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

    Comment number 53.

    And the cap for tax evasion will be...?

  • rate this

    Comment number 52.

    this is a good idea but should include all dependents including pensioners - they have had a lifetime to sort themselves out. our children don't need to be burdened by them and the children who could not be bothered to study at school (mind you most can escape state education so may not be all their fault).

  • rate this

    Comment number 51.

    Labour should be terrified at this. They won three terms on the back of mass immigration and buying votes through massive welfare handouts. What are they going to do now???

  • rate this

    Comment number 50.

    Whilst I agree there are many claiming benefits possibly unncessecarily how far ar MP's going to squeeze those who have no alternatives or prospects of changing their lives. Little account seems to be taken of individual circumstances and playing with peoples lives and points scoring by those who have a good standard of living is in my view immoral.

  • rate this

    Comment number 49.

    Its about time welfare was returned to the form it was set up to be, which is to support people who fall into hard times until they can sort themselves out! It is not a career choice, or a lifestyle. A lot of hard working taxpayers are sick of supporting the feckless & frauds!

  • rate this

    Comment number 48.

    Once again, the Government penalises the WRONG people. Cutting/limiting disability allowances, incapacity benefits, etc., but not capping Jobseekers?!?

    Great message there... If you have a disability, your up the spout, but if you're lazy, crack on!

    Dear Parliament... My name is reality... Have we met?!?

  • rate this

    Comment number 47.

    Good policy. However, introducing another policy last week that means high rate taxpayers get tax relief on Childcare says to me that the Tories are shifting the benefits from the poor to the rich(er).

    Now who would have thought that eh?

  • rate this

    Comment number 46.

    A cap on the amount of MP's there are would be good. In fact these stalwarts of our liberties and freedoms should be made to attend debates. The amount of times something of importance is being debated by about six people in an otherwise empty chamber.

  • rate this

    Comment number 45.

    #16 - unfortunately the money is not always spent in the UK. Some benefits claimants send the money back home (overseas) - e.g. child benefit paid even when the child does not live in the UK. Having said that not sure how this can be enforce although there must be a limit. Housing costs can be reduced by rent tribunals - possibly a good place to start?

  • rate this

    Comment number 44.

    Labour leadership keen to sign up to this because they think it gives them credibility as if we believe this will keep their spending under control.

  • rate this

    Comment number 43.

    Can they also vote on a cap on MPs pay rises. Maybe 1% in line with other public sector workers. Don't think they would vote for that though !!.

  • rate this

    Comment number 42.

    This sounds like a good idea in theory. However one wonders if it will lead to political deadlock like we see with the Debt Ceiling in the United States.

  • rate this

    Comment number 41.

    does the welfare cap include bailouts for rich people paid for by the tax payer????

  • rate this

    Comment number 40.

    The British political system has operated for many decades on the basis that someone else, at some point in the future will pay for the promises being made now which are usually motivated by a desire to get votes rather than what is right.

    This has to stop and politicians need to understand that you can only have those policies the economy is prepared to pay for in tax.

  • rate this

    Comment number 39.


    If this is such a good idea, shouldn't it be rolled out for other departments....? Defence, perhaps, ....."

    It is used on every other department, that is the whole point. Without this Welfare is open ended. There is always a contingency fund though for war etc.

  • rate this

    Comment number 38.

    This is just common sense which is why Labour cannot say no. All organisations need to set parameters for controlling budgets, the government should be no different. There isn't a bottomless pit of money available despite what some on the left wing may think.

  • rate this

    Comment number 37.

    Disabled are getting kicked from their homes. Genuinely sick people are told they are fit to work, then die. Nearly one million people in this country are begging for food. Our youth has been left to rot on forced labour schemes. JSA sanctions for missing the bus - no money for a month. This is the price of the so-called "economic recovery". I hope this country is proud, because I'm ashamed.

  • rate this

    Comment number 36.

    A cap clearly resolves all the problems (sarcasm)

    Where's the plan to build a million council houses to eradicate the 16bn/yr bill for private landlord subsidies?

    Or the plan to simplify welfare so that less is wasted in administration?

    When is the end to the 'cash for copulation' that breeds a large population of stupid people?

    It's not in their interests to reduce dependance.

  • rate this

    Comment number 35.

    £500 a week is way too much. Why should a household be able to claim £26,000 in benefits when quite a number of working households wont earn that much.

    Pay all benefits in vouchers and have strict alcohol/drug tests for all claimants

  • rate this

    Comment number 34.

    Stop calling pensions "benefits"! It's money that was deducted from our pay throughout our working lives!


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