MPs approve annual welfare cap in Commons vote

 
Empty houses The welfare cap will include spending on housing benefit

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MPs have overwhelmingly backed plans to introduce an overall cap on the amount the UK spends on welfare each year.

Welfare spending, excluding the state pension and some unemployment benefits, will be capped next year at £119.5bn.

The idea, put forward by Chancellor George Osborne in last week's Budget, would in future see limits set at the beginning of each Parliament.

With Labour supporting the idea, the measure was approved in the House of Commons by 520 to 22 votes.

However, eleven Labour backbenchers defied their leadership by voting against the plan.

The rebels included former shadow ministers Diane Abbott and Tom Watson.

The cap will include spending on the vast majority of benefits, including pension credits, severe disablement allowance, incapacity benefits, child benefit, both maternity and paternity pay, universal credit and housing benefit.

However, Jobseeker's allowance and the state pension will be excluded.

Under the proposed system, if a government wanted to spend more on one area of the welfare state it would have to compensate by making cuts elsewhere, 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.

Mr Osborne told Parliament that welfare could be "both fair and affordable".

"Some of these benefits help some of the most vulnerable citizens, like Disability Living Allowance, but that is not an excuse for the failure to manage its budget," he said.

Earlier, Work and Pensions Secretary Iain Duncan Smith told the BBC that the cap would stop politicians in the future from saying welfare spending "was under control when it was rising".

George Osborne George Osborne says governments in future must be honest about the cost of welfare spending

Labour has said it would introduce a three-year cap on structural spending, covering all the benefits included in the government's proposal.

But Mr Duncan Smith said Labour needed to explain how it would pay for its £460m pledge to reverse changes to cuts to housing benefit for additional rooms in council and social housing.

'Arbitrary cuts'

The shadow work and pensions secretary, Rachel Reeves, said Labour had plans in place to pay for its pledge to reverse what it calls the "bedroom tax" - the housing benefit changes that ministers say ended the "spare room subsidy".

Diane Abbott Labour's Diane Abbott was one of those who voted against the plan

Asked whether Labour was prepared to cut aspects of the welfare bill to stay within the cap, she said she was "confident" it would not need to because it would tackle the "root causes" of rising costs - such as low wages, youth unemployment and the increase in part-time workers.

"We would do it in different ways to the way the government is proposing to do it but we are confident that our way will control the cost of social security."

'Safety net'

Diane Abbott, one of the Labour rebels, said the cap was a blunt mechanism that would not take into account changes in people's circumstances and economic factors such as rising rents.

"Social security, people's lives, should not be made a matter of short-term political positioning," she said.

But Conservative MP Ben Gummer said it was "astounding" more was being spent on benefits, tax credits and state pensions than other departmental budgets put together.

He said the cap would force governments to address the underlying causes of welfare dependency rather than just "jacking up the bill every time they are faced with a difficult problem".

Lib Dem MP John Hemming said the welfare state should provide a "solid safety net" but it was "nonsense" to suggest that total costs should not be managed.

BBC political correspondent Chris Mason said the proposed government cap for next year was, in broad terms, what the UK was already spending on those benefits and would rise in line with inflation in following years.

 

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  • rate this
    -24

    Comment number 794.

    Welfare spending capped at £199.5 BILLION per year. Well whoop de do.
    Why on earth are we spending this huge amount. We cannot afford it.
    Welfare spending needs to be slashed, not capped.
    As long as we continue to spend ridiculous amounts on Welfare and the NHS, we will never meaningfully reduce taxation, and allow people to spend their own money, on what they choose.
    Radical cuts need to be made

  • rate this
    +15

    Comment number 781.

    I think the government should counter the following myths:
    1. People on benefits cannot share homes
    2. People who will not work cannot be moved to cheaper properties
    3. People need more than 1 home
    4. It is fair for companies to pay bonuses and make staff redundant
    5. It is fair for companies to pay massive wages to a few, but pay other staff low wages, so they need benefits

  • rate this
    +10

    Comment number 761.

    This is a rotten idea, rents go up I am low paid and keep falling into needing housing benefit put a cal on rents... That would reduce housing benefit considerably...

  • rate this
    +26

    Comment number 754.

    The benefit cap on individual cases was not a bad idea, but a national limit is barbaric. It puts people with vastly different problems into a bucket demographic of "claimants" that effectively denies any notion of individual circumstances.This is the nasty end of government by numbers, where real adversity faced by citizens reduces to a bean-counter's balance sheet problem. They won't feel shame.

  • rate this
    +20

    Comment number 715.

    So much social welfare spending is demand driven. How can you put a cap on it? If there is a sudden increase in homelessness or a particularly severe winter do we just reduce the benefits so the grand total stays the same? The government does not understand the harsh realities for people who need to claim or receive benefits

 

Comments 5 of 17

 

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Scotland Decides: SCOTLAND VOTES NO

  1. No 2,001,926
  2. Yes 1,617,989
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