22 February 2012 | By Martin Hilditch , Inside Housing

One of England’s leading film directors has accused the government of using benefit reform to ‘cleanse’ central London of poor people because it feels they disfigure the capital.

Ken Loach launched his outspoken attack at an event in the House of Commons yesterday evening, which was set up by a coalition of groups that are concerned about the direction of housing policy.

‘We know [about] ethnic cleansing in other countries,’ Mr Loach said. ‘We have social cleansing here. Whole areas of London are being cleared out of people that they [the government] feel might disfigure it. Social cleansing will go on apace. That is something that should fill us with absolute horror.’The coalition government is introducing a raft of welfare reforms. Changes include the controversial ‘bedroom tax’ which will see under-occupying social housing tenants of working age charged up to 14 per cent of their housing credit if they have one spare room from April 2013, and a total cap on household benefits of £500 a week from the same date.

Inside Housing is this week examining the potential effects of the ‘bedroom tax’ and looking at how social landlords are preparing for the change and what they are doing about underoccupation in the focus on section.

Mr Loach’s strong links to the housing sector date back to the early days of his career when his 1966 film, Cathy Come Home, helped lead to the formation and early success of homelessness charity Shelter.

The Department for Work and Pensions strongly refuted these claims. A spokesperson said: ‘We do not expect large numbers of people to have to move as a result of our reforms and we’ve made £190million available to local authorities to help people who may be affected by the changes.

‘Many working-age families with adults in work cannot afford to live in central London and it is not fair for the taxpayer to subsidise households on out-of-work benefits who do.’

Mr Loach also accused all the main parties of ‘political correctness’ when it comes to housing policy.

‘The politically correct view is that the market will provide,’ he said. ‘It is the market that has delivered all of this chaos and this tragedy for many people. We need to say that we don’t want a market economy, we want a planned economy.’

The event marked the official launch for a new campaign, called Housing Emergency. The campaign is calling for a variety of action on housing policy. It wants councils and other landlords not to evict tenants who fall behind with their rent as a result of housing benefit cuts, councils to reject the opportunity to impose large rent rises this year based on the national rent formula, and national opposition to the government’s flagship housing policy, which it calls ‘affordable rent’ and allows social landlords to set rents at up to 80 per cent of the market rate – instead of traditional social rents.

Along with Mr Loach, MPs Austin Mitchell, Caroline Lucas, Jeremy Corbyn and John McDonnell have signed up to the campaign, along with Ken Livingstone, Defend Council Housing, Housing Justice and the National Private Tenants Organisation.

Katherine Sacks-Jones, policy manager at homelessness charity Crisis, which has not signed up to the campaign, also spoke at the event. She also criticised the government’s housing benefit reforms.

‘Five million people rely on housing benefit and it is being slashed and there really hasn’t been enough thought on what the impact on housing and homelessness is going to be,’ she said.

She said that Cathy Come Home helped housing rise up the political agenda in the 1960s. ‘We need something similar today,’ she added. ‘We need a similar movement bringing people together. Hopefully this evening is part of something [that can do this].’

The DWP says its reforms are about fairness and people making choices about where they live based on their means.