Page last updated at 14:51 GMT, Friday, 28 August 2009 15:51 UK

Brown warned over benefit plans

Frank Field: 'There will be a natural revolt on the Labour benches'

The government is being warned it faces a backbench rebellion over plans that would reduce housing benefit for some claimants by up to £15 a week.

Proposals to end the right of claimants who negotiate cheaper rents to keep the difference are under consultation.

About 300,000 people gained from the measure introduced last year. Labour MP Frank Field said ending it was "crazy".

The government says most claimants do not benefit and scrapping it would save £150m but stress it is only a proposal.

Since 2008 new housing benefit claimants have been entitled to get up to £15 a week back - £780 a year - if they find accommodation at a lower rent than the level of housing allowance set by their local authority.

'Bad timing'

The change, a key part of the government's reform of housing benefit, was meant to encourage people on low incomes to shop around for the best deal when looking for rented accommodation.

A proposal to end the measure, included in the Budget, is now under consultation. If approved it would come into force next April, just ahead of an expected general election.

Mr Field, a former welfare minister who led the Labour rebellion against the abolition of the 10 pence tax rate, said the timing "could have been decided in Conservative headquarters".

We are not going to get through this mega-debt crisis which has engulfed the country by these sort of very small cuts in public expenditure
Frank Field
Labour backbencher

He said the savings achieved would be "miniscule" as landlords would simply put up the rent or claimants would stop looking for cheaper deals.

Mr Field plans to put down a motion when Parliament returns in October opposing the measure and expects to get support from other Labour MPs and opposition parties.

"I think there will be a natural revolt on Labour benches if the government tries to push this reform through," he told the BBC.

"We are not going to get through this mega-debt crisis which has engulfed the country by these sort of very small cuts in public expenditure which are clearly immensely important for people at the bottom who have least.

"We need to keep our eye on the big game. I don't think any Labour backbenchers are going to be in the mood to allow the first of these cuts to fall on people who are at the bottom of the pile."

'Very bad politics'

Fellow Labour MP Gisela Stuart also urged ministers to reconsider the move and said she hoped it would be dropped before going to any vote.

"I think it's more a reflection that at the time of the last Budget Treasury officials simply went through every possible way in which they thought amounts of money could be saved and went ahead with that," she said.

Ministers may not have considered the implications for housing benefit claimants and rent levels and should now rethink the policy, she told BBC Radio 4's World at One programme.

"I just think it's A - a policy that won't save much, B - it's a policy that will hit people who are the poorest who we really shouldn't hit, and C - it's just very, very bad politics," she said.

The vast majority of housing benefit recipients do not benefit from this scheme
Department for Work and Pensions spokesman

The Liberal Democrats, who first drew attention to the proposal, said it could reduce some families' weekly income by 20%, money they had come to rely upon.

"I feel very angry about this," said the party's housing spokesman Sarah Teather.

"When I think about the impact on my constituents, £15 will be a huge amount of their income. It seems to be a very cynical move."

And the Institute of Fiscal Studies economist Stuart Adam said the predicted £150m savings would be "a drop in the ocean" in terms of what was needed to rebalance the public finances.

A spokesman for the Department of Work and Pensions said: "The vast majority of housing benefit recipients do not benefit from this scheme and so do not get extra cash back on top of the rent paid".

He added: "This small change will not affect our customers' ability to pay their rent and further support is available to those on a low income to help with other expenses," a spokesman for the Department of Work and Pensions said.

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