The Government has today made a U-turn over plans that could have left low-income families £780 a year worse off, after proposed changes to the Local Housing Allowance (LHA) were scrapped in today’s Pre-Budget Report. 

Quietly sneaked into the last budget was a proposal to claw back £780 per year from some of the country’s poorest and most vulnerable families. At present, households receiving Local Housing Allowance (LHA) are able to keep up to £15 a week if they choose a home with a rent below the maximum payment for their area.  Alistair Darling’s plan to prevent this excess payment being kept by the claimant would have left some of those already struggling to get by on the lowest incomes losing up to 20% of their income. The Government’s own figures calculated that around 300,000 of the poorest households would have been affected.

Commenting on the climbdown, Liberal Democrat Shadow Housing Minister, Sarah Teather who has been campaigning against the Government’s proposed changes, said:

“With an election on the horizon, hundreds of thousands of the poorest families in Britain have today been granted a last minute reprieve. The idea that Gordon Brown could solve the budget deficit by picking on the poorest should never even have been on the table.

“Just as on the 10p tax debacle, Gordon Brown has had his fingers well and truly burnt. This affair should be a warning to Labour that the public will not swallow their knee jerk reaction of swiping money from those at the bottom.”