The coalition government's cuts to housing benefit will have a disproportionate affect on people living in high-cost rental areas like York, according to city's Labour housing spokesperson.

Tracey Simpson-Laing said in response to the budget announcement:

"Some people will find themselves dropping out of the eligibility bracket for full rent based on their current rents, and will find themselves having to top up their rental payments out of their own pockets. Whether driving down the cost of rents is the Government's objective I'm not sure, but in areas of high housing demand like York, all this move will do is leave people who are struggling worse off.

"The Government should understand that people claiming housing benefit do so as something they have little choice about, even when they work which one in eight does. I think limiting housing allowances to the 30th percentile of local rents will also worsen housing standards, not improve them which is regrettable to say the least".

The new system will mean people can rent up to a value of 30% of the full range of rents in the area, which for York will be higher than most other areas in the north. Homelessness charity Shelter's Chief Executive Campbell Robb has said that the move will push many households ‘into a spiral of debt, eviction and homelessness'.

"This is what we have come to expect from the Tories, but that doesn't make it any easier for ordinary hard working people to stomach", said Coun. Simpson-Laing. "In the 1980s they were more than happy to see the needy abandoned and for unemployment to be a price worth paying, and now we are seeing a return to the same approach. The only difference this time is that the Lib Dems are jointly driving the targeting of the most vulnerable in swingeing budget cuts.

"It can now no longer be seen as a left of centre party".

Coun. Simpson-Laing said that the shortage of affordable housing means that private sector rentals will remain high, and that people not being able to afford those rents will be pushed onto the waiting list for social housing.

"It will ultimately cost in another way", she said. "Homelessness will become much more of a problem, but the Government will simply wash its hands of the problem and leave it to local councils to sort out. Local councils that have been clobbered in the budget already. More people losing their jobs and a reduction in housing benefit will drive more people to join the council housing waiting list, and increase costs elsewhere, but this will be of little concern to the coalition government".

The budget announcement on local housing allowances will come into force October next year.