When George Osborne announced the level of the new cap on welfare spending in his Budget and the government’s plan to stage a vote on the issue this week, many predicted Labour would walk into his “trap” and vow to oppose the measure. But immediately after the Chancellor’s speech, Ed Balls defied expectations by announcing that his party would be supporting it. As he explained at his post-Budget briefing to journalists, “We’ll vote yes on the welfare cap next week…Ed Miliband called for a welfare cap last year, in his speech in June, and we have agreed with the way in which the government has structured the welfare cap, what’s in and what’s out in the next parliament.”
Since the cap (set at £119bn for 2015-16) excludes cyclical benefits such as Jobseeker’s Allowance and housing benefit for the unemployed, spending on which fluctuates according to the state of the economy, Labour is prepared to accept it. As Balls alluded to, Ed Miliband used his speech on social security last summer to announce his support for a cap on “structural welfare spending”, a pre-emptive move designed to spike Osborne’s guns.
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