Row over relocating job seekers

Work and Pensions Secretary Iain Duncan Smith said he wanted to tackle "ghettos of poverty" by encouraging people to move elsewhere. He also signalled a crackdown on "under occupation" of council housing – insisting too many pensioners were living alone in large properties.

Labour said the comments echoed the words of then-Tory Minister Norman Tebbit in 1981 when he suggested the unemployed should "get on your bike" and look for work. The party accused the Government of "giving up" on efforts to boost unemployment in economic blackspots.

But Mr Duncan Smith, the MP for Lord Tebbit's former parliamentary seat of Chingford, said millions of people were "trapped in estates where there is no work" and could not move because they would lose their accommodation.

The proposed scheme would allow them to go to the top of the housing list in another area rather than giving up their right to a home. "In the UK today, under the last government, we have created almost ghettos of poverty where people are static, unable to get work because there isn't any work there, unable therefore to get to work because the wages aren't high enough so they can't get there and they are stuck," he said.

"And you've got two and three generations of people, unemployed, in households and while there's been more work created over the last 15 years actually most of that has gone to households that already have work."

Outlining his plans, Mr Duncan Smith said the middle classes were able to use their home as a "portable asset" which could be sold or rented out if the owner moved to a new location for work.

"Why is it for a group of people on low incomes we leave them trapped rather than give them that same portability?" He said the plan was "not threatening people" to move but "trying to help them find a way out".

Mr Duncan Smith added that there would also be measures to tackle "under occupation" of large council homes. "We have tons of elderly people living in houses which they cannot run and we've got queues of desperate people with families who are living in one and two-bedroom houses and flats," he said.

Councils could be given more money in a hardship allowance to help families relocate, "to smooth this over, to encourage people to move".

Chancellor George Osborne, attending the G20 summit in Toronto, Canada, insisted the plans were "sensible".

A major shake-up of housing benefit and increased health checks for disability claimants were announced last week as part of the biggest cuts in public spending for decades.

Ministers will unveil measures in the coming weeks to "make work pay", including changing the threshold at which claims are withdrawn so people who take work do not lose all their benefits.

Shadow education secretary Ed Balls said the plans were a retreat "back to the 1980s".

"It's this idea that somehow the only solution to unemployment is to cut benefits and say to people 'go and do it for yourself' and we know this just doesn't work."