost of living is major factor driving the results of the survey. The average monthly rent in outer London is £950 and in central London £1,300, this compares with the English average of £475. A quarter of all households in London now rely on housing benefit to meet accommodation costs, with average housing benefit in London of £134 per week compared to the English average of £94 per week. London contains 16 per cent of the poorest decile nationally and 17 per cent of the richest decile. The Number of people in in-work poverty has increased by 440,000.

The report did contain some positive numbers for the capital. The number of pensioners in poverty fell by 110,000 and the number of children in workless families in poverty fell by 170,000. 57 per cent of adults and children in poverty are now living in working families. Premature mortality rates for both men and women were down by a third over the last ten years to 187 and 115 per hundred thousand respectively.

Commenting on the report, Trust for London chief Bharat Mehta said:

London's economy may be doing better than the rest of the country but that obscures the fact it has the highest poverty rate.

Londoners are trying hard but are getting stuck; with many being impacted by high housing costs and housing benefit reforms, unemployment and low pay.

To tackle London's poverty and inequality, policymakers must focus on solutions such as building more affordable housing and encouraging employers to pay a Living Wage.

Many groups have advocated a living wage as a partial solution to the problem of living standards in London, however fears have been raised that a mandatory living wage could lead to greater unemployment, particularly amongst the young and the unskilled. The Adam Smith Institute has instead advocated raising the personal allowance and pegging it to the minimum wage.

By raising the personal allowance workers will benefit from a substantial tax cut without the negative effects of higher unemployment which may result from an increase in the minimum wage.