Page last updated at 21:50 GMT, Tuesday, 9 November 2010

Housing benefit cuts 'may cost taxpayer more'

The government's housing benefit cuts are "potentially devastating" and risk displacing families and increasing homelessness while actually costing the taxpayer money, shadow work and pensions secretary Douglas Alexander has said.

In an opposition day debate on the policy on 9 November 2010, he also compared the package of changes to the poll tax as he urged ministers to "think again".

The Commons motion tabled by Labour acknowledged the need for reform but said the proposals would mean "significant losses for hundreds of thousands of working families and pensioners".

Mr Alexander said 700,000 of the poorest people would lose £9 a week.

"There is a difference between having a duty to act and acting in such a precipitate and reckless fashion that it ultimately ends up costing the taxpayer more," he said

"This package of rushed, ill-considered and potentially devastating cuts have raised real concerns beyond the debates in this chamber in communities across the country.

"In the 1980s the last Conservative government showed us that higher homelessness, like dole queues, actually ends up costing the taxpayer more not less."

He added: "Any of us who recollect the impact of the community charge - where a whole number of poor people started with a small but rapidly accumulating debt, ended up in significant arrears to their local authority, and ultimately local authorities had to write off those debts - would have reason to be very cautious before endorsing the proposals that are being put forward."

But Work and Pensions Secretary Iain Duncan Smith said Labour's motion was "absolutely ludicrous".

Mr Duncan Smith said the current system had created a "landlords' charter to raise rents" which had driven up the cost of housing for the wider population.

"It hasn't done any favours for those on low or marginal incomes. It's done them a great disservice.

"In parts of London, frankly, you can only live in parts of central London if you are on housing benefit or you are very wealthy.

He hit back at claims in October by Labour frontbencher Chris Bryant that the cuts would have the effect of "sociologically cleansing" poorer people from expensive parts of the country.

The policies of the previous government, he suggested, had already "socially cleared parts of London of working people who are trying to earn a living. That's the effect of what they've been doing."

Watch part two of the debate here.

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