The minister, who was replying to a Lords debate on affordable housing on 8 July 2010, said the review of housing benefit had, like cuts to the budget of the Homes and Communities Agency, been "based on the economic situation".
Welfare benefits are also being cut and in a rocky housing market where more people are losing their homes, the budget for social housing is being cut by 60%.
Campbell Robb, chief executive of Shelter, urged the government to use next month's Budget to unlock the finance to deliver more affordable family homes.