MERSEY landlords have made “excessive gains” out of housing benefit and must slash their rents, a government minister said yesterday.

Lord Freud spoke out as ministers launched an extraordinary attack on the Archbishop of Canterbury for criticising the housing benefit cuts – accusing him of ignorance and of “jumping on a bandwagon”.

Rowan Williams said the cuts – which threaten 36,000 families across the Merseyside area with eviction – could lead to “social zoning”, forcing poorer families out of wealthier neighbourhoods.

But Lord Freud, the welfare reform minister, insisted mass evictions simply would not happen, accusing the policy’s critics of “hysteria and exaggeration”.

Instead, he turned his fire on private landlords, who he claimed had enjoyed a bonanza from housing benefit at the taxpayer’s expense. Lord Freud said: “We saw rents going down because of the recession and yet we saw housing benefit payments going up. It is a bill that is out of control.

“We think we can put pressure back on the system to reverse some of the excessive gains. A lot of landlords will feel the pressure, but people won’t see much coming out of their pockets.”

The clampdown will dramatically cut the maximum payments of local housing allowance (LHA), claimed by tenants on housing benefit in private accommodation.