Osborne sets out cap on welfare bill

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George Osborne has today announced a £119 billion cap on welfare spending.

As he laid out his budget in parliament, the chancellor said the £119 billion cap for 2015/16 would rise in line with inflation to £127 billion in 2018/19.

Only state pensions and cyclical unemployment benefits will be excluded from the cap.

Under the plan, total welfare spending would be set by the chancellor at the beginning of each parliament, with MPs voting on it.

Mr Osborne told MPs: ‘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.’

The chancellor previously announced a cap on the welfare budget last year, but did not confirm the level at which it would be set.

Last month, charities including Shelter and Crisis wrote to the government ahead of the budget, warning an overall cap on welfare spending would ‘compound hardship for many individuals and families’.

‘In particular, we are concerned that disabled people will bear the burden of a failure to address these and other drivers of social security spending,’ the letter said.