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
    +1

    Comment number 113.

    What about a Cap on MP's pay and expenses?

    Thought not....

  • rate this
    -5

    Comment number 112.

    So the Tories believe all benefit claimants wear caps?
    Just another example of how out of touch they are, like the bingo and bear fiasco.

  • rate this
    +5

    Comment number 111.

    I would argue that the cap could be much higher and actually save money if all benefits were not paid as cash but vouchers instead to provide for the basics only such as rent, food, heat and clothes. As a person who recieves child benefit I would welcome any equivelent voucher as opposed to cash beacuse I use it towards my children and not cigs, booze or scratchcards.

  • rate this
    +2

    Comment number 110.

    Welfare reform is necessary - almost everyone agrees with this. The next step should be to reduce taxation so that no-one in receipt of any benefit should be taxed. It is absurd and hugely inefficient that the Inland Revenue takes with one hand only for the same money to be handed back in benefits. Gordon Brown was the man responsible for conflating these. Irresponsible.

  • rate this
    +49

    Comment number 109.

    I won't believe this until
    There is no such thing as Tax Credits - they & immigration have driven wages down & are the cause of the new "working poor".
    Out of work benefits should be tiered to the number of years worked consistently.
    NO child benefits of any description should go overseas.
    Come down heavily on benefit fraudsters (& tax evaders).
    Bill criminals for their stay in prison.

  • Comment number 108.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 107.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    -1

    Comment number 106.

    "severe disablement allowance,"
    Opps! That no longer exists BBC. It's ESA now.
    "universal credit"
    Hmm... I thought I heard that was being abolished. As for the other benefits listed... charming! Why are disabled people being penalised? Pretty unfair all this really.

  • rate this
    +1

    Comment number 105.

    Of course, we all know that 'The Establishment' in Westminster would much rather spend £120 billion developing weapons and technology to kill people in unpopular wars around the globe.

    As the late Tony Benn so lucidly expounded: if we can find the money to kill people, we can find the money to help people.

    It's about time we saw a social benefit for all the taxes that are accrued in the UK.

  • rate this
    +5

    Comment number 104.

    So lets get this straight in the same week that Cameron announces his plan to increase the inheritance tax starting point to 1 million (a 300% increase), he also puts a cap on the benefits bill at 1%, so a little below the inflation figure. A real terms cut.
    A tax cut for the wealthy and paid for by kicking the weak and defenceless. That's nasty party policy for you.

  • rate this
    +17

    Comment number 103.

    SCRAP CHILD BENEFITS - FULL STOP
    Parents in the fifties/sixties brought up their children with no Family Allowance until it was given for the 2nd and subsequent children, but NOT for the 1st child. If this country is over so overpopulated, why encourage people to have more children? CANCEL it immediately. If you want children - you pay for them. This includes immigrants.

  • rate this
    0

    Comment number 102.

    Tories and welfare is akin to Scrooges comments about work houses and the surpus population.
    Leopards never change their spots.

  • rate this
    +8

    Comment number 101.

    A cap on migrants would be nice and would save a pretty penny in benefits too.
    But, oh silly me, the majority don't claim benefits and are a boon to our economy.

  • rate this
    +106

    Comment number 100.

    9. fed up
    17 MINUTES AGO
    What I want to know is how much of the £120 billion is being paid out in tax credits.
    --

    Totally agree.
    What is the logic behind subsidising employees of a company because the company cannot afford paying living wages in London ?
    The company should move out of London.

  • rate this
    -7

    Comment number 99.

    Yes, lets cap bankers pay which reduces the tax payed to the treasury which is then payed out in benefits. Great plan and well thought out.

  • rate this
    +9

    Comment number 98.

    I dont know why a picture of terraced houses in stoke is at the head of this article, the real housing benefit cost is being raked in by landlords of sub standard, over priced rented flats in London

  • rate this
    +2

    Comment number 97.

    George Osborne..."50 of tax avoidance schemes closed under this Government"

    And what about the other 50% George ? Why should we have to accept that ANY avoidance schemes are still running in these draconian times ?

  • rate this
    +53

    Comment number 96.

    If they set a cap on welfare they need to set a cap of £0 to foreign aid first

  • rate this
    -22

    Comment number 95.

    33.Natalie Rowe
    and all the others who do not have a danny what is going on..... MPs did not award themselves this rise. After all the moaning from the public, the decision on MPs pay rises were taken away from the MPs & put into an independent body. This body is who awarded the rise, not MPs, & to think you people have the vote, sheesh!

  • Comment number 94.

    This comment was removed because the moderators found it broke the house rules. Explain.

 

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  52.  
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  53.  
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    06:59: Question Time re-cap: MPs' second jobs
    Rachel Reeves

    Labour's Rachel Reeves followed her leader's line on Question Time last night, saying that being an MP was a "full-time job" and that second jobs for MPs were "plain wrong". She said she already earned about three times the salary of some of her constituents in Leeds West. The Lib Dems' Tessa Munt agreed with the general point, saying it was disgraceful that 281 out of 650 MPs currently hold second jobs. But the Conservatives' Grant Shapps echoed David Cameron by arguing that the Commons would be worse off if filled with people who had "only ever worked in politics".

     
  55.  
    06:50: Bodyguards for Farage?
    Police escort Nigel Farage out of a venue in Rotherham earlier this month

    Nigel Farage will be among friends when he addresses the UKIP party faithful in Margate later. But his trips round the country in recent times haven't been without incident. He was hit by a placard on one campaign visit last year and found himself barricaded in a building in Rotherham last month by a protest outside. The BBC now understands that UKIP has requested bodyguards for Mr Farage as he tours the country ahead of the 7 May election, making an application to the Home Office.

     
  56.  
    06:49: Tuition fees: 'Labour's biggest ticket' Norman Smith BBC Assistant Political Editor
    Radcliffe Camera

    More from Norman Smith on Ed Miliband's decision to curb pension tax reliefs to pay for reduced university tuition fees. Norman Smith says it is significant that "at a time when the Tories are straining every sinew to appeal to the grey vote, Mr Miliband is asking those of us of a certain age to prepare to have our pensions hit to pay for our children". The universities themselves are "deeply wary" of the policy, he suggests, fearing it will make them more dependent on state funding. At "north of £2bn", the policy will be "Labour's biggest ticket" going into the May election - but there's "no disguising [there is] opposition to it both inside and outside the Labour Party".

     
  57.  
    06:41: Tuition fees: 'British promise' Norman Smith BBC Assistant Political Editor

    Norman Smith tells BBC Radio 4's Today programme that the drive to reduce tuition fees is something "very personal" for Ed Miliband, who has been pushing this policy for "a long, long time now". It's to be paid for by curbing pension tax reliefs - and indeed, "the manner in which he's going to pay for this is almost as interesting as the policy itself". The Labour leader will try to sell the policy on grounds of "inter-generational fairness", which in reality means he will be asking "tomorrow's pensioners to dip into their pockets to pay for their children". Ed Miliband's "British promise" is that every generation should be able to prosper more than the preceding one.

     
  58.  
    06:40: Question Time re-cap
    Panellists on Thursday's Question Time

    It was a lively Question Time last night, with top billing given to the revelations that UK net migration reached 298,000 in the year ending September 2014. UKIP's Mark Reckless was scathing, while Conservative chairman Grant Shapps conceded the figures were "disappointing". Labour's shadow work and pensions secretary Rachel Reeves argued that more needs to be done for migrants earning less than the minimum wage, while Lib Dem Tessa Munt joined her party leader Nick Clegg in saying David Cameron's initial vow to reduce immigration was "a silly promise to have made".

     
  59.  
    06:27: UKIP conference
    Nigel Farage speaking in the United States

    UKIP's two-day gathering in Margate comes at a crucial time for the party, will polls suggesting it could win a number of seats - including several in Kent - on 7 May. Among those speaking on Friday include deputy leader Paul Nuttall and health spokeswoman Louise Bours. Party leader Nigel Farage will also address activists at about 16.00 GMT. He has had a busy few hours. On Thursday, he addressed the Conservative Political Action Conference in the US state of Maryland, sharing a stage with Tea Party movement star Sarah Palin.

     
  60.  
    06:26: Farage's fortunes Robin Brant Political Correspondent, BBC News
    Nigel Farage

    The BBC's Robin Brant says UKIP's spring conference in Margate is a "rallying cry" for Nigel Farage, with the UKIP leader contesting neighbouring Thanet South in the general election. A win there is "essential for his survival".

     
  61.  
    06:25: Miliband's tuition fees pledge
    Ed Miliband

    Ed Miliband is to set out Labour's plans to cut £9,000 university tuition fees by a third. In a speech in Leeds, he will reveal how a Labour government - which originally introduced fees in 2006 - would find the money to pay for such a reduction. The rising level of student debt has been a "disaster for the future of Britain", he will say. After warnings from some quarters that a reduction in fees would lead to a funding gap for universities, the Labour leader will reveal today how he would cover the costs.

     
  62.  
    06:14: Good morning

    Hello and welcome to the BBC's Live Page coverage for Friday 27 February. The business in the Commons today is almost entirely focused on the official reading of legislation - but don't think that means it'll be a quiet day in the political world. We're coming in to spring conference season: UKIP's kicks off in Margate today, and the Lib Dems gather in Cardiff for the last meeting of party activists before the general election. Labour leader Ed Miliband will set out his party's plans to cut tuition fees to £6,000 if it is elected. Chancellor George Osborne will be in Manchester to talk devolution of NHS services but is also likely to face questions about a report from MPs that says his claim last year to have halved the UK's £1.7bn EU budget surcharge is "not supported by the facts". We'll bring you all the latest news, views and analysis during the day - from the BBC and beyond.

     

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