A law brought in to avoid people having to sleep on the streets was operating as a short cut to the top of waiting lists and undermining Conservative family values, he told the Tories in Blackpool.
'We must ask ourselves whether the signals sent out by this legislation sit comfortably with the values we share; with the self-reliant society we want to promote,' he told conference representatives.
'How do we explain to the young couple . . . who want to wait for a home before they start a family . . . that they cannot be rehoused ahead of the unmarried teenager expecting her first, probably unplanned, child?
'How do we explain to parents that if their children stay at home they may have a long wait before they are rehoused? But if they evict their children they may go to the top of the queue and get secure accommodation? What signal about family responsibility does that send out?'
The changes will also mean that newcomers to an area who are statutorily (unintentionally) homeless will lose their priority over people who have been on the waiting list far longer.
Sir George said people who had special housing needs because of age or illness and young people leaving local authority care would remain priority categories.
He said afterwards that in London the only way to secure a council home was for people to make themselves statutorily homeless.
'I want to restore discretion to local authorities, having established a safety net below which no one will fall.'
Sue Slipman, director of the National Council for One-Parent Families, said: 'If we don't want to see families on the streets they are going to have to have a very careful set of strategies.
'If government does want to see families that are independent and responsible for their children you have got to let them grow up. Keeping mothers in mother and baby hostels does not encourage them to grow up.'
The housing campaign group Shelter greeted the announcement of the plans to reform homelessness legislation with dismay.
Sheila McKechnie, director of Shelter, told a fringe meeting that the Government was proposing an alternative housing rationing system. 'Today 200 families were repossessed, 500 families were accepted as officially homeless and 12 or 13 or those will be young or single mums of 16 to 19. Approximately 8,000 people are sleeping on the streets of this country.
'We are saddened that the Government has chosen to scapegoat homeless families who are in desperate need of a home.'
Tory conference, page 8