UK Politics

MPs approve annual welfare cap in Commons vote

Empty houses
Image caption The welfare cap will include spending on housing benefit

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.

Media captionIain Duncan Smith: Welfare cap "will increase accountability"

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".

Image caption 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".

Image caption 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.

More on this story