Poorest households will be hit hardest by benefit changes, Whitehall admits Rochdale's Falinge estate, rated as the most deprived area in England for a fifth year in a row. The Whitehall study found that the government's benefits bill will hit the very poor hardest. Britain's poorest households will be hit hardest by government plans to limit rises in working-age benefits to 1% in a bid to save £3.1bn by 2016, according to a Whitehall assessment rushed out shortly before MPs debated a controversial welfare bill. As David Miliband signalled a possible return to the political frontline by attacking the government plans as "rancid" - while accepting the overall level of cuts - the Department for Work and Pensions admitted that households "further down the income distribution" would suffer the greatest loss of income. The government's impact assessment was published at midday, shortly before MPs debated the welfare benefits up-rating bill, which is designed to ensure that in-work and out-of-work benefits will be increased at the same rate as public-sector pay. Pensioners and disabled people will be excluded from the change. Until now benefits have increased in line with inflation. At the end of a five-hour debate, Nick Clegg suffered one of the biggest rebellions he has faced when the former Liberal Democrat leader Charles Kennedy led six Lib Dem MPs in voting against the second reading of the bill. The bill was passed by 324 to 268 - a government majority of 56. Sarah Teather, the former children's minister who was one of the rebels, attacked her Tory coalition partners, who have spoken of unemployed people idling on benefits. A fissure already exists between the working and the non-working poor. Hammering on that faultline, with the language of 'shirkers and strivers', will have long-term impacts on public attitudes. That fragmentation of society is, for me, the spectre of broken Britain. It is one we should worry about hastening at our peril. But similar Labour attacks on the government were blunted when the Tories unearthed a speech by Liam Byrne, the shadow work and pensions secretary, in which he spoke of "shirkers." Byrne told the Labour conference in 2011: "Let's face the tough truth - that many people on the doorstep at the last election felt that too often we were for shirkers, not workers." In his speech to MPs on Tuesday, Byrne seized on the government's impact assessment, which highlighted how the poor would suffer the greatest hardship. It says: "It is estimated that around 30% of all households will be affected. The majority of working-age households in receipt of state support will be affected by this policy, with an average change of around £3 a week compared to CPI up-rating. Households towards the bottom of the income distribution are more likely to be affected and have a slightly higher average change because they are more likely to receive the affected benefits. Byrne told MPs the government had shown "contempt" for parliament by publishing the impact assessment at midday. "It makes radically different assumptions to the policy costings that were set out by the chancellor last year," he said as he contrasted the £1.9bn annual savings from the cuts with the £3bn-a-year tax cut for higher-rate taxpayers. David Miliband highlighted the claim by George Osborne in the autumn statement last month that the bill was designed to tackle the high level of benefits paid to people "still asleep, living a life on benefits" as hard-working neighbours leave for the office. The former foreign secretary described the bill, which he said would take five times as much from poor and low-income families as from the richest in Britain, as "rancid." Miliband said: "The truth is that this rancid bill is not about affordability. It reeks of the politics of dividing lines that the current government spent so much time denouncing when they were in opposition in the dog days of the Brown administration. It says a lot that within two years they have had to resort to that dividing-line politics. We know the style: you invent your own enemy, you spin your campaign to a friendly newspaper editor, you 'frame' the debate. But the enemy within in is not the unemployed; the enemy within is unemployment. The former foreign secretary sparked speculation that he may be eyeing a return to a frontline role when he said that Labour should accept it made mistakes in government and said he accepted the government's overall spending totals. The government themselves have projected the total cost of all benefits, all tax credits and all tax relief for the next few years, and I am happy to debate priorities within that envelope. I will take the envelope that they have set, but let us have a proper debate about choices, not the total sum - a priorities debate, not an affordability debate. Iain Duncan Smith, the work and pensions secretary, accused the last government of "buying votes" by extending tax credits. "Labour spent taxpayers' money like drunks on a Friday night, with no care or concern for how effective it was," he said.