MPís of the House of Commons have unanimously voted to implement a cap on the total spending the government can partake on welfare policy each year.
The meeting of the house was called following Chancellor George Osborneís suggestion last week in his Budget that he was open to instigating an upper threshold for government spending at the start of each parliamentary term.
And the majority of MPís voted in favour of instigating a cap on the amount the Treasury can allocate towards welfare spending in a year, agreeing to cap it to £119.5 billion, not including state pension and employment related benefits.
The final vote was 520 for to 22 against, with all but eleven backbenchers from the Labour party voting in favour of the introduction of the cap, despite pressure from the top of the party to portray a united front on the issue.
The welfare benefits included within the cap include all pension related credits, child and incapacity benefits, maternity allowances and universal credit though all Jobseekerís allowance funding will remain untouched by the impending policy.
The new system will necessitate that if the government desires to raise the amount it spends on welfare in any given year that it will have to subsidise these costs by cutting expenditure in another area of government spending.
Mr Osborne identified that the measure was to ensure that the public spending deficit never reaches the level it was at immediately after the recession, and to ensure a stronger and more stable financial base within the UK.
“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.
This stance was reiterated by Work and Pensions Secretary Iain Duncan Smith, who praised the new policy as a necessary measure to preventing future politicians from overspending and leaving future governmentís with a multitude of financial problems to overcome.
Labour have identified that they will instigate a 3 year cap on government spending, including the benefit cap, should they win the 2015 General Election.
However, Mr Duncan Smith has questioned how Labour will be able to uphold this pledge, whilst also delivering on their previous promise of reversing the coalitions recent cuts on housing benefits, informally known as the ëbedroom taxí.
Shadow work and pensions secretary, Rachel Reeves, responded by citing that she was ëconfidentí that the government would not have to implement severe cuts in other areas of expenditure in order to subsidise the costs, as the Labour party would look to deal with the ëroot causesí of rising costs for workers, such as poor wages, high levels of youth unemployment and the large number of zero contract 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.”
ëShort term political positioningí
Diane Abbott, one of the MPí from the Labour party who voted against the introduction of the cap, argued that it was a poor move to take as it reduces the governmentís manoeuvrability and flexibility in helping people when they experience an unexpected change of fortune within their lives, such as an economic downturn or a rising cost of living.
“Social security, people’s lives, should not be made a matter of short-term political positioning,” she said.
However, MP Ben Gummer argued that the current level of spending on welfare compared to on other areas of government expenditure is ëastoundingí, and praised the introduction of the cap as the right move to end the countryís endemic welfare dependency problems and their tendency to ëjack up the welfare bill every time they are faced with a difficult problemí.
The new cap is set to be introduced at some point shortly after the end of the 2015 General Election next year, with it being forecasted that upper limit on the cap will rise in line with inflation, so that the welfare state remains a ësafety netí in case honest and hardworking households do fall upon hard times.