Ambitious plans to scrap housing benefit for working families and replace it with a new tax credit system are set to fan the flames of the welfare reform revolt
Chancellor Gordon Brown signalled that the plans, which he first indicated in the budget, would be included in the housing Green Paper.

He said his plans for the paper would see an end to the poverty trap created by high rents and low wages.

But more MPs have threatened a rebellion over the demise of 100 per cent housing benefit entitlement, as housing experts warned the policy was "fraught with risks".

The new allowance, which housing minister Hilary Armstrong revealed to Housing Today in March (issue 125), would operate like working families tax credit.

Brown pledged it would guarantee working families a minimum income. He told the Institute for Fiscal Studies conference last week: "Taking a job should not put people in danger of losing their homes."

However, the chairman of parliament's All Party Group on Homelessness and Housing Need said Brown would face a rebellion if his reforms left low income families on the breadline.

Andrew Love told Housing Today that scrapping tenants' welfare entitlement to 100 per cent of their rent would be unacceptable, unless it came alongside an improvement of other benefits like income support.

If the green paper - which may be published as soon as July - contained such a move it would "put people who are already living on very low incomes into further difficulties," he insisted. "We really don't see that as a way forward."

Love's comments came after rebel MPs pledged to vote against housing benefit cuts if the government adopted them in the forthcoming green paper (Housing Today, issue 135).

Chartered Institute of Housing policy director John Perry welcomed Brown's proposals, but warned: "There are ways in which the government can put tenants more in touch with what they are paying without withholding part of the support where they get 100 per cent of their rent."

LGA policy officer Gwyneth Taylor said: "There is a danger of certain people slipping through the net and being disadvantaged."

Federation chief executive Jim Coulter described ditching 100 per cent entitlement as "a policy fraught with risks". He said: "Any proposals must be properly piloted, not simply based upon economic theory which looks all very well in Whitehall but doesn't work in Wolverhampton."

Source

Housing Today