FAR fewer people in Southampton have been hit by the Government’s “benefits cap” than expected, new figures show.

Around 200 people in the city have lost out after a limit of £26,000 a year was imposed on claimants across the country earlier this month.

That figure is only two-thirds the number predicted a year ago, when the controversial measure became law – when around 300 were tipped to be affected.

Nobody in Hampshire or on the Isle of Wight has had their benefits capped.

Work and Pensions Secretary Iain Duncan Smith found himself in hot water when he suggested the cap was, in trial areas, already forcing the workshy to look for jobs.

The claim was rejected by the Government’s statistics watchdog, which found there was no evidence of a link between a limit on benefits and numbers finding work.

It has been suggested that the decision to cut benefits in real terms – by imposing below-inflation increases, for three years – has lowered the numbers capped.

The Conservatives have pointed to polling showing the cap is the single most popular change the Government has made to the welfare system.

They also considering a further lowering of the benefits’ limit, with some Tory MPs pressing for a reduction of £6,000 – to £20,000.

The move could form part of a post-election assault on welfare spending, to find the extra £23bn in savings needed after 2015 by cutting spending, rather than raising taxes.

Tory MPs are arguing that a £20,000 cap would reflect the income of those on average wages once tax and national insurance contributions have been deducted.

They say an annual income of £26,000 is the equivalent of a gross salary of £35,000 – more than £10,000 higher than the average Southampton wage.

Other welfare cuts could see child benefit limited to a family’s first two children and housing benefit withdrawn from anyone under 25.

Labour has argued for the benefits cap to be set regionally, to reflect housing benefit – the bulk of most claims – being so much higher in the south.

But it is not clear whether Ed Miliband’s party would lift the cap in the south, to ease the pain where rents are highest – or impose an even tougher cap in the north.