Senior Liberal Democrats have welcomed reports that the Government is planning to delay imposing its controversial cap on housing benefit payments.
The BBC reported that ministers had decided to put back the introduction of the cap – which had been due to start next April – until 2012.
The move was said to be to give existing claimants more chance to adjust their personal circumstances before the cap comes in.
It would also mean that it would not be introduced until well after local crucial government elections in May.
The Department for Work and Pensions (DWP) described reports of a delay as “speculation”, insisting that it was essential that the current system still had to be reformed.
However Lib Dem deputy leader Simon Hughes – one of the strongest critics of the plan – said that he was encouraged by the report.
“Many of us have pressed very hard since the Budget in June for a more gradual and sensitive change in the benefit system,” he said.
“We must await further details, but the signals sound good – the Government is listening.”
The housing benefit cap had been a source of tension within the coalition, with some Lib Dems warning that claimants in London and other high cost areas could be forced out of their homes.
Delaying its introduction would be costly to the Treasury, but the BBC said that it could be offset by bringing forward the cut in housing benefit rates for new claimants from October 2011 to next April.
A DWP spokesperson said: “This is speculation. The truth is the housing benefit system is unfair for those who receive it and the taxpayer that funds it, and we have to put fairness back at the heart of the system.”