BIG cuts in housing benefit are designed to prevent private landlords ripping off the taxpayer, the Government said yesterday.
A minister defended the controversial shake-up – which will slash weekly payments for a typical Liverpool home by £11.44 – by insisting he would no longer sign a "blank cheque".
Steve Webb, a Liberal Democrat, said the £21bn annual housing benefit bill had been "rising inexorably" under Labour, increasing by a staggering 50% in just five years.
And he told MPs: "Year after year, another billion, another billion – and soon you are talking serious money.
"What we can't do is go on simply signing over a blank cheque to private landlords. This isn't a blank cheque to tenants, it's a blank cheque to private landlords.
"Rents have been going up and the state has been a passive observer. The housing market has demanded cash from us and we have handed it over. Then they have demanded more – and we have handed it over again."
The clampdown will dramatically cut the maximum payments of local housing allowance, claimed by tenants on housing benefit in private accommodation.
Instead of being set at the “median rent” in the area concerned – around 50% of the highest rent charged – the cap will be cut to just 30%, from October next year. According to figures produced by the Valuation Office Agency (VOA), landlords will be forced to accept a big cut in rent payments – or evict tenants on housing benefit.
Across the Greater Liverpool "rental market area", taking in Liverpool, Knowsley and most of Sefton, the new weekly cap for a two-bedroom home will be about £103.56 – down £11.44 on the maximum available this month.
There will also be big cuts in the two-bedroom cap in Southport (£115.07 – down £10.93), in Wirral (£103.56 – down £10.36) and in West Cheshire (£115.07 – down £11.51).
Charities and Labour MPs, who packed out a Commons debate yesterday, have attacked the shake-up for threatening vulnerable people with homelessness and poverty.
Helen Goodman, the party's benefits spokeswoman, said: "Pensioners, single people, families with children across the country will all be subjected to cuts that may force them to move or end up homeless.
"In some places, the cuts will be huge. A single person in a one- bedroom flat in St Helens will lose £800 a year. Those figures are disgraceful."
But Mr Webb insisted the cap of 30% of the highest local rent had not been "plucked from the sky", but was the typical figure that a low-income worker could afford.
And he said: "Why should our constituents who take a low-paid job, with all the uncertainties associated with it, be in a worse position than those who are unemployed?"
