Budget 2014: Ed Balls admits Labour will not oppose George Osborne's proposed welfare cap

 

Whitehall Editor

Labour will not oppose plans to set an overall cap on the amount that future Governments can spend on welfare, it has admitted, as the party sought to side-step George Osborne’s bid to portray them as soft on benefits.

Under measures set out today, welfare payments - except the state pension and benefits linked to cyclical unemployment rates - will be not be able to exceed £119.5 billion in 2015/16.

Any party wanting to breach the limit would have to go back to Parliament for approval.

Mr Osborne is likely to go into the election promising to reduce the cap further. Aides signalled that this will allow him to create “clear blue water” from other parties.

But Ed Balls, the Shadow Chancellor, said he was not opposed to the principle of the cap as currently set down and pointed out that Labour was already committed to reducing the welfare bill.

Read more: The Independent's Budget coverage in full

He said the move would not affect Labour’s plans to abolish the bedroom tax as the party had already stated how it would pay for the move.

“Yes, we’ll vote for that next Wednesday,” Mr Balls said. “We’ve supported the idea of a welfare cap. We have said that we should keep out the basic pension but include pensioner benefits.

“Clearly, we will do things differently from the Government. For example we have said we will abolish the bedroom tax. We’ve shown how we will pay for that. We actually think our measures on housing and on young people and jobs can get the wider bill down. We’ll do things in a fairer way, but the idea of a welfare cap was proposed by Ed Miliband and we’ll support it next Wednesday.”

The idea of a cap on overall state spending on welfare, to come into effect from April 2015, was first put forward by Mr Osborne in his spending review in June last year.

Yesterday he set the level for the first four years, based on current spending levels, which have been agreed with the Liberal Democrats. It rises in line with inflation from £119.5 billion in 2015/16 to £122 billion in 2016/17, £124.6 billion in 2017/18 and £126.7 billion in 2018/19.

The figures are in line with forecast levels of welfare spending under current policies from the Office of Budget Responsibility.

Mr Osborne believes the policy will stop the welfare bill running out of control, by requiring any government which is set to breach the cap either to find savings elsewhere in the social security budget or to go to Parliament and seek MPs’ approval to increase it.

The Chancellor told MPs: “Britain should always be proud of having a welfare system that helps those most in need.

“But never again should we allow its costs to spiral out of control and its incentives to become so distorted that it pays not to work.

“In future, any government that wants to spend more on benefits will: have to be honest with the public about the costs, need the approval of Parliament, and will be held to account by this permanent cap on welfare.”

But Children’s Society chief executive Matthew Reed said: “Applying an arbitrary cap to welfare spending takes no account of changing circumstances of families caught up in poverty facing rising living costs beyond their control, including childcare and rocketing rents. The Government is effectively transferring the risk of rising costs to children and families already struggling to make ends meet.”

Birmingham University professor of social policy Karen Rowlingson said the idea that welfare spending had spiralled out of control was a “myth”.

She said: “In reality... the period 1995-2011 saw expenditure on benefits, as a proportion of GDP, falling sharply and then remaining stable for the longest period since the foundation of the welfare state after the Second World War.”

Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
scotland decidesIs a huge gamble on oil keeping First Minister up at night?
Arts and Entertainment
Rosalind Buckland, the inspiration for Cider with Rosie died this week
booksBut what is it like to be the person who inspires a classic work of art?
Life and Style
techApple has just launched its latest mobile operating software – so what should you do first?
News
A male driver reverses his Vauxhall Astra from a tow truck
newsThe 'extremely dangerous' attempt to avoid being impounded has been heavily criticised
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Lionel Messi in action for Barcelona
filmSo what makes the little man tick?
Arts and Entertainment
tvReview: An undercooked end (spoiler alert)
News
i100
Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
Sport
Cesc Fabregas celebrates his first Chelsea goal
footballChelsea vs Schalke match report
Arts and Entertainment
Toby Jones (left) and Mackenzie Crook in BBC4’s new comedy The Detectorists
tvMackenzie Crook's 'Detectorists' makes the hobby look 'dysfunctional', they say
Life and Style
fashion

Olympic diver has made his modelling debut for Adidas

News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Maths Teacher

£110 - £200 per day: Randstad Education Leeds: Secondary Maths Teacher for spe...

Maths Teacher

£90 - £160 per day: Randstad Education Leeds: Secondary Science Teacher (mater...

Maths Teacher

£110 - £200 per day: Randstad Education Leeds: Secondary Maths Teacher for an ...

Maths Teacher

£22000 - £37000 per annum: Randstad Education Leeds: A West Yorkshire School i...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week