Proposals to encourage the long-term jobless to move around the country in the search for work by promising them new homes have been dismissed as impractical and a return to the Thatcherite 1980s.
Under the Government's plans, people in unemployment blackspots would be guaranteed to go to the top of housing waiting lists if they relocated to more prosperous areas to find jobs.
Iain Duncan Smith, the Work and Pensions Secretary, explained that he wanted to help people break out of "ghettos of poverty" by making the British workforce more mobile.
He claimed that many unemployed people were hampered from moving for fear of not being able to find a home in a different part of the country. But the housing charity, Shelter, said the scheme was impractical because Britain had record waiting lists for social housing and pointed out that housing shortages were even worse in areas with higher employment rates.
Mr Duncan Smith, whose comments echo Norman Tebbit's call in 1981 for the unemployed to "get on your bike" and find work, argued yesterday that the jobless were often trapped in their home towns.
"In the UK today, under the last government, we have created almost ghettos of poverty where people are static, unable to get work because there isn't any work there, unable therefore to get to work because the wages aren't high enough, so they can't get there and they are stuck," he told Sky News.
"You have got two and three generations of people, unemployed, in households and while there has been more work created over the last 15 years, actually most of that has gone to households that already have work."
The Government has provided few details of the proposals, apart from suggesting that jobseekers from one part of the country would be fast-tracked to the top of the housing list in another if they moved for work.
It was not clear how ministers envisage forcing councils to allow newcomers to leap housing queues.
Mr Duncan Smith has also indicated that he is considering changing the rules to require single people living in houses too big for them to swap accommodation with families.
Campbell Robb, Shelter's chief executive, agreed it should be easier for social housing tenants to move to find work. But he added: "With 1.8 million households currently on council housing waiting lists, the top priority must be to deliver the social rented homes this country so desperately needs."
Two Labour leadership contenders yesterday condemned Mr Duncan Smith's plans. Ed Miliband, the former energy and climate change secretary, said: "What he is saying to whole parts of the country is: 'We have no hope as a government of getting work into your area so you are going to have to move out of your communities.' That is frankly disgraceful."
Ed Balls, the former schools secretary, said: "This is back to the 1980s – it's this idea that somehow the only solution to unemployment is to cut benefits and say to people 'go and do it for yourself' and we know this just doesn't work."
But Chancellor George Osborne, speaking at the G20 summit in Toronto, said: "What Iain Duncan Smith has said is a very sensible thing which is that we want to help people in social housing be able to move. That is one of the important social reforms that I think we need to see in this country...
"We want to give people freedom of choice and we want to give that freedom of choice to people in social housing just as people in private rented housing or who own their own home have.
"It is about encouraging social mobility ... giving people on lower incomes in our society the kind of opportunities and aspirations that other people in our society take for granted."