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SR2010: Watch welfare shrink

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Paul Mason | 11:44 UK time, Wednesday, 20 October 2010

Benedict Brogan of the Telegraph has the first concrete tip-off that the government's "get out of jail" card is to be a cut in future welfare spending. The blog is here.

The gist is that the OBR is about to pronounce that the welfare budget allocated in the Emergency Budget of June 2010 is too high, and will not be needed. Some centre-right think tanks also pointed out at the time that it seemed high - and provided wriggle room to ease the cuts on Departmental spending.

Just for clarity, there are two lines in the Budget - DEL (Departmental Expenditure Limit) and AME (Annually Managed Expenditure). You can't technically set that in a Spending Review, but you can predict it.

If you look at the last budget, Social Security plus Tax Credits rises from 186bn to 213bn by 2014/15 (hat tip to Neil O'Brien of Policy Exchange for this): if Robert Chote has discovered that they will not need to spend this much at all, that is one heck of a bunch of billions (nominally) to contribute towards the expected 83bn cut - on top of any specific reduction in entitlements like Child Benefit.

Watch this space. Am tweeting as we go.

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