Detail from front page of Observer newspaper
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Benefit cut plans warning from government office

A government department warned Downing Street that plans to cap benefits could result in 20,000 people in the UK being made homeless, it has emerged.

A letter from the office of Communities Secretary Eric Pickles in January said this meant the proposed £500-a-week cap could cost more than it saved.

The letter said other benefit changes could uproot a further 20,000 people.

Mr Pickles' spokesman said he fully supported government policies but Labour said this was not "good enough".

Gary O'Donoghue reports.