PM defends housing benefit caps

David Cameron told opponents of housing benefit caps to "think again" today as he insisted no-one would be made homeless by limiting "extravagant" benefits.

The Prime Minister declined to publicly criticise London Mayor Boris Johnson for likening the potential impact of the policy to ethnic cleansing in the Balkans.

But he signalled that he was determined to press ahead with the curbs and that he believed he had the backing of lower-paid taxpayers for the measure.

Downing Street issued a rare public rebuke to the mayor yesterday, indicating the Prime Minister's displeasure at the mayor's stance and his choice of words.

Asked about the senior Tory figure's comments at a Brussels press conference however, Mr Cameron said: "I do not want to add to what was said yesterday."

There are claims that around 200,000 people could be driven out of areas with high rents as a result of the drive to reduce the cost of housing subsidies.

Labour says it will create ghettos of deprivation, overwhelm services in cheaper areas claimants move to and risks increasing support for the far right.

London is expected to be particularly badly hit by the cap - only one element of a major squeeze of the rent payments - and Mr Johnson further fuelled fears yesterday.

The mayor said he would "emphatically resist" any exodus of the poor from some parts of the capital - calling it "Kosovo-style social cleansing of London".

Although he later said he was quoted out of context, his intervention was seized on by critics of the policy from all sides as proof their concerns were justified.

A defiant Mr Cameron told reporters that the payments were "too high" and had to be pared back as part of the deficit-reduction package of severe public spending cuts.

"Paying over £20,000 a year for the housing benefit of some families is too high. I do not think taxpayers who pay their taxes will understand why we are being so extravagant," he said.

"People pay their taxes knowing that we should be helping to house people, we must be protecting the vulnerable, we must be helping the needy. But frankly they don't pay their taxes to provide housing benefit of £30,000, £40,000, £50,000 to some families.

"The people who oppose this - and I am particularly thinking of the Labour Party - they really do need to think again."

He went on: "There are many people who earn less than £20,000 - their whole income is less than £20,000 - who are paying taxes to house people who are getting rents of £25,000, £30,000, £35,000, £40,000. They don't see that as fair and neither do I."

Plans to cut the social housing budget will backfire and increase overall welfare bills, housing associations warned today.

Government plans to bring social housing rents closer to private sector ones will leave thousands of social home tenants "trapped" on benefits, the National Housing Federation said.

The planned moves include a £400-a-week housing benefit cap for four-bedroom homes and a 10% reduction for the long-term unemployed.

The Government estimates that 21,000 households will be affected by the cap on different size homes - 17,000 of them in London.

But more than 750,000 claimants could be affected by changes to the way Local Housing Allowance levels are calculated.

Labour had already seized on the issue with Opposition leader Ed Miliband seeking to assemble a cross-party coalition of opponents to the cuts by appealing to disgruntled Liberal Democrats.

Housing associations warned today that cuts to the social housing budget will also backfire and increase overall welfare bills.

Government plans to bring social housing rents closer to private sector ones will leave thousands of social home tenants "trapped" on benefits, the National Housing Federation said.

The federation, which represents housing associations, said that if rents for new tenants in the social housing sector are to be increased to around 80% of the amount people would be charged in the private sector, then tenants will have a "powerful disincentive" to work.