The next phase is rolling back on housing benefit for unemployed people:
http://harpymarx.wordpress.com/2008/10/01/review-of-housing-benefit/
Traditionally if you are unemployed or sick, you get some money towards your rent as a separate housing benefit. It is rather logical that people who have no source of income will need help paying their rents. But now the government is moving towards statements that 'Housing Benefit could be a disincentive towards work" etc.
The housing benefit system has always been a rather odd system, rather than pay the full amount, the Council decide what is the "fair rent" which is usually between 10 or 20 quid less than you pay.
(the concept of 'fair rent' only exists in the paying of benefits, as central gov and councils no longer do anything to force private landlords to charge a fair rent)