Introduction

Like other major developed world cities, London presents a paradox of inequality in that it contains a disproportionate share of the most affluent and wealthy, as well as a large number of people who are unemployed, poor or on a low income. The existence of poverty in London is well known (Hamnett, 2003; MacInnes et al, 2011). What is less well known in mainstream academia is how the poor survive day to day. In the 19th century many of those who were unemployed, sick or poor would have struggled to get enough to eat, to rent basic accommodation or even just to survive. The alternative was the workhouse. But after the Beveridge report and the development of the modern British welfare state since 1947, unemployment, disability and poverty have not condemned these groups to near starvation levels. Instead, they are now supported by a large number of different welfare benefits, ranging from pensions and child benefits to Jobseeker's Allowance, housing and incapacity benefits, which collectively added up to £200 billion in 2012. In 2010, however, the Coalition government announced its intention to radically cut welfare benefits. This chapter specifically focuses on the impact of some of these cuts, particularly the impact of both the Housing Benefit cap and the general benefits cap, both of which are discussed in more detail below. It is argued by critics of the cuts that they are likely to displace significant numbers of low-income households, potentially running into some tens of thousands, from the private rented sector in central and inner London. In this respect we look in particular at government welfare cut-generated residential displacement.

The significance of these cuts highlights the fact that no discussion of world or global cities can be complete without analysis of the role of government and state spending and taxation. Contrary to some claims made by global city theorists, the state and national politics, as well as global capital, has a big impact on living conditions and living standards in global cities. While it could be argued that welfare spending cuts are an inevitable response to the global financial crisis and a climate of austerity, this is questionable, and it can be strongly argued that they are, in fact, a result of local political choices and decisions that we should not see as inevitable (Peck, 2012; Hamnett, 2014).