Forty thousand people will be made homeless as a result of the government's welfare reform plans according to a leaked letter intended for Downing Street.

The letter from local government secretary Eric Pickles' private secretary warns that there were "very serious practical issues" with the decision to cap benefit payments at £26,000.

These issues included a potential that the plan would cost more money than it saved and increase homelessness by 20,000 on top of the 20,000 already anticipated due to other changes to housing benefit.

Labour is expected to attempt to force Eric Pickles and work and pensions secretary Iain Duncan Smith to answer an urgent question on the issue today in the Commons.


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