Ed Miliband’s first act as prime minister would be to release cash to make up the shortfall in benefit payments for tenants hit by the so-called bedroom tax.
In a move that is likely to cost around £100 million, funds would be given to councils to hand over to around 464,000 claimants to top up benefit payments until the “cruel” cut, described as the spare room subsidy under the Coalition, is axed.
It would be paid for through the party’s wider plans to cover the cost of abolishing the measure by closing tax loopholes.
Mr Miliband will make the announcement during a whistle-stop tour across Britain which will take in Cardiff, Bristol and Glasgow as he steps up his campaign schedule during the final days of the battle for No 10.
More than 360,000 households in England, 31,000 in Wales and 70,000 in Scotland would be affected by the plans.
The policy has been a long-running sore between the Conservatives and Labour. It deducts money from housing benefit where a household has more bedrooms than residents, with some exemptions.
Under the Labour plans, legislation would be introduced as soon as Parliament is sitting to overturn the reduction in housing benefit.
To cover the cost to tenants while the move becomes law, extra cash would be given to local authorities for discretionary housing payments.
Mr Miliband announced plans to abolish the bedroom tax two years ago, funded by scrapping a scheme where employees give up certain rights for shares, reversing tax cuts for hedge funds and closing loopholes which allow construction workers to claim falsely to be self-employed.
The Labour leader will say: “We’re going to abolish the bedroom tax in every corner of the United Kingdom. This bedroom tax is indefensible. It’s cruel and it doesn’t even work.
“It has punished those most in need in our society, causing untold misery for half a million families across the UK, two-thirds of which include a disabled person.
“It’s a tax that affects 200,000 children and 60,000 carers – people we should be helping, not hurting.
“And under the Tories, a million more people could be hit by the tax in the next five years. This is a Government that cuts taxes for millionaires, opposes the mansion tax. It won’t abolish non-dom status but will keep the bedroom tax.
“I think that tells you everything you need to know about a Tory government – and it tells you everything you need to know about a Labour government that the first thing we’ll do is scrap it.
“We will legislate straight away to abolish the bedroom tax – in England, in Wales, in Scotland, right across our United Kingdom.
“We’ll get to work immediately to ensure that families no longer lose out. We’ll make new funds available to local authorities to offset the full costs of the tax for all families who currently pay it.
“So on day one of a Labour government, we free families from the burden of the bedroom tax.”