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 813.

    If you want to cut benefits let's start with the working tax credit. Why should I pay taxes just so a company can pay its workers the minimum it can get away with.

    Then cut housing benefit why should my taxes support the easy life of a slum landlord, who just sees those on benefits as a cash cow.

  • rate this

    Comment number 812.

    So cap benefits but introduce more and more people to the working population driving down wages requiring more tax credits and implement a policy which drives up house prices resulting in higher rents and more housing benefit.

    Yep I can see how that could work

  • rate this

    Comment number 811.

    @791 Comparing the Tories to the Nazi's.

    Godwin's law most definitely applies here so this whole HYS should just be locked down

  • rate this

    Comment number 810.

    Saying there is a cap and enforcing a cap are two different things.
    If / when we hit the threshold are we really going to let disabled people, new mums, poorer pensioners etc. starve.

    MPs are just trying to look like they doing something about Welfare costs and once we have a new government of which ever colour next year this will all be forgotten.

  • rate this

    Comment number 809.

    @786 goonerforlife

    Yes,I do get the point,but I think that when you criticise others for their poor English then it's hypocritical to let yours be slack.

    @789 Bill Stickers
    "It's fairly paid jobs for all we need"

    Exactly.This would go a long way to solving a lot.

  • rate this

    Comment number 808.

    801.Henry Hazlitt

    "Astute proponents of wealth redistribution (WD), however, immediately point to the obvious; namely, that extreme WD would be unequivocally detrimental economically. However, the proponents quickly turn to dismissing this fear by asserting that, empirically, no economic loss occurs when WD is slight."

    Stop plagiarising online and post links.

  • rate this

    Comment number 807.

    What IDS has forgotten is in centuries past when there was no ‘poor relief’ there were still unemployed people. The state had resort to harsh measures (death/transportation for stealing a loaf of bread etc) to maintain the status quo. Medieval Europe routinely executed 10% of its population, principally for being poor.

    We need a different type of debate about poverty and the state’s role.

  • rate this

    Comment number 806.

    "Welfare spending, excluding the state pension.."

    --Since when is the State Pension WELFARE ?

  • rate this

    Comment number 805.

    The idea a cap leads to accountability is Orwellian double speak from IDS.

    You can have a target and introduce policies to help you reach that target but the reality is it will either be met or it won't.
    If a target is not met you are responsible for reassessing the realism of the target or the policies you set.
    if a cap is not met you simply wash your hands of any of that and let people suffer

  • rate this

    Comment number 804.

    'Scrap NI and use this to be paid into a private pension of the payers choice.'
    NI doesn't go into a pot to pay pay for your pension when you retire, it is used to support those who are currently pensioners, we being asked to pay extra into a private pension with the workplace pension scheme on top of NI.

  • rate this

    Comment number 803.

    Still all down to Thatcher's policies. Don't forget council stock was sold to Housing Associations who increased rents that increased the housing benefit bill.

    775. Sally the Rothbardian
    Why do you keep advocating libertarian economists who advised Reagan and Thatcher who got us in this mess by deregulating banks and other industries?

  • rate this

    Comment number 802.

    @786. goonerforlife
    '777 a silly point as this is not an exam, but nevertheless it does expose a huge illiteracy in general and a complete ignorance of so much by so many. i'm not talking about the odd obvious typo but an inability to string a few words together to make a coherent sentence. I'm sure you get the point.
    Your comments would be more intelligible if you used capital letters.

  • rate this

    Comment number 801.

    Astute proponents of wealth redistribution (WD), however, immediately point to the obvious; namely, that extreme WD would be unequivocally detrimental economically. However, the proponents quickly turn to dismissing this fear by asserting that, empirically, no economic loss occurs when WD is slight.

    This is akin to arguing that although fire can boil water, a small fire won’t heat it up.

  • rate this

    Comment number 800.

    @787. Meritocratic Egalitarianism

    We could just ask Amazon etc. to pay their tax


    You would be better off asking the state to implement better tax laws.

  • rate this

    Comment number 799.

    Tax credits don't subsidise companies. Fact is someone who is unskilled cannot afford to have children and support a family; tax credits simply support them in this basic right. If you make companies pay those with families more then they will simply be unemployable as those roles will be filled by single people or those without children (TCs apply to those with c'dren on low incomes)

  • rate this

    Comment number 798.

    A wee idea, Scrap NI and use this to be paid into a private pension of the payers least this way we have a degree of control ...however I am sure they would change the rules anyway midway through it.

  • rate this

    Comment number 797.

    They are attacking the old, the sick, and those too weak to defend themselves.
    No they're not - it just suits the left to perpetuate that view so they can avoid having to talk about the issue of welfare spending.

  • rate this

    Comment number 796.

    It's still too high
    ~30,000,000 in work. Average salary at £26,500.
    So that's equal to approx 15% of the average working person's income.
    Or 72% of all their income tax and NI contributions.

    It's not even the total welfare bill and whilst the exchequer has other sources of revenue beside income tax and NI, the NHS, defence, education and other departments aren't going to pay for themselves

  • rate this

    Comment number 795.

    @769 Dan. You silly little person Have you any concept of what some of us have done? How we sought, yes sought employment during the austerity of the 70s and 80s. Some of us went abroad, with English Companys, and paid our taxes etc in England. Without our hard work, and desire to pay our way you wouldn't have such a great place to live in. Next please!!

  • rate this

    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


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