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MPs set to vote on £120bn annual welfare cap MPs set to vote on £120bn annual welfare cap
(35 minutes later)
MPs are set to vote on plans to introduce an overall cap on the amount the UK spends on welfare each year.MPs are set to vote on 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, would be capped next year at £119.5bn.Welfare spending, excluding the state pension and some unemployment benefits, would 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.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.
Labour leader Ed Miliband has backed a welfare cap but some party backbenchers are expected to vote against the plan.Labour leader Ed Miliband has backed a welfare cap but some party backbenchers are expected to vote against the plan.
The shadow work and pensions secretary, Rachel Reeves, said Labour recognised "the need to get a grip on costs of welfare spending" and said a cap would "provide discipline". 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.
But she said the government should do more to tackle the root causes of rising welfare costs. However, Jobseeker's Allowance and the state pension will be excluded.
'Scam' Parliamentary vote
However, Work and Pensions Secretary Iain Duncan Smith said Labour would break the cap unless it made clear how it would pay for its pledge to reverse changes to cuts to housing benefit. 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 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".Mr 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".
He insisted it was not punishing benefit claimants but was a recognition that money was not "finite", adding that it would give ministers greater flexibility to adjust spending in different areas while being more "accountable" to the taxpayer for overall expenditure.He insisted it was not punishing benefit claimants but was a recognition that money was not "finite", adding that it would give ministers greater flexibility to adjust spending in different areas while being more "accountable" to the taxpayer for overall expenditure.
Last summer, the government imposed a benefits cap of £500 a week for couples or single parents, and £350 a week for single adults. Labour has said it would introduce a three-year cap on structural spending, including housing benefits
However, the new proposal would also introduce an overall cap on total government spending on the vast majority of benefits. 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.
"They have to say immediately now what they would reduce in that spending to be able to afford that - otherwise they are voting to break the cap," he told BBC Radio 4's Today.
"I think there is a bit of scam going on," he added. "What they (Labour) are trying to persuade their own backbenchers is 'don't worry, we won't implement this as it stands'."
'Arbitrary cuts''Arbitrary cuts'
The chancellor says welfare spending should "never again" be allowed to "spiral out of control". 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".
As part of the plans, pension credits, severe disablement allowance, incapacity benefits, child benefit, both maternity and paternity pay and universal credit will all fall within the scope of the cap. She told Today that Labour was already committed to taking "tough decisions" on welfare - such as cutting winter fuel allowance and other universal benefits for better-off pensioners.
Housing benefit, apart from the benefit linked to Jobseeker's Allowance, will also be capped. 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 number of people unable to find full time work.
If the limit is breached, the chancellor would have to explain why and a vote held in Parliament. "The government have failed in their approach. 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."
BBC political correspondent Chris Mason said the proposed limit for next year was, in broad terms, what the UK was already spending on those benefits. A number of Labour backbenchers are expected to rebel in today's vote.
"The cap is more than just a tool for budget management in Whitehall: It is a nakedly political device too, forcing the opposition to decide whether to support it, or not," he said. "We think this cap will just encourage arbitrary cuts rather than long-term policies because that will bring down welfare spending," the Hackney North and Stoke Newington MP, Diane Abbott, said.
Mr Miliband last year said a future Labour government would introduce a three-year cap on structural spending, including housing benefits.
He has also said his party will vote in favour of the government proposal. However, a number of Labour backbenchers are expected to rebel in today's vote.
Root cause
Former leadership contender Diane Abbott has said she will be among the MPs planning to defy the Labour whips and vote against the coalition proposal.
"We think this cap will just encourage arbitrary cuts rather than long-term policies because that will bring down welfare spending," the Hackney North and Stoke Newington MP said.
"It's also part of the narrative to demonise benefit claimants. I don't think we should allow George Osborne to play politics with this issue, because it is people's lives.""It's also part of the narrative to demonise benefit claimants. I don't think we should allow George Osborne to play politics with this issue, because it is people's lives."
She added: "What we need to be doing is setting up an alternative narrative on benefits to George Osborne." 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.
Shadow chancellor Ed Balls said Labour had called for an overall cap on social security spending last year and "will support the welfare cap". "The cap is more than just a tool for budget management in Whitehall: It is a nakedly political device too, forcing the opposition to decide whether to support it, or not," he said.
However, he said: "George Osborne has already broken his own targets in this Parliament. His failure to tackle low wages, deal with the cost-of-living crisis and get more homes built means he is set to spend £13bn more on welfare than he originally planned." Last summer, the government imposed a benefits cap of £500 a week for couples or single parents, and £350 a week for single adults.
Are you currently receiving welfare benefits? Email us at haveyoursay@bbc.co.uk adding 'Welfare cap' in the subject heading and include your contact details.Are you currently receiving welfare benefits? Email us at haveyoursay@bbc.co.uk adding 'Welfare cap' in the subject heading and include your contact details.