Speaking at a fringe event organised by Moat at the Conservative Party conference in Manchester, welfare reform minister Lord Freud also pledged to examine whether the £500 per week benefit cap could be raised for the 50,000 families who will be most severely affected.

A recent survey led by the National Housing Federation had found that nine in 10 social tenants would prefer their housing benefit to be paid direct to their landlord, rather than receive it themselves as planned.

The NHF has since been leading calls for tenants to be allowed the choice of their benefit to be paid direct to their landlord.

However, responding to this Lord Freud said that the introduction of the ‘universal credit’ was intended to prepare people for managing their finances when in a job and that direct payment of housing benefit formed a key part of this.

He said: ‘I am slightly cynical around this argument. There currently is a choice for tenants, but not a real choice due to the imbalance of power in favour of landlords. [This reform] is not about rolling this around to the convenience of the big batallions.’

Lord Freud also faced a call from influential think tank The Centre for Social Justice, to increase the proposed £500 a week benefit cap for the 50,000 families who will be worst affected.

Gavin Poole, executive director at CSJ, said: ‘There is a significant risk of 50,000 families being very badly affected by the £26,000 a year benefit cap.

‘I don’t want to ask for a wholesale raising of the cap, but those households who are genuine families with two adults and children should be looked at again. We’ve done some calculations and reckon the cap at present for these families is £3,400 light.’

Lord Freud said: ‘We are looking at the cap pretty hard and there will be transitional arrangements. We are looking at a range of issues here, including those people who are most vulnerable.’

The minister also admitted he was ‘worried’ about the IT requirements involved in the implementation of the introduction of the universal credit, but said that he wanted to ensure that demonstration projects on housing benefit changes were not ‘tame little projects’ and would ‘really test the reforms’