Labour says coalition is out of touch on bedroom tax, which it says is unfair and will result in 'perverse consequences'

Labour has criticised Iain Duncan Smith, the work and pensions secretary, for missing a debate on the bedroom tax, which the party will argue is unfair and fails to save the taxpayer money.

The policy will be discussed in an opposition day debate in parliament on Tuesday, giving MPs a vote on whether to repeal the cuts to housing benefit for claimants with a spare bedroom.

Labour argues that the bedroom tax is unworkable as the vast majority of the 660,000 people affected are not able to move to smaller accommodation. However, the coalition describes the move as removing a spare room subsidy and believes it will save the taxpayer around £500m.

Rachel Reeves, the shadow work and pensions secretary, said the secretary of state's absence showed how out of touch the government was on the issue.

"This vote gives MPs a chance to show where they stand and vote to repeal this unjust and unworkable policy," she said. "If Tory and Lib Dem MPs vote against repeal, we won't let them forget it – and we'll step up our campaign to elect a Labour government that will."

The Department for Work and Pensions said Duncan Smith was unable to be at the debate because he would be in Paris for an international summit on youth unemployment, which would be attended by Angela Merkel, the German chancellor, and François Hollande, the French president.

In his place, Steve Webb, a Lib Dem pensions minister, and Esther McVey, a Tory employment minister, will respond for the government.

At the weekend Danny Alexander, a Liberal Democrat Treasury minister, faced the embarrassment of his own father describing the policy as "particularly unfair".

Di Alexander made the comment in an annual report he published in his capacity as chairman of the Lochaber housing association in Scotland. He said the association had been "facing up to the considerable challenge presented by welfare reform changes".

"The first of those to be implemented – the so-called bedroom tax – is particularly unfair in that it penalises both our tenants and ourselves for not being able to magic up a supply of smaller properties," he said.

During Tuesday's debate Labour is expected to point out the government's own figures showing that more than 400,000 of those affected are disabled. It will say the policy hits 220,000 households with children. Families affected will be forced to move or face losing an average of £720 a year.

The party will say there is mounting evidence that the policy is resulting in "unanticipated costs and perverse consequences" as families are pushed into more expensive private rented accommodation while local housing providers are hit by mounting arrears.