MPs approve annual welfare cap plan


The House of Commons has voted to cap the overall amount spent on welfare at £119.5bn a year, despite pockets of opposition from some Labour MPs and smaller parties.

The plan was approved, with support from the Labour front bench, by 502 votes to 22, following a short debate on 26 March 2014.

The cap, which excludes the state pension and jobseekers' allowance, will come into force next year.

Chancellor George Osborne said it would create a fairer, more affordable and accountable welfare state.

"It ensures that never again can the costs spiral out of control and the incentives become so distorted that it pays not to work," he told the House.

Shadow chancellor Ed Balls said that although he supported the cap, a future Labour government would make different choices to get the "social security bill under control and tackle the root causes of rising spending".

He said the party would scrap the spare-room subsidy, introduce a compulsory jobs guarantee to get young people out of work for more than 12 months into employment, and remove the winter fuel allowance from the richest pensioners.

Under the coalition's plan, a government would have to make cuts elsewhere if it wanted to spend more on the welfare state, in order to stay within the overall cap.

If the limit is breached - or going to be breached - ministers would have to explain why to Parliament and get the approval of MPs in a vote.

Liberal Democrat John Hemming said anyone who opposed the cap was essentially against "managing and knowing what you're doing [with the welfare budget]".

But Labour backbencher Diane Abbott warned MPs not to play games with the welfare state, stressing: "Social security should not be about political positioning."

Explaining her decision to defy the party whip and vote in the "Noes" lobby, Ms Abbott said the cap was "arbitrary" and "bears no relationship to need".

The Hackney North and Stoke Newington MP argued that getting people back to work, introducing a national living wage and building more affordable homes were better ways of getting people off welfare.

A similar argument was put forward by Dr Eilidh Whiteford. The SNP MP said a spending limit was "reprehensible" and claimed it would force more children into child poverty.

But the Tory MP for Rochester and Strood, Mark Reckless, emphasised that cuts had to be made because welfare spending had gone unmanaged, and insisted the changes put forward by the chancellor would rectify this.

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