Tories to end council homes for life

The Prime Minister criticised the current system that allows some tenants to pass properties to their children and suggested homes should be assigned on fixed-term contracts so tenants move into private rented homes if they start earning more – releasing council properties for those who need them.

His intervention came as he admitted the Government needed to do more to cut through the gloom and explain why severe spending cuts are being made, insisting there was "light at the end of the tunnel".

In a letter to Cabinet colleagues, he and Deputy Prime Minister Nick Clegg stressed that reducing the deficit and continuing to ensure economic recovery were the priorities as cuts of between 25 per cent and 40 per cent hit departmental budgets.

But as Mr Cameron was seeking to convince voters the pain would be worth it, unions warned of an impending jobs "slaughter" as a result of cuts after the Government's Central Office of Information communications agency announced it was making 287 redundancies – 40 per cent of its staff – because Whitehall's freeze on non-essential advertising and marketing had resulted in a "significantly" reduced volume of work.

Another 325 posts are going at leading defence firm QinetiQ, which supplies the Ministry of Defence, on top of 400 cuts announced last month.

As many as 300 jobs will be shed at the Business Department by the end of September and unions are braced for further announcements in the coming days of redundancies in Government departments.

A senior official at the Prospect union said: "The really bad news is that this is just a foretaste of what is to come – people don't realise the scale of the jobs slaughter that is about to descend on them."

Mr Cameron told radio listeners in the West Midlands that the Government needed to convince voters the cuts were necessary.

"We have got to demonstrate there's a light at the end of the tunnel," he said. "There will be a stronger, better, well-balanced British economy.

"I want Britain to be a great success story of this decade. People need to know there's a prize at the end of this, which is a successful decade for Britain, which is what I'm trying to deliver."

Later he was quizzed by members of the public in the latest of his PM Direct events – first held in Leeds earlier this year – where he signalled the council house shake-up.

"At the moment we have a system very much where, if you get a council house or an affordable house, it is yours forever and in some cases people actually hand them down to their children.

"And actually it ought to be about need.

"There is a question mark about whether, in future, should we be asking, actually, when you are given a council home, is it for fixed period, because maybe in five or 10 years you will be doing a different job and be better paid and you won't need that home, you will be able to go into the private sector."

Housing charity Shelter blamed the "desperate" lack of affordable housing, questioning whether it was right to take away "the only bit of safety and security the poorest and most vulnerable in our society have".